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.
Maryland Court of Appeals Rules That The Consumer Protection Act Applies to Condominium Resale Certificates And Imposes Potential Liablitly On A Condominium Council And Its Managing Agent
In a unanimous opinion filed on April 30, 2012, the Maryland Court of Appeals has established that provisions the Maryland Consumer Protection Act apply to the information contained in a condominium resale certificate, and a council of unit owners and property manager can be liable for unfair and deceptive trade practices if the information has a tendency to mislead the purchaser, even though they are not party to the sales contract, and even if they have otherwise complied with the condominium resale disclosure requirements contained in Section 11-135 of the Maryland Condominium Act. I have previously written about an earlier decision of the Court of Appeals in the case of MRA Property Management, Inc., et al. v. Armstrong, No. 93, Sept. Term 2007, filed on October 25, 2011. A majority of the Court held that the Maryland Consumer Protection Act applies to purchases of condominium units with respect to the information required to be provided by a council of unit owners in the resale certificate. The Court ruled that, where a council of unit owners and its property management company violate the resale certificate disclosure obligations imposed by Md. Real. Prop. Code Ann. Sec. 11-135, “they engage in unfair and deceptive trade practices ‘in the sale of consumer realty.’” The Court specifically held that such a violation of the Consumer Protection Act can occur even though the defendants were not parties to the sale of the unit, were not “merchants.” 
Subsequently, however, in response to motions for reconsideration filed on behalf of both sides in the appeal, the Court withdrew and agreed to reconsider its opinion. Following re-argument, the Court has now issued its final opinion, holding that the statutory duties to provide the disclosure information required under Section 11-135 of the Condominium Act, “sufficiently implicated [the council and the property manager] in the entire transaction so as to impose liability under the Consumer Protection Act.” read more…
Implied Warranties for New Condominiums In Maryland
Section 11-131 of the Maryland Condominium Act provides significant warranty protections for the purchasers for new condominium units. Section 11-131 (a) codified the ruling in StarfishCondominium Ass’n v. Yorkridge Service Corp., and established that new home warranties under Section 10-203 “apply to all sales by developers” of condominiums, and that “a newly constructed private dwelling unit means a newly constructed or newly converted condominium unit and its appurtenant undivided fee simple interest in the common areas.” Specific warranties are applicable to certain specified components of both individual units and the common elements, and they are the obligation of the condominium’s developer. read more…
Maryland Implied Warranties That Are Applicable To All Newly Contructed Homes, Including Condominiums
I was recently asked to again discuss the impled warranties under Maryland law. Pursuant to Md. Code Ann., Real Prop. Tit. 10, certain implied warranties are applicable to the sale of every newly constructed home in Maryland. These warranties are applicable to all “improvements,” which are defined as “every newly constructed private dwelling unit, and fixture and structure which is made part of a newly constructed private dwelling unit at the time of its construction.” They are enforceable against a “vendor,” defined as “any person engaged in the business of erecting or otherwise creating an improvement on realty, or to whom a completed improvement has been granted for resale in the course of his business.” These broadly worded implied warranties provide that the improvement is: (1) Free from faulty materials; (2) constructed according to sound engineering standards; (3) constructed in a workmanlike manner; and (4) fit for habitation. However, it is expressly provided that these warranties “do not apply to any condition that an inspection of the premises would reveal to a reasonably diligent purchaser at the time the contract is signed. Nevertheless, there is a fifth implied warranty that is not subject to the inspection exception. This is the implied warranty of fitness for a particular purpose. “If the purchaser, expressly or by implication, makes known to the vendor the particular purpose for which the improvement is required, and it appears that the purchaser relies on the vendor’s skill and judgment, there is an implied warranty that the improvement is reasonably fit for the purpose.” read more…
Maryland Condo Law Blog To Be Featured In The Ocean City Spring Home,Condo and Outdoor Show Program
Ocean City area residents and visitors should look for information on this blog in the Ocean City Spring Home, Condo and Outdoor Show Program. The 28th annual show will take place at the R.E. Powell Ocean City Convention Center for three days this week: Friday March 9 from noon to 6:00 p.m., Saturday March 10 from 10:00 a.m. to 6:00 p.m., and Sunday March 11 from 10:30 a.m. to 3:30 p.m. The program will be available at the show, and can also be found as an insert in this week’s edition of The Bayside Gazette and Ocean City Today.
