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New Maryland Law Providing For Closed Condominium Board Meetings Takes Effect October 1

A new Maryland law that permits closed condominium board meetings for the purpose of discussing business transactions takes effect this coming Tuesday, October 1, 2013.    House Bill 388 and Senate Bill 197 were both approved by unanimous votes in each house of the Maryland General Assembly and signed by the Governor.  The new law amends Section 11-109.1 of the Maryland Condominium Act to provide that the board of directors of a condominium council of unit owners may meet in closed session for “consideration of the terms or conditions of a business transaction in the negotiation stage if disclosure could adversely affect the economic interests of the council of unit owners.”

Previously,  a condominium’s board of directors could meet in closed session only for the following purposes:  (1) Discussion of matters pertaining to employees and personnel; (2) protection of privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) consultation with legal counsel on legal matters; (4) consultation with staff personnel, consultants, attorneys, board members, or other persons in connection with pending or potential litigation or other legal matters; (5) investigative proceedings concerning possible or actual criminal misconduct; (6) complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) discussion of individual owner assessment accounts.  The new provision expands this to include discussion of a “business transaction in the negotitation stage,” which may be broadly interpreted.  Additionally, the new law indicates that the board has discretion to determine “if disclosure could adversely afftect the economic interests of the council of unit owners.”