Individual Unit Owners

Governor Larry Hogan has signed into law House Bill 575, which permits a condominium declaration to provide for the suspension of the use of parking or recreational facility common elements by a unit owner who is more that sixty (60) days in arrears in the payment of assessments.  The new law, which takes effect on October 1, 2018, will add new Section 11-103(d) to the Maryland Condominium Act, requiring that, prior to any suspension of privileges, the council of unit owners must first send a demand letter giving the unit owner ten  (10) days in which to pay the arrearage, or request a hearing to contest the suspension.  If a hearing is requested, the council must provide notice and hold the hearing before a suspension of privileges may be implemented.  The new law further provides that a condominium declaration may be amended to add or repeal such a provision for suspension of privileges by the affirmative vote of sixty percent (60%) of the unit owners.  House Bill 575 was passed unanimously by both the House of Delegates and State Senate.

Maryland Governor Larry Hogan has approved a new law intended to prevent condominium developers from including provisions in the project’s governing documents and sales contracts that limit the ability of the unit owners to bring claims for construction defects.  The provisions of Senate Bill 258 and House Bill 77 will now become law as of October 1, 2018.  New Section 11-134.1 of the Maryland Condominium Act protects claims relating to the developer’s failure to comply with applicable building codes; approved plans and specifications; product manufacturer’s installation instructions; or the implied warranties provided under Maryland law.  The new law prohibits a developer from including language in the condominium’s governing documents or in the purchase agreements that (1) shortens the applicable statute of limitations; (2) waives the application of the discovery rule or other means of determining the claim’s accrual date; (3) requires that the claim be submitted to arbitration within a period shorter than the applicable statute of limitations; or (4) operates to prevent the assertion of a claim within the applicable statute of limitations.  The new law expressly only applies prospectively, and does not affect any governing documents recorded or contracts executed prior to October 1, 2018.

 

The House of Delegates of the Maryland General Assembly has passed legislation that authorizes a condominium declaration to provide for the suspension of  the use of parking or recreational facility common elements by a unit owner that is more than 60 days in arrears in the payment of assessments.  House Bill 575 would amend Section 11-103 of the Maryland Condominium Act by adding new subsection (d).  The measure would require the condominium to provide the delinquent unit owner with 10 days notice, within which the unit owner may pay the delinquent assessment or request a hearing to contest the suspension.  The proposed law also allows an amendment to a declaration to add such a suspension provision with the approval of only 60% of the unit owners, regardless of what super majority is otherwise called for in the governing documents.  The bill is now under consideration in the Senate.

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.

Both the Senate and House of Delegates are considering legislation that would preclude a condominium developer from including provisions in the community’s governing documents or the sales contracts that limit the ability of the council of unit owners or individual unit owners to bring claims against the developer for construction defects.  Senate Bill 258 and House Bill 77 are similar to legislation that was introduced and passed in the House during the 2017 legislative session.  The proposed new law would cover claims relating to the developer’s failure to comply with applicable building codes; approved plans and specifications; product manufacturer’s installation instructions; or the implied warranties provided under Maryland law.  The legislation would prevent a developer from including language in the condominium’s governing documents or in the purchase agreements that (1) shortens the applicable statute of limitations; (2) waives the application of the discovery rule or other means of determining the claim’s accrual date; (3) requires that the claim be submitted to arbitration within a period shorter than the applicable statute of limitations; or (4) operates to prevent the assertion of a claim within the applicable statute of limitations. (more…)

The Maryland Court of Appeals has invalidated a rule adopted by a condominium to suspend access to common elements for unit owners who are delinquent in paying assessments.  In an opinion issued on June 23, 2017 in the case of Elvation Towne Condominium Regime II, Inc. v. Rose, No. 33, Sept. 2016, the Court held that, in order to restrict access to the common elements as a means of enforcing payment of condominium assessments, such a restriction must be provided in the condominium’s declaration.  It may not be adopted by rule promulgated by the board of directors.  The ruling affirmed prior rulings in the case by the Circuit Court for Anne Arundel County and the Maryland Court of Special Appeals. (more…)

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.

 

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.

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).

By a vote of 135-0, the Maryland House of Delegates has passed legislation that would reduce the percentage of affirmative 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.  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.