A Portion of a Maryland Condominium Assessment Lien Takes Priority Over Mortgages and Deeds of Trust

Under Section 11-110 of the Maryland Condominium Act, in the event of a foreclosure of a mortgage or deed of trust on a condominium unit, a portion of the condominium’s lien for unpaid assessments has priority over the holder of a first mortgage or first deed of trust recorded after October 1, 2011.  That portion must consist of no more than four months, or the equivalent of four months, of unpaid regular assessments for common expenses, and may include interests, costs of collection, late charges, fines, attorney’s fees, special assessments, or any other costs or amounts due.  However, the total may not exceed $1,200.

Condominium Expenditures In Excess of 15 Percent of the Budget Must Approved By Amendment

Where a residential condominium expenditure results in an assessment increase that exceeds 15% of the amount contained in the adopted budget, the expenditure must be approved in an amendment to the budget, except in cases where the expenditure is required to address a threat to health or safety, or a significant risk of damage to the condominium.  Under Section 11-109.2 of the Maryland Condominium Act, the council of unit owners is required to submit an annual budget to the unit owners at least 30 days prior to its adoption, and the adoption of the budget must then occur at an open meeting of the owners.  Thereafter, any expenditure that would result in an increase in the amount of assessments for the current fiscal year that is in excess of 15% of the budgeted amount must be approved in an amendment to the budget adopted at a special meeting of the owners.  Written notice of the special meeting must be given to the owners at least 10 days prior to the meeting date.  There is an express exception for expenditures needed to correct conditions that constitute a threat to health or safety, or present a significant risk of damage to the condominium if not corrected. Read More »

My Opinion/Commentary in The Baltimore Sun – “Apathetic No More”

This piece on the killing of a 3-year-old in a drive-by shooting is running in The Baltimore Sun online now, and will appear in the August 6 print version:

http://www.baltimoresun.com/news/opinion/oped/bs-ed-mckenzie-elliott-20140805,0,422079.story

Ober Kaler Construction Practice Ranked In The Legal 500

I am pleased to report that our Construction Practice Group at Ober Kaler has received a prestigious ranking as a leading law firm in Construction for 2014 by The Legal 500, including special recognition of my condominium practice.  The following is The Legal 500’s description:

“Ober Kaler’s practice is co-chaired by John Morkan and the ‘honest and intelligent’ Joseph Kovars, with a further 16 lawyers spread across its Baltimore and Washington DC offices giving the firm a national scope. Most of its recent work has been government related, such as advising public authorities on heavy highway construction, or assisting private sector clients on government bid protests and PPP projects. Universities and colleges have been a stable client base, though the firm serves all industry sectors, with a strong emphasis on contentious matters. The ‘excellent construction litigation department’ represents private owners in building and construction defect claims, and acts for developers, public authorities, and construction companies. Raymond Burke is ‘an expert among experts in his field’, and has special knowledge of condominium association litigation. The firm is acting as counsel to the US Department of Justice, Antitrust Division andothers regarding the review and analysis of the design and construction of an $850m expansion of a Mexican brewery. It also defended Diamond State Port Corporation in a dispute brought by the contractor arising from alleged breach of contract in connection with the rehabilitation of berth four at the Port of Wilmington. Firm chair John Wolf and Barbara Werther are additional key contacts.”

 

 

 

Raymond Burke Selected to Maryland Super Lawyers for 8th Consecutive Year

PRESS RELEASE:

Raymond Daniel Burke Selected for Maryland Super Lawyers 2014

Prominent Construction Attorney Ranks Among State’s Super Lawyers for Eighth Consecutive Year

BALTIMORE: June 19, 2014. The law firm Ober|Kaler announced today that, for the eighth consecutive year, principal Raymond Daniel Burke has been selected for inclusion in Maryland Super Lawyers 2014 in the Construction Litigation category.  Mr. Burke has been selected every year since Super Lawyer rankings were created in 2007. He is one of the region’s top construction and real estate development lawyers, and has more than thirty years of experience in matters relating to condominium and other multi-use development matters. Read More »

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 »