Maryland Legislature Considering Bill To Require Property Mangagers To Purchase Fidelity Insurance For Dishonest Acts
Under Section 11-114 of the Maryland Condominium Act, and Section 11B- 111.6 of the Maryland Homeowners Association Act require that condominium councils of unit owners and homeowner associations maintain property and liability insurance. House Bill 741 pending in the current session of the Maryland General Assembly would extend an insurance requirement to a management company that contracts with the condominium or homeowners association. The proposed language provides that, if a condominium or homeowners association “contracts with a management company for operation or maintenance services,” such “management company shall purchase fidelity insurance that provides for the indemnification of the [condominium or homeowners association] against loss resulting form acts or omissions arising from fraud, dishonesty, or criminal acts by any agent or other employed of the management company.” read more…
Maryland’s Highest Court Reconsidering Issues Condominium Disclosure Decision
I previously wrote about the recent decision of the Maryland Court of Appeals in the case of InMRA Property Management, Inc., et al. v. Armstrong, No. 93, Sept. Term 2007, filed on October 25, 2011. A majority of the Court of held that the Maryland Consumer Protection Act applies to purchases of condominium units with respect to the information required to be provided by a council of unit owners in the resale certificate. The Court ruled that, where a council of unit owners and its property management company violate the resale certificate disclosure obligations imposed by Md. Real. Prop. Code Ann. Sec. 11-135, “they engage in unfair and deceptive trade practices ‘in the sale of consumer realty.'” Such a violation occurs where the resale certificate states that there are no known violations of the building code if there is information establishing knowledge of building defects. The Court specifically held that such a violation of the Consumer Protection Act can occur even though the defendants were not parties to the sale of the unit, were not “merchants,” and where there had been no code violation citations issued by the county. Now, however, in response to motions for reconsideration filed on behalf of both sides in the appeal, the Court has agreed to withdraw and reconsider its opinion. read more…
2012 Maryland Super Lawyers
I am very pleased to have been selected to the 2012 list of Maryland Super Lawyers. This is the six consecutive year that I have had the privilege of being included in this elite group since the inception of the Super Lawyer ratings system in 2007.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process is multi-phased and includes independent research, peer nominations and peer evaluations. To learn more, you can visit the website at www.superlawyers.com.
New Maryland Construction Law Deskbook
Ober|Kaler is pleased to announce the release of the Maryland Construction Law Deskbook, edited by Joseph C. Kovars and Michael A. Schollaert of the firm’s Construction Group.
Published by the Maryland State Bar Association, the book is designed to serve as a reference tool for those immersed in construction law, as well as for those faced with an occasional construction issue. The book covers key areas of the law, including contracts, performance disputes, damages, delays, dispute resolution, green construction, project delivery systems and other topics.
In addition to serving as editors, Mr. Kovars and Mr. Schollaert also authored chapters for the book. Mr. Kovars contributed “Delays and Time Extensions,” and Mr. Schollaert collaborated with Ober|Kaler principal Paul S. Sugar on “Mechanic’s Liens and Statutory Remedies.” Another firm principal, Raymond Daniel Burke, contributed the chapter “Condominium and New Home Warranties and Rights of Action.”
Mr. Burke is the author of the Maryland Condo Law Blog. He is also the author of numerous articles on condominiums, homeowner associations, contruction law, and litigation, as well as a frequent opinion/commentary writer for The Baltimore Sun. He has been listed in Maryland Super Lawyers in the construction litigation catagory since the inception of this peer-review program in 2007.
Mr. Kovars is co-chair of Ober|Kaler’s Construction Group and is an experienced civil litigator who focuses on construction and public contracts law. He represents contractors, subcontractors, sureties and owners in contract formation and construction disputes involving many types of projects. Mr. Kovars is the author of numerous articles and papers on construction law topics. He has been listed in The Best Lawyers in America in the construction category since 2003 and in Maryland Super Lawyers in the construction litigation category since 2007.
Mr. Schollaert is an associate in the firm’s Construction Group. He represents general contractors, owners, subcontractors and suppliers on private and public construction projects and also provides general litigation, complex commercial litigation, mediation and arbitration representation. Mr. Schollaert has been named a “Rising Star” in construction law by Maryland Super Lawyers every year since 2009.
The Maryland Construction Law Deskbook is available at the Maryland State Bar Association’s website.
New Court of Appeals Decision Holds That a False and Misleading Resale Disclosure Certificate Violates the Consumer Protection Protection Act — Yours Truly Quoted By The Court
In its recent decsion in MRA Property Management, Inc., et al. v. Armstrong, No. 93, Sept. Term 2007, filed on October 25, 2011, a majority of the Maryland Court of Appeals held that the Maryland Consumer Protection Act applies to purchases of condominium units with respect to the information required to be provided by a council of unit owners in the resale certificate. The Court ruled that, where a council of unit owners and its property management company violate the resale certificate disclosure obligations imposed by Md. Real. Prop. Code Ann. Sec. 11-135, “they engage in unfair and deceptive trade practices ‘in the sale of consumer realty.'” Such a violation occurs where the resale certificate states that there are no known violations of the building code if there is information establishing knowledge of building defects. The Court specifically held that such a violation of the Consumer Protection Act can occur even though the defendants were not parties to the sale of the unit, were not “merchants,” and where there had been no code violation citations issued by the county. read more…
Avalon Court Six Case Now A Reported Opinion
In a recent post, I discussed the decision of the Court of Special Appeals in an appeal in which I represented a group of condominium owners suing their Council of Unit Owners where the condominium’s suit against the developer for building defects was held to have been filed too late under the applicable statute of limitations. Greenstein et al. v. Council of Unit Owners of Avalon Court Six Condominium, Inc., No. 0485, September Term, 2009. [PDF] The unit owners sought to recover increased and special assessments that were necessary to cover the costs of repairing the defects. Court of Special Appeals expressly held that the individual unit owners have a right of action against the council of unit owners for the board’s failure to properly execute its duty to pursue a timely claim against the developer for defects in the common elements. This is the first Maryland appellate decision recognizing the right of individual condominium unit owners to file suit where the board of directors has failed to pursue a timely claim relating to defects in the common elements. On September 29, 2011, the Court designated this to be a reported opinion, and it will now stand as precedent for future cases.
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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.