Florida Condo Collapse Is a Lesson For Everyone

The tragic collapse of the Champlain Towers Condominium in Surfside Florida, and the horrific consequences to residents and their families, will, no doubt, continue to be the subject of multiple news reports and long-term investigations.  And it will be some time before we learn the true cause of the disaster, and how it might have been prevented.  But the fundamental issue — deteriorated building conditions — is something about which all condominium unit owners and property managers need to be especially conscientious.  Previously, I have written about the high importance of regular building evaluations by competent consultants.  As a practical matter, these studies are necessary in order for an association to have information needed to develop accurate budgets for maintenance and reserves.  Of equal importance to conducting a building survey, however, is properly allocating funds to address any conditions that the report identifies.  The fact that the Maryland Condominium Act requires that condominiums adopt annual budgets that specifically include reserves and capital items indicates that the association must have a detailed understanding of its buildings if the specified budget items are to present a meaningful picture of building maintenance issues.  The fact that the Condominium Act, and most condominium governing documents, makes the council of unit owners responsible for maintenance, repair and replacement of the common elements creates potential liability where due diligence as to building conditions is not properly undertaken.  Most often, the consequences of failing to adhere to good maintenance practices are financial — resulting in expensive repair projects and burdensome special assessments.  But as Champlain Towers demonstrates, some building conditions can lead to far more dreadful results.

Proposed Bill Relating To the Period of Developer Control Passes the House But Does Not Reach the Floor In the Senate

A bill that proposed significant changes to the Maryland Condominium Act, as well as the Maryland Homeowner Association Act, concerning the period during which the developer is in control of the council of unit owners or the homeowner association, was passed in the House of Delegates by a vote of 101 – 31.  However, it was never brought to a vote in the Senate.   As it relates to condominiums, the bill would require that the developer hold at least two meeting per year, rather than the current one annual meeting, and that the unit owners have an opportunity to comment on condominium matters during those meetings.   Additionally the bill would require that, if the condominium has a board of directors, within 30 days after 25% of the units have been titled to unit owners, the developer must appoint a board member who is a unit owner and not otherwise affiliated with the developer; and that, if there is no board at that time, a board must then be established  The bill would further require the developer to disclose any governmental bonds affecting the project, and provide notice in advance of requesting release of any such bonds.  Also, it would be required that the maintenance of the condominium’s books and records begin on the date that the council of unit owners is established, and that the condominium’s books and records be kept separate and apart from those of the developer.  The House approved similar changes to the Maryland Homeowner Association Act.  In the Senate, the bill was referred to the Judicial Proceedings Committee, which is as far as it went during the 2021 legislative session.

House Bill 352 Proposes New Requirements During the Period that the Condominium Is Under the Control of the Developer

A bill proposed in the Maryland House of Delegates would make significant changes to the Maryland Condominium Act that relate to the period during which the developer is in control of the council of unit owners.  House Bill 352 would require that the developer hold at least two meeting per year, rather than the current one annual meeting, and that the unit owners have an opportunity to comment on condominium matters during those meetings.   Additionally the bill would require that, if the condominium has a board of directors, within 30 days after 25% of the units have been titled to unit owners, the developer must appoint a board member who is a unit owner and not otherwise affiliated with the developer; and that, if there is no board at that time, a board must then be established  The bill would further require the developer to disclose any governmental bonds affecting the project, and provide notice in advance of requesting release of any such bonds.  Also, it would be required that the maintenance of the condominium’s books and records begin on the date that the council of unit owners is established, and that the condominium’s books and records be kept separate and apart from those of the developer.  The bill proposes similar changes to the Maryland Homeowner Association Act.

Required Disclosure of Defects In Home Sales Applies Only To Single Family Residential Property Improved By Less Than Five Units

Compliance with Section 10-702 of the Maryland Real Property Code has been a source of some considerable discussion.  It requires that a home seller provide the buyer with a either a “disclosure statement,” by which information is provided relating to the seller’s knowledge of defects, or a “disclaimer statement,” which applies to “as is” sales, but still requires disclosure of “latent defects.”  It should be noted, however, that neither statement is required in connection with the sale of a unit in a property containing five or more units, because the statute expressly applies “only to single family residential property improved by four or fewer units.”  In the sale of a condominium unit, disclosure requirements are governed by Section 11-135 of the Maryland Condominium Act, which requires certain disclosures by both the council of unit owners and the selling unit owner.

Raymond Burke Among Baker Donelson Attorneys Named “Best Lawyers in America”

 

Each year, The Best Lawyers in America designates a select group of individuals as “Lawyers of the Year” in high-profile specialties in large legal communities. Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant. Lawyers being honored as “Lawyer of the Year” are selected based on particularly impressive voting averages received during the exhaustive peer-review assessments that Best Lawyers® conducts with thousands of leading lawyers each year.

To view the full list of selected attorneys selected and the practice areas in which they are recognized, click here.