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Legislature Considers Amendments To Provisions For Termination Of Developer Contracts

Senate Bill 162, now pending in the Maryland General Assembly, would change the current provisions applicable to the rights of condominiums and homeowners associations to terminate contracts that were entered into by the developer prior to the property owners having assumed control of the community.  It would expand the developer contracts now subject to termination by a subsequently elected independent governing body to include contracts providing “telecommunications, internet, cable, or other video services” in addition to utility services and communications systems.

Under the proposed amendment, within 180 days after the election of  a majority of the board or governing body that is unaffiliated with the developer, such contracts previously entered into by the developer could be terminated on 30 days notice to the contractor.  Under current law, only developer contracts for utility services and communications systems may be terminated, but there is no limit on when that action must be taken by the independent governing body.  The provision that termination take place within 180 days of the election of an independent governing body is a new requirement.