Maryland Condo Law Blog
An online resource for condominium and homeowner associations and their members, and for developers, builders, contractors, architects, engineers and others in the building industry.
The Law Governing The Running of Implied Warranties On Common Elements Depends On Whether a Maryland Condominium Was Created Prior To Or After October 1, 2010
During 2010 legislative session, then Maryland General Assembly enacted an amendment to Section 10-131 of the Maryland Condominium Act governing the warranty period for the implied warranties on the common elements of a condominium. Originally, the warranty on common elements commenced “with the first transfer of title to a unit owner” and ran for three years. This provision gave rise to problems in enforcing the warranty in communities where unit sales were slow, and a majority of the units remained unsold for an extended period of time. In such cases, majority control of the condominium remained in the hands of the developer well into, and sometimes beyond, three years following the transfer of title to the first unit. As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of three years from the first transfer of title, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.” However, it is important to note that the legislation provided that it would only apply prospectively from the time of its enactment on October 1, 2010. Accordingly, any condominium with a declaration, bylaws and plat recorded prior to that date is governed by the original version of the statute, requiring that the warranty commence upon the first transfer of title to a unit and runs for three years.
Common element warranties in condominiums created prior to October 1, 2010 are always governed by the original provision, regardless of when the unit owners took control. Common element warranties in condominiums created after October 1, 2010 may be governed by either the original provision or the amendment. If three years after transfer of title to the first unit is later than two years after the unit owners take control, the original provision applies. If, however, two years after the unit owners take control is later than three years after transfer of title to the first unit, the amendment applies. read more…
Condominium Council Held In Contempt Of Court For Failing To Make Common Element Repairs
In a case in which my colleague, Jack Boyd, and I represented the unit owner, the Circuit Court for Baltimore City has held a high-rise condominium in contempt of a prior order of the Court to undertake and complete repairs to the exterior common elements needed to make the building watertight. During a three-day trial, the Court found that both the failure to include certain specified items in the repair contract, and the failure to complete the repairs within the time ordered by the Court, amounted to willful contempt, and called for the imposition of sanctions. The Court further found that the case presented the “exceptional circumstances” required under Maryland law for the award of compensatory damages as part of the sanction. The Court also established certain construction deadlines to be met in order for the Condominium to avoid additional damage payments. read more…
Maryland’s Statute Of Repose Prevents Some Construction Defect Claims In Properties More Than 10-Years-Old And Bars All Claims After 20 Years
In terms of the accrual of causes of action, Maryland abides by the discovery rule, through which a cause of action arsies when it is disovered or should have been discovered in the exercise of reasonable diligence. Once discovered, a claim must then be instituted within 3 years under Maryland’s general statute of limitations. However, where construction defects are concerned, the discovery rule does not permit building defect claims in older properties. Under Maryland’s Statute of Repose, construction defect claims are absolutely barred after 20 years, regardless of when they were or could have been discovered. Additionally, architects, professional engineers and contractors can be held liable for building defects for just 10 years after construction. The full statute is set forth in the Courts & Judicial Proceedings Code of the Annotated Code of Maryland at Section 5-108.
Maryland General Assembly Declines To Enact Proposals To Regulate Residential Property Managers
Both houses of the Maryland General Assembly rejected bills that would have created a regulatory system for property managers. Senate Bill 274 died in the Judicial Proceedings Committee, while House Bill 10 suffered the same result in the Environmental Matters Committee. Each bill would have brought residential property managers for condominiums, cooperatives and homewoner associations under the jurisdiction of the Maryland Department of Licensing and Regulation. The Senate bill called for a registration process, while the more broad House version would have established a formal licensing procedure. read more…
Maryland House of Delegates Fails To Pass Senate Approved Legislation To Limit Condo Developer Liability
The Maryland House of Delegates failed to take action on House Bill 259, which would have prevented residential condominium developers from including certain provisions in the project’s governing documents or sales contracts that limit the developer’s liability for construction defects. The Maryland Senate, by a vote of 36 – 11, passed Senate Bill 207, which would prohibit provisions in the declaration, bylaws or rules and regulations that limit the ability of a council of unit owners to file suit on behalf of itself or the unit owners or enforce warranty claims. However, the House version died the Environmental Matters Committee. read more…
Bill To Remove Limit On Condo Rentals In Hardship Cases Fails in Maryland General Assembly
The Maryland General Assembly failed to take action on a bill that would require condominiums to remove limits on the number or percentage of units that can be rented, if the unit owner demonstrates “financial hardship” and meets certain other requirements. House Bill 1039 proposed to establish new Section 11-111.4 in the Maryland Condominium Act, and provide that unit owners who meet one of the bill’s six definitions of financial hardship may request a waiver from any rental limitations applicable to the community. The unit must be the owner’s primary residence, and the appraised value of the unit must be less than 90% of what is owed.
Maryland House and Senate Fail To Agree On Versions of HOA Disclosure Requirements And Related Fees
Both the Maryland Senate and House of Delegates passed bills that would require Homeowners Associations to make re-sale disclosure information available upon written request of a lot owner. However, the two houses were unable to agree on a portion of the proposed new law that placed limits on the fees that can be charged by a howeowners association or a condominium council of unit owners for providing resale disclosure information. The Senate version would limit those fees to the lesser of $50 or the actual cost of furnishing the information. The House version would set a limit of $250. The Senate, which was the first to pass SB 229, refused to accept HB 412. The House then refused the Senate’s request to agree to the Senate version. read more…
Maryland Senate Passes Bill Requiring HOAs To Provide Resale Disclosure Information And Limiting Fees Charged By HOAs and Condos
By a vote of 45 – 2, the Maryland Senate has passed SB 229, which would require Homeowners Associations to make re-sale disclosure information available upon written request of a lot owner. Presently, Section 11B-106 of the Maryland Homeowners Association Act provides that certain information be provided to a prospective purchaser in the community, and that specific information be included in the contract of sale. The approved bill provides that, within twenty days of receiving a written request from the selling owner, the homeowners association must provide the information necessary for the owner to comply with the disclosure requirements. It also limits the fee that could be charged to the owner for preparing the information to the actual cost up to a maximum of $50. It also would impose this same $50 limit in charges by condominium councils of unit owners for furnishing the re-sale disclosure information they are required to provide under Section 11-135 of the Maryland Condominium Act. A companion bill is pending before the House of Delegates as HB 412.
Ocean City Home and Condo Show This Weekend
Please look for the ad for this blog in the program for this weekend’s Home and Condo Show in Ocean City. The show begins today and runs through Sunday at the R.E. Powell Convention Center. Hours are Friday Noon – 6:00 pm, Saturday 10:00 am – 6:00 pm, and Sunday 10:30 am – 3:30 pm.
My Commentary In Today’s Baltimore Sun
Here is a link to my opinion/commentary piece in today’s Baltimore Sun: http://www.baltimoresun.com/news/opinion/oped/bs-ed-corvette-economics-20140319,0,1019974.story
ABOUT
The Maryland Condo Law Blog is written by Raymond Daniel Burke. One of the region's top construction and real estate development lawyers, Ray has more than 35 years of experience in matters relating to condominium and other multi-use development matters.