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Proposed Maryland Legislation Would Expressly Authorize Baltimore County Homeowner Associations To Bring Nuisance Actions

House Bill 496, now pending in the Maryland General Assembly, would give express authority to Homeowner and Community Associations in Baltimore County to bring a court action seeking relief from or abatement of an alleged nuisance.  Under current Section 14-125 of the Real Property Article, “community associations” have authority to seek injunctive or other relief in the Circuit Court for Baltimore County for abatement of a nuisance.  However, a community association” is limited to a “non-profit corporation.”   The proposed legislation would broadly expand the definition of a “community association” to include a “non-profit association, corporation, or other organization.”  Current law also requires that “community associations” be comprised of “at least 20% of the total number of households as members, with a minimum of 40 or more individual households as defined by specific geographic boundaries in the bylaws or charter of the community association.”  The proposed legislation would do away with these requirements, and simply require that the association, corporation or other organization be “composed of residents of a community defined by specific geographic boundaries.”  As such, it could be read to apply to condominium councils of unit owners as well as homeowner associations.

Bill In the Maryland General Assembly Would Permit Restrictions and Prohibitions On Smoking By Condos, HOAs and Landlords

House Bill 500, now pending the Maryland General Assembly, provides for a proposed amendment to Section 11-104 of the Maryland Condominium Act that would allow a condominium’s bylaws to include “a restriction or prohibition on smoking tobacco products within the units or in the common elements.”  The proposed legislation would also amend Section 11-111 to authorize a council of unit owners to adopt a rule imposing such a restriction or prohibition.

The bill also would also add new Section 11B-111.7 to the Maryland Homeowners Association Act, which would permit a homeowner association to “include in its declaration, bylaws, rules, or recorded covenants and restrictions a provision that restricts or prohibits the smoking of tobacco products in any multi-unit dwelling or in the common areas.  A “multi-unit dwelling” is defined in the bill as “a town house, a row house, or any other individually owned dwelling unit that shares a common wall, floor, or ceiling with another individually owned dwelling unit.”

The proposed legislation would also amend Maryland Real Property Code Section 8-208 to permit landlords to include in written residential leases “a restriction or prohibition on smoking tobacco products within the dwelling unit or elsewhere on the premises.”

 

Bills Proposed In Maryland General Assembly To Limit Restrictions Imposed By Condominium Developers On The Ability Of The Council And Unit Owners To Assert Construction Defect Claims

Proposed legislation now pending in the Maryland General Assembly would prevent condominium developers from limiting the ability of the council of unit owners and individual unit owners to bring construction defect claims for issues affecting the condominium.  Senate Bill 670 and House Bill 676 would prevent developers from including certain provisions in condominium governing documents or contracts of sale that act as an impediment to claims.  Specifically, the proposed legislation relates 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, the developer may not include provisions that:

(a) Shorten the statute of limitations for filing claims;

(b) Waives application of the “discovery rule” for purposes of determining when a claim accrued;

(c) Requires the council or a unit owner in an arbitration proceeding to assert a claim within a period shorter than the applicable statute of limitations; and

(d) operates 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. (more…)

Maryland General Assembly Again Considers Registration Requirement For Common Ownership Communities

House Bill 41 now pending in the Maryland General Assembly would require condominiums, homeowner associations and cooperative housing corporations to register annually with the Maryland Department of Assessments and Taxation. Similar to a bill that was filed during the 2016 session but did not pass, the proposed law would require registration information that includes the name and contact information for each officer, board member, and property manager. along with such other information as the Department might require.  The bill proposes a $3 registration fee, and a $50 fine for failing to register.

Maryland Federal Court Approves Residential Sales Contract Provision Creating a One-Year Period of Limitations

In Daniels v. NVR, Inc., t/a Ryan Homes, the United States District Court for the District of Maryland upheld the validity of a contractual provision in a residential home purchase agreement that reduced the normal period of limitations for filing suit to one-year, despite the fact that the parties had entered into a tolling agreement.  In Maryland, the general period of limitations applicable to most civil claims is the three-year period established in Md. Cts. & Jud. Proc. Code Ann. Sec. 5-101.  This case involved construction defect claims concerning a newly constructed home.  The NVR purchase agreement contained a provision that made claims and disputes subject to a one-year period of limitations. The Court, which had jurisdiction on diversity found that this was not inherently unreasonable, and, therefore, was fully enforceable.

Interestingly, the parties had entered into a tolling agreement, which suspended the running of limitations during attempts to come to a resolution of the issues.   However, NVR successfully argued that the tolling agreement only suspended “statutes of limitations,” and did not toll a “contractual limitations period.”

Mandatory Requirements for Adoption of an Annual Budget

The Maryland Condominium Act, at Section 11‑109.2, makes mandatory an annual budget, and requires that the proposed budget be submitted to the unit owner membership at least 30 days before it is adopted.  It is also required that the budget contain seven specific line items.  These line items — income, administration, maintenance, utilities, general expenses, reserves, and capital items — must be set forth in the budget without exception and without to regard to any other line items that may be included.  The adoption of the budget is required to take place at an open meeting of the owners.  Here is the complete test of Section 11-109.2:

(a)        Preparation and submission.—The council of unit owners shall cause to be prepared and submitted to the unit owners an annual proposed budget at least 30 days before its adoption.

(b)        Items required to be included. – The annual budget shall provide for at least the following items:

(1)  Income;

(2)  Administration;

(3)  Maintenance;

(4)  Utilities;

(5)  General expenses;

(6)  Reserves; and

(7)  Capitol items.

(c)        Adoption. – The budget shall be adopted at an open meeting of the council of unit owners or any other body to which the council of unit owners delegates responsibility for preparing and adopting the budget.  (more…)

No Contract – No Tort Claim – My Article in the August Edition of “Building Baltimore

Please see the August edition of Building Baltimore Magazine for my article on the Maryland Court of Appeals decision in Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kalh, LLP.  The case established that the economic loss doctrine precludes claims for alleged negligent design by a contractor against a design professional where there is no contract between them.   Building Baltimore Magazine is a publication of Associated Builders & Contractors, Inc. – Baltimore.  You can also read the entire article here by clicking the “more” button. (more…)

The Law In Maryland Does Not Recognize A Scientifically Established Causal Connection Between Exposure To Conditions In Water Damaged Buildings and Human Illness

I frequently receive questions about illnesses related to exposure to microbial growth and other conditions in water damaged buildings, and whether such medical conditions can form the basis of a personal injury claim.  Molds, of course, are generally recognized as allergens that can trigger respiratory symptoms in certain individuals.  For that reason, mold in buildings is considered an environmental issue that requires proper remediation.  Moreover, mold damages building components if left unaddressed.  However, repairs needed to remediate a water damaged building, and proof of a causal connection between exposure to specific molds and a particular symptom in an individual, are very different matters.   In the case of Montgomery Mutual Insurance Co. v. Chesson, , 206 Md.App. 569 (2012), the Maryland Court of Special Appeals found “that there is a genuine controversy within the scientific community with regard to whether exposure to water damaged buildings causes human health effects.”  As a result of the Court’s determination that “there is no consensus in the relevant scientific community that exposure to mold causes” medical injury, the testimony of a physician that mold exposure had caused illness was deemed to be inadmissible. (more…)

Maryland General Assembly Did Not Enact a Bill That Would Have Required Associations To Register With the State

A bill that would have required common ownership communities to register with the State did not come to a vote on the floor of the Maryland General Assembly during 2016 session.  House of Delegates Bill 1061 would have required common ownership communities — including residential condominiums, homeowner associations and cooperatives — to register each year with the Maryland Department of Assessments and Taxation.