Proposed House Bill Would Clarify Procedures for Mortgage Holder Approval of Amendments

Legislation being introduced in the 2020 session of the Maryland General Assembly would require holders a mortgage or deed of trust on a condominium unit to provide a written objection in writing to a proposed amendment to the declaration within 60 days of receiving notice, or be deemed to have consented to the amendment.  HB 25 pending in the House of Delegates is intended to address an uncertainty arising from provisions in condominium declarations requiring that mortgagees and holders of deeds of trust approve amendments.  A question has often arisen as to what happens if a mortgage holder receives notice of a proposed amendment, but does not respond.  HB 25 would amend Section 11-103(c) of the Maryland Condominium Act, and establish a 60-day period for holders of mortgages or deeds of trust to respond after receipt of the proposed amendment, or be deemed to have consented.  However, the proposed change does carve out three specific exceptions to the 60-day rule for any amendment that would (1) alter the priority of the lien; (2) materially impair or affect the unit as collateral; or (3) materially impair or affect the right of the holder of the mortgage or deed of trust to exercise any rights under the mortgage, deed of trust, or applicable law.  Amendments falling into those categories would still require actual approval by the mortgagee or deed of trust holder.  It is also noteworthy that the proposed legislation is limited to proposed amendments of the declaration, and does not address provisions requiring that holders of mortgages or deeds of trust approve amendments to the by-laws.

Maryland General Assembly Considers Two Bills That Expand the Condominium Common Element Implied Warranty

House Bill 069 and Senate Bill 379, now pending in the Maryland General Assembly, would apply the condominium implied warranty from a developer to all common elements, and not just those enumerated in the statute, along with any component that the council of unit owners is required to maintain, repair or replace, regardless of whether it is defined as a common element in the governing documents.  Under the current provisions of Section 11-131(d) of the Maryland Condominium Act, there is an implied warranty from a condominium developer to a council of unit owners, which applies to “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements.”  The proposed law would establish that the implied warranty applies “to all common elements, including” those listed in the current law.  Additionally, the bills propose that the implied warranty is applicable “to any portion of the condominium that the council of unit owners is required to maintain, repair, or replace under the [governing documents] regardless of whether the portion of the condominium is designated as a unit or a common element.” (more…)

Maryland General Assembly Considers Bill To Significantly Reduce The Percentage of Votes Needed To Amend a Condo Declaration

House Bill 179 filed in the Maryland General Assembly would reduce the percentage of votes required to amend a condominium declaration.  Under current law, as provided in Section 11-103(c) of the Maryland Condominium Act, “80 percent of the unit owners listed on the current roster” must consent to an amendment of the declaration.  The proposed bill would reduce the required percentage to 60 percent.  Moreover, it would potentially have the effect of further reducing the number of affirmative votes needed by changing the voting pool from including “the unit owners listed on the current roster” to including only “unit owners in good standing.”  “Good standing” is defined in the bill as “not being more than 90 days in arrears in the payment of any assessment or charge due to the condominium.”  Accordingly, unit owners who do not qualify as being in “good standing” would be excluded from the pool of voters, of which 60 percent would be need to approve an amendment.

The Maryland Condominium Act Contains Specific Requirements For Adopting Rules and Regulations

While the governing documents of some condominiums contain procedures for the adoption of rules and regulations, most do not.  As a result, it is often assumed that rules and regulations may be adopted in the same manner as any other enactment by the condominium’s board of directors or other governing body.  However, Section 11-111 of the Maryland Condominium Act contains specific requirements for the adoption of rules and regulations with which condominium’s must comply.  Indeed, the CPA establishes minimum standards that must be met, regardless of any provisions contained in the condominium’s governing documents. (more…)

Chesapeake Chapter of the Community Associations Institute Holds Another Successful Symposium

Thanks to all of the members of the Chesapeake Region Chapter of the Community Associations Institute who helped make the 2014 Annual Symposium & Expo a well- attended success.  Ober Kaler was proud to serve as an event sponsor, and to also sponsor a bus so that Eastern Shore members could attend the October 21 event at Martin’s West in Baltimore County.  Special thanks to all those whos stopped by the Ober Kaler table and discussed this blog.

Maryland Senate Bill Would Require That Residential Property Managers Be Registered

Senate Bill 274, now pending before the Maryland General Assembly, would require that residential property managers for condominiums, cooperatives and homewoner associations be registered with the Maryland Department of Licensing and Regulation.  Unlike House Bill 10, which calls for a licensing process, the Senate proposal would have the Department issue registration certificates that would be renewed every two years.  An applicant, in addition to paying a registration fee, would be requried to identify all of the communities that they mangage, and certify that they are covered by fidelity insurance.  The Department would be authorized to establish other requirements for registrants, and to investigate complaints alleging a failure to comply with the applicable provisions, or refer complaints to the State’s Attorney’s Office..  Failures to comply could result in misdemeanor and fine.