As I have previously written, the information contained in condominium resale disclosure certificates must be carefully reviewed for accuracy, so as to avoid exposing the community to liability for misleading information that does not present a clear picture of the financial obligations that may await a prospective purchaser. Indeed, in MRA Property Management, Inc., et al. v. Armstrong, the Maryland Court of Appeals established that provisions of 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. In light of amendments to Section 11-135 enacted after the Court decision during the 2016 legislative session, it is important that councils of unit owners have the most recent version available. Be certain that the version you are using refers to the inclusion of the amendments enacted under Chapter 735, Acts 2016 that were effective as of October 1, 2016.
The Maryland House of Delegates, by a vote of 99- 39, has passed House Bill 41, which would require residential condominiums, homeowner associations and cooperative housing corporations to register annually with the Maryland Department of Assessments and Taxation. The proposed law would require registration information that includes the name and contact information for the property manager, or, if the community does not employ a property manager, a person designated to answer inquiries on behalf of the community. Original language requiring the names and contact information for each officer and board member was removed in the final version of the bill. Also deleted from the final version was a provision that would have permitted the Department to require additional information. The final version of bill gives the Department authority to establish a registration fee not to exceed $10 per year. The bill proposes a$50 fine for failing to register.
I will be speaking today (March 9) at the Maryland Construction Law Institute seminar at the Ecker Business Training Center, 6751 Columbia Gateway Drive, Columbia, Maryland 21046. My subject we be “Condominium and New Home Warranties and Rights of Action.”
House Bill 41 now pending in the Maryland General Assembly would require condominiums, homeowner associations and cooperative housing corporations to register annually with the Maryland Department of Assessments and Taxation. Similar to a bill that was filed during the 2016 session but did not pass, the proposed law would require registration information that includes the name and contact information for each officer, board member, and property manager. along with such other information as the Department might require. The bill proposes a $3 registration fee, and a $50 fine for failing to register.
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…)
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.
Both houses of the Maryland General Assembly rejected bills that would have created a regulatory system for property managers. Senate Bill 274 died in the Judicial Proceedings Committee, while House Bill 10 suffered the same result in the Environmental Matters Committee. Each bill would have brought residential property managers for condominiums, cooperatives and homewoner associations under the jurisdiction of the Maryland Department of Licensing and Regulation. The Senate bill called for a registration process, while the more broad House version would have established a formal licensing procedure. (more…)
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 in the 2014 session of the Maryland General Assembly to regulate property managers of residential communities includes provisions that would require property managers to file a fidelity bond or proof of insurance with the Secretary of the Department of Licensing and Regulation. House Bill 10, in addition to requiring that property managers be licensed, would require that any property manager entering into a contract to provide management services to a condominium, cooperative or homeowners association file proof of a fidelity bond, theft insurance, or other comparable written insurance as may be required by the proposed State Board of Common Ownership Community Managers. The bond or insurance would be required to provide coverage in the lesser amount of $2 million or the highest aggregate amount of the operating and reserve balances of the community under the contract during the prior three months.
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.