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Maryland House of Delegates Passes Legislation That Would Drastically Limit The Liability Of Condo Councils In Claims For Fraudulent Or Inaccurate Resale Certificates

by | Apr 3, 2015

By a vote of 140-0, the Maryland House of Delegates passed an amended version of HB1007, which, as discussed in my prior post, was intended to limit the fee charged by condominium councils of unit owners for providing required information in connection with the resale of a unit.   Most significantly, the amended version limits the liability of a council of unit owners for errors and omissions in the content of the resale certificate to the amount of the fees paid for the certificate.  It makes not distinction as to whether such errors or omissions are intentional.  This is contrary to, and is seemingly in response to, a ruling of the Maryland Court of Appeals.  In a unanimous opinion filed on April 30, 2012, the  Court of Appeals, in the case of MRA Property Management, Inc., et al. v. Armstrong, established that provisions the Maryland Consumer Protection Act apply to the information contained in a condominium resale certificate, and a council of unit owners and property manager can be liable for unfair and deceptive trade practices if the information has a tendency to mislead the purchaser, even though they are not party to the sales contract, and even if they have otherwise complied with the condominium resale disclosure requirements contained in Section 11-135 of the Maryland Condominium Act.  The bill passed by the House would abrogate this ruling, and limit the council’s liability to “the amount paid for the certificate.”  This would leave defrauded purchasers with recourse only against a management company. (more…)

Maryland General Assembly Considering Limit On Fees Charged For Condo Resale Certificates and Providing That An HOA Must Provide Resale Information

by | Mar 12, 2015

Legislation has been introduced in the Maryland House of Delegates that would limit the fee charged by condominium councils of unit owners for providing required information in connection with the resale of a unit.  House Bill 1007 would also require requested information to be provided by a Homeowners Association as part of the sale of a home in the community.

Under Section 11-135(c) of the Maryland Condominium Act, within 20 days after receiving a written request from a unit owner, the council of unit owners is required to provide a certificate containing information concerning the community that is required to be disclosed to a potential purchaser under that section of the statute.  The law presently provides that the council may charge the unit owner for its costs in furnishing the material.  The proposed legislation would limit this charge to the lesser of $250 or the actual costs.

Under Section 11B-106(b) of the Maryland Homeowners Association Act, a homeowner who is selling their property is required to furnish the potential purchaser with certain information about the community.  The proposed legislation would add a new subsection (c) to the statute that would require the homeowners association to provide that information upon request of the selling homeowner.  It would impose the same limit of the fee charged for providing this material; i.e., the lesser of 250 or the actual cost. (more…)

Legislation In Maryland General Assembly Would Protect Condo Construction Defect Claims

by | Feb 20, 2015

The Maryland General Assembly is again considering legislation that would prevent 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. Senate Bill 570 and House Bill 829 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. The proposed new law would also preclude limits on the rights of condominium councils or individual unit owners to bring claims relating to an alleged failure of the developer to comply with building codes, county approved plans and specifications, product manufacturer’s installation instructions, and other construction industry standards. Proposed new Section 11-134.1 of the Maryland Condominium Act would prohibit provisions designed to prevent the filing of a claim within the applicable period of limitations or prevent claims from accruing pursuant to the “discovery rule.” The new law would also preclude provisions requiring a vote of the unit owners approving the initiation of a claim, unless such a requirement is adopted after the unit owners assume control of the community from the developer. (more…)