The Maryland Senate failed to vote on SB 670, which would prevent condominium developers from limiting the ability of the council of unit owners and individual unit owners to bring claims for building defect issues.  The House of Delegates version of the bill was approved by a vote of 136-0, but the Senate version did not make to the floor for a vote.  The legislation was intended to prevent condominium developers from limiting the ability of a 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. Under the bill passed by the House, a 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.

 

Maryland Governor, Larry Hogan, has signed into law a bill which will reduce the number votes required to amend condominium and homeowner association bylaws.   What originated as House Bill 789, (now Chapter 480 of the 2017 legislative session), provides for a reduction in the required percentage vote for an amendment of the bylaws from two-thirds to 60 percent.   The original version of the bill passed by the House of Delegates called for a reduction to 55%, but that was ultimately amended in the final version that was passed in both houses of the General Assembly.  Additionally, the bill authorizes adopted bylaws to provide for a percentage lower than 60%.  The new law will also 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 new provisions will take effect on October 1, 2017.

Both houses of the Maryland General Assembly have passed an amended version of legislation that would reduce the number votes required to amend condominium bylaws.   As amended, what originated as House Bill 789 would reduce the required percentage vote for an amendment of the bylaws from two-thirds to 60 percent.   The original version of the bill called for a reduction to 55%, but that was ultimately rejected in the final version.  However, the bill authorizes the bylaws themselves to provide for a percentage lower than 60%.  The law would also 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 approved legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under the Maryland Homeowners Association Act.

Both houses of the Maryland General Assembly have passed legislation that would reduce the number votes required to amend condominium bylaws.  House Bill 789 was approved unanimously in both the House of Delegates and State Senate.  The new law would reduce the required percentage vote for an amendment of the bylaws from two-thirds to 55 percent.  Additionally, it would also permit the bylaws themselves to establish a percentage as low as 51%.  The law would also 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 proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under the Maryland Homeowners Association Act.

The Maryland House of Delegates has passed an amended version of a bill previously approved in the State Senate that 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 bill would add new Subsection 11-108(d) to the Maryland Condominium Act.  Additionally it would add new Subsection 14-804(e) to the Tax Article to provide that a council of unit owners must give 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.

The Maryland Senate Judicial Proceedings Committee has issued a favorable report on legislation, which has already been passed by the House of Delegates, that would reduce the number 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.  Approved 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.

The Maryland State Senate has approved, with amendment, a bill previously passed by the House of Delegates.  House Bill 34, would give homeowner associations the right to collect a fee relating to inspections during the resale process.  The version passed by the House would entitle an HOA to charge “a reasonable fee not to exceed $100 for an inspection of the low owner’s lot if required.”  The Senate Judicial Proceedings Committee changed the maximum amount of the fee to $50, and added “if the inspection is required by the governing documents of the homeowners association.”  As reported in a prior post, the House of Delegates passed its version by a 85 – 44 vote.

By a vote of 47-0, the Maryland State Senate passed Senate Bill 809, which 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 bill would add new Subsection 11-108(d) to the Maryland Condominium Act.  Additionally it would add new Subsection 14-804(e) to the Tax Article to provide that a council of unit owners must give notice to the unit owners when a tax lien has been imposed on a common element.  The final version that passed added language imposing the same notice requirement a developer where the developer maintains control prior to formation of the council of unit owners.

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.  The final version included an amendment imposing the notice requirement on a declarant where the governing body of the association has not yet formed.

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).