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Maryland’s Highest Court Holds That Condos May Not By Rule Suspend A Unit Owner’s Access To Common Elements For Delinquent Assessments

The Maryland Court of Appeals has invalidated a rule adopted by a condominium to suspend access to common elements for unit owners who are delinquent in paying assessments.  In an opinion issued on June 23, 2017 in the case of Elvation Towne Condominium Regime II, Inc. v. Rose, No. 33, Sept. 2016, the Court held that, in order to restrict access to the common elements as a means of enforcing payment of condominium assessments, such a restriction must be provided in the condominium’s declaration.  It may not be adopted by rule promulgated by the board of directors.  The ruling affirmed prior rulings in the case by the Circuit Court for Anne Arundel County and the Maryland Court of Special Appeals.

The condominium had recorded a lien against the owner’s unit, and had filed suit against the owner in the District Court.  Additionally, the board of directors invoked a “suspension-of-privileges” rule, which the board had adopted,  prohibiting unit owners who are delinquent in paying assessments from parking overnight in the complex and from using the community pool until the delinquency is resolved.  The unit owner filed suit in the Circuit Court challenging the rule and disputing the debt.  The District Court action was stayed while the Circuit Court considered the unit owner’s complaint.

The Circuit Court ruled that the unit owner could not dispute the debt in that court, but, instead, that issue must be heard in the District Court action filed by the condominium.  It further held that the board of directors did not have authority to adopt a rule denying a unit owner access to the common elements for failure to pay assessments.  Both parties appealed to the Court of Special Appeals, which affirmed those rulings in an unreported opinion dated April 21, 2016 (No. 1033, Sept. Term 2014).  Both parties sought review in the Court of Appeals.

The Court of Appeals affirmed based on its finding that the “suspension-of-privileges” rule constituted a taking of property; that is, an unlawful taking of the unit owner’s undivided percentage ownership interest in the common elements.  This was so despite the board’s broad rule making authority.  Indeed, the Court held that “[r]estricting a condominium unit owner’s access to communally-held property is a significant infringement of the owner’s property rights.”  The Court particularly noted that Section 11-108(a) of the Maryland Condominium Act provides that, “except as provided in the declaration, the common elements shall be subject to mutual rights of support, access, use, and enjoyment by all unit owners.”

With regard to the court in which the unit owner could dispute the debt, the Court of Appeals noted that Section 14-203(c)(1) of the Maryland Contract Lien Act allows a party to dispute the lien by filing an action in the circuit court.  However, the unit owner had not done so, and could not now claim circuit court jurisdiction of the debt dispute as part of their challenge to the “suspension-of-privileges” rule.