Commercial Condominiums

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.

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…)

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.

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.

Legislation pending the the Maryland General Assembly would require Homeowners Associations to provide information needed by a lot owner in connection with a pending re-sale of their home.  House Bill 412 and Senate Bill 229 would both require Homeowners Associations to make re-sale disclosure information available upon written request of a lot owner.  Presently, Section 11B-106 of the Maryland Homeowners Association Act provides that certain information be provided to a prospective purchaser in the community, and that certain information be included in the contract of sale.  The proposed legislation provides that, within twenty days of receiving a written request from the selling owner, the Association must provide the information necessary for the owner to comply with the disclosure requirements.  It also limits the fee that could be charged to the owner for preparing the information to the actual cost up to a maximum of Fifty Dollars.  Both bills also would impose this same Fifty Dollar limit in charges by condominium councils of unit owners for furnishing the re-sale disclosure information they are required to provide under Section 11-135 of the Maryland Condominium Act.

As occurred previously in the most recent legislative sessions, a bill has been filled in the 2014 Maryland General Assembly that propose to establish provisions for the licensing and regulation of property managers of residential communities.  House Bill 10 would both amend the Business Occupations and Professions Article of the Maryland Annotated Code to create a State Board of Common Ownership Community Managers in the Department of Licensing and Regulation to issue licenses to the managers of “common ownership communities,” which include condominiums, cooperatives and homeowner associations.  Such a license would be required before any individual would be permitted to provide property management services to communities in the State.  Applicants would be required to complete a training program and pass an examination, along with paying a licensing fee.  The licenses would be issued for two years, and would be renewable upon submission of a renewal applciation and fee.

I have received some questions regarding the new law, which took effect on October 1, 2013, that limits the basis for foreclosure of a lien on a condominium unit by the council of unit owners and foreclosure of a lien on a property by a homeowners association.  The new law  modifies Section 14-204 of the Real Property Article of the Maryland Annotated Code to prohibit condominiums and homeowners associations from foreclosing on liens for anything other than delinquent periodic or special assessments; meaning that unpaid fines may not be the basis for a lien foreclosure.  Additionally, the new law requires that related costs and fees be limited to “reasonable costs and attorney’s fees directly related to the filing of the lien and not exceeding the amount of the delinquent assessments.”  Unpaid fines and other charges may still form the basis of a lien, but the lien may not be foreclosed on the basis. (more…)

The Ocean City Condo Show is this weekend at the R.E. Powell Ocean City Convention Center, Saturday, October 26 and Sunday, October 27.  Please look for the ad for this  blog in the show program and in this  week’s edition of The Bayside Gazette  and Ocean City Today.

Under Section 11-127 of the Maryland Condominium Act, devel0pers  of condominiums are required to file a Public Offering Statement with the Maryland Secretary of State.  Until the Public Offering Statement is registered, and until 10 days after all amendments have been filed, a contract for the sale of any unit may not be entered into, and any such contracts are void.  Additionally, under Section 11-126 of the Maryland Condominium Act, the initial purchaser of a condominium unit must receive a copy of the Public Offering Statement at or before the time the contract of sale is entered into, or the contract is unenforceable by the seller.  Such contracts of sale are also required to contain, in conspicuous type, a notice of the purchaser’s right to receive a Public Offering Statement.

The Maryland Court of Appeals has affirmed a decsion of the Court of Special Appeals ruling that certain expert testimony is not admissible to support medical clams arising from exposure to mold and other environmental byproducts of damp buildings.  Such claims are often supported by a medical analysis known as “differential diagnosis” and sometimes referred to as “repetitive exposure protocol,” which as been used by physicians to attribute various medical symptoms to inhalation of mold in water-damaged buildings.  Rather than demonstrating a specific exposure to a specific mold resulting in a specific reaction,  differential diagnosis uses a process that “rules out” or “rules in” possible causes of symptoms a patient is experiencing to determine that their symptoms are related to exposure to mold.  Differential diagnosis has been frequently used to show an association between exposure to mold in wet buildings and certain human health effects.  In its opinion in the case of Montgomery Mutual Insurance Co. v. Chesson, the Maryland Court of Special Appeals held that this method is not sufficiently accepted in the scientific community so as to be used as a basis for medical testimony in mold cases.  The Court of Special Appeals reversed a trial court ruling that found such medical testimony to be reliable and admissible.  Maryland’s highest court, the Court of Appeals, has now affirmed the Court of Special Appeals decision.  Chesson v. Montgomery Mutual Insurance Co., Case No. 97, Sept. Term 2012. (more…)