New Law Modifies Insurance Requirements for Detached Condominium Units

House Bill 1227, passed during the 2024 session of the Maryland General Assembly and signed into law by Governor Moore, changes the special insurance requirements for “detached” condominium units that arose from legislation passed during the 2023 session. The 2023 legislation amended Section 11-114 of the Condominium Act concerning the mandatory insurance that is required to be maintained by the Council of Unit Owners.  Those changes, which took effect on October 1, 2023, differentiated between “attached” and “detached” units for insurance purposes.  Generally, a Condominium Council is required to maintain “[p]roperty insurance on the common elements and units, exclusive of improvements and betterments installed in units by unit owners other than the developer, insuring against those risks of direct physical loss commonly insured against, in amounts determined by the council of unit owners but not less than any amounts specified in the declaration or bylaws.”  The 2023 law provided that the Council is only required to maintain insurance on “attached” units.  With respect to detached units, the 2023 law specifically provided that the Council was required to maintain insurance only on the common elements and not any portion of the detached units.  The new law, which took effect on October 1, 2024, now provides that the exception for detached units only applies to detached units “located within a condominium composed entirely of similar detached units.” The new law also requires that the Council must “give annual notice, in writing, of any obligation of an owner of a residential, detached unit to obtain property insurance coverage on the unit.”  It also obligates the Council to provide prompt notice to unit owners of any change in insurance coverage requirements.  Accordingly, the Council must now provide notice to owners of detached units that were not covered by the Council as a result of the 2023 law, but are now covered by the Council under the 2024 law because they are not located in a condominium composed entirely of detached units.