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.
Opening Day Possibilities
Here is a link to my Opening Day opinion/commentary from today’s Baltimore Sun: https://shar.es/1Q6j1p
House of Delegates Passes Bill To Preclude Condo Developers From Limiting Owners Construction Defect Claims
By a vote of 136-0, the Maryland House of Delegates approved a bill to protect condominium owners’ rights with regard to bringing construction defect claims against the project’s developer. House Bill 676 would prevent condominium developers from limiting the ability of the council of unit owners and individual unit owners to bring claims for building issues. The proposed law would prevent developers from including certain provisions in condominium governing documents or contracts of sale that act as an impediment to claims alleging the failure of the developer to comply with (1) applicable building codes; (2) plans and specifications for the project approved by the local governing authority; (3) manufacturer’s installation instructions for building products used the condominium; and (4) warranty provisions under Sections 10-203 and 11-131 of the Real Property Article.
As to such claims, under the proposed law, the developer would be precluded from including provisions that: (a) shorten the statute of limitations for filing claims; (b) waive application of the “discovery rule” for purposes of determining when a claim accrued; (c) require the council or a unit owner in an arbitration proceeding to assert a claim within a period shorter than the applicable statute of limitations; or (d) operate to prevent a council or unit owner from filing a law suit, initiating arbitration proceedings, or otherwise asserting a claim within the applicable statute of limitations.
A companion bill is pending in the Maryland Senate (SB 670).
House of Delegates Passes Legislation Requiring Periodic Reserve Studies
By a vote of 135-1, the Maryland House of Delegates has passed House Bill 651, which would require condominiums and homeowner associations to conduct reserve studies of the common elements and common areas. As discussed in an earlier post, the new law would provide that, within 90-days of the meeting at which the unit owners assume control of the council, a reserve study must be conducted of the common elements, and the condominium must conduct a reserve study every five years thereafter. Condominiums established before October 1, 2017 that had a reserve study conducted on or after October 1, 2013 are required to undertake an additional reserve study five years after the previous one, and every five years thereafter. Condominiums established before October 1, 2017 that have not had a reserve study undertaken on or after October 1, 2013 must conduct a reserve study on or before October 1, 2018, and every five years thereafter.
Also under the bill, similar reserve study requirements would be established for the common areas in homeowner associations.
House of Delegates Passes Bill To Reduce The Votes Required To Amend Bylaws
By a vote of 135-0, the Maryland House of Delegates has passed legislation that would reduce the percentage of affirmative votes required to amend condominium bylaws. Under Section 11-104(e) of the Maryland Condominium Act, condominium bylaws may only be amended upon a vote of two-thirds (66 2/3 percent) of the unit owners. House Bill 789 would reduce this to 55 percent. Significantly, it would also permit the bylaws themselves to establish a percentage as low as 51%. Additionally, the bill would limit the voting to members in “good standing, ” which is defined as not being more than 90 days in arrears with regard to assessment payments. The original version of the bill would have also allowed voting to be denied to any member in violation of a provision of the declaration, bylaws or rules and regulations, but this provision was removed in the final version that was approved.
The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under Section 11B-116 of the Maryland Homeowners Association Act.
House of Delegates Passes Registration Requirement for Condos, HOAs and Coops
The Maryland House of Delegates, by a vote of 99- 39, has passed House Bill 41, which would require residential condominiums, homeowner associations and cooperative housing corporations to register annually with the Maryland Department of Assessments and Taxation. The proposed law would require registration information that includes the name and contact information for the property manager, or, if the community does not employ a property manager, a person designated to answer inquiries on behalf of the community. Original language requiring the names and contact information for each officer and board member was removed in the final version of the bill. Also deleted from the final version was a provision that would have permitted the Department to require additional information. The final version of bill gives the Department authority to establish a registration fee not to exceed $10 per year. The bill proposes a$50 fine for failing to register.
Proposed Maryland Law Would Permit HOAs To Collect A Fee For Resale Inspections
House Bill 34 in the Maryland General Assembly would give homeowner associations the right to collect a fee relating to inspections during the resale process. The proposed law would entitle an HOA to charge “a reasonable fee not to exceed $100 for an inspection of the low owner’s lot if required.” Under Section 11B-106 of the Maryland Homeowner Association Act, sellers are required to provide certain information to prospective purchasers, much of which is often provided by the Association. Under the statute, the Association can charge “a reasonable fee” for providing this information, that does not exceed its actual cost, up to a maximum of $250. House Bill 34 would add an additional fee charge for costs relating to an inspection of the property as part of the resale process. The Bill passed the House of Delegates by a 85 – 44 vote, and is now pending in the Senate.
Maryland General Assembly Considers Bill To Require Written Policies For Homeowner Association Payment Plans
Senate Bill 1115, filed in the Maryland General Assembly, would require homeowner associations to adopt a written policy if it permits payment plans for homeowner fees and other charges. The new law would add Section 11-114.1 to the Maryland Homeowner Association Act, and provide that, if a homeowner association allows members to pay fees and other charges pursuant to a payment plan, the association must develop a written policy that (1) establishes the qualifications needed to participate in a payment plan; and (2) discloses the terms and conditions of the payment plan. The bill would further require the written policy to be transmitted to each homeowner within 30 days of its adoption.
State Senate Bill Would Authorize Common Element Restrictions On Delinquent Unit Owners
Senate Bill 529 in the Maryland General Assembly would authorize condominiums to restrict the use of common elements by unit owners who are delinquent in paying assessments. The proposed law would add new subsection 11-104(e) to the Maryland Condominium Act to provide that the bylaws may contain a provision permitting such restrictions. Under the bill, the restriction on use of the common elements may be imposed on a delinquent unit owner who is not in a payment plan, is delinquent on a payment plan, or has defaulted on a previous payment plan. The law would specifically allow condominium bylaws to be amended to include such a provision.
Proposed Legislation Would Require Condominiums To Give Unit Owners Notice Of A Sale Or Lien Affecting A Common Element
Senate Bill 809 and House Bill 1369, now pending in the Maryland General Assembly, would require a condominium council of unit owners to provide at least 30-days notice to all unit owners of any sale, including a tax sale, of a common element. The bills would add new Subsection 11-108(d) to the Maryland Condominium Act. The legislation would also add new Subsection 14-804(e) to the Tax Article to provide that a council of unit owners must give at least 30-days notice to the unit owners when a tax lien has been imposed on a common element.
The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act. Proposed new Subsection 14-804(e) of the Tax Article would also require notice by a homeowner association when a tax lien is imposed on any common area.
Maryland Legislature Considers Proposal To Reduce Votes Required To Amend Bylaws
House Bill 789, now pending in the Maryland General Assembly, would reduce the percentage of affirmative votes required to amend condominium bylaws. Under Section 11-104(e) of the Maryland Condominium Act, condominium bylaws may only be amended upon a vote of two-thirds (66 2/3 percent) of the unit owners. The proposed legislation would reduce this to 55 percent. Significantly, it would also permit the bylaws themselves to establish an even lower percentage. Additionally, the bill would limit the voting to members in “good standing, ” which is defined as not being more than 90 days in arrears as to assessments, and not in violation of any provision of the declaration, bylaws or rules and regulations. This, of course, could have the affect of further reducing the number of votes required for a bylaw amendment.
The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under Section 11B-116 of the Maryland Homeowners Association Act.
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.