by Raymond Daniel Burke | Oct 1, 2014
Where a residential condominium expenditure results in an assessment increase that exceeds 15% of the amount contained in the adopted budget, the expenditure must be approved in an amendment to the budget, except in cases where the expenditure is required to address a threat to health or safety, or a significant risk of damage to the condominium. Under Section 11-109.2 of the Maryland Condominium Act, the council of unit owners is required to submit an annual budget to the unit owners at least 30 days prior to its adoption, and the adoption of the budget must then occur at an open meeting of the owners. Thereafter, any expenditure that would result in an increase in the amount of assessments for the current fiscal year that is in excess of 15% of the budgeted amount must be approved in an amendment to the budget adopted at a special meeting of the owners. Written notice of the special meeting must be given to the owners at least 10 days prior to the meeting date. There is an express exception for expenditures needed to correct conditions that constitute a threat to health or safety, or present a significant risk of damage to the condominium if not corrected. (more…)
by Raymond Daniel Burke | Jun 17, 2014
During 2010 legislative session, then Maryland General Assembly enacted an amendment to Section 10-131 of the Maryland Condominium Act governing the warranty period for the implied warranties on the common elements of a condominium. Originally, the warranty on common elements commenced “with the first transfer of title to a unit owner” and ran for three years. This provision gave rise to problems in enforcing the warranty in communities where unit sales were slow, and a majority of the units remained unsold for an extended period of time. In such cases, majority control of the condominium remained in the hands of the developer well into, and sometimes beyond, three years following the transfer of title to the first unit. As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of three years from the first transfer of title, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.” However, it is important to note that the legislation provided that it would only apply prospectively from the time of its enactment on October 1, 2010. Accordingly, any condominium with a declaration, bylaws and plat recorded prior to that date is governed by the original version of the statute, requiring that the warranty commence upon the first transfer of title to a unit and runs for three years.
Common element warranties in condominiums created prior to October 1, 2010 are always governed by the original provision, regardless of when the unit owners took control. Common element warranties in condominiums created after October 1, 2010 may be governed by either the original provision or the amendment. If three years after transfer of title to the first unit is later than two years after the unit owners take control, the original provision applies. If, however, two years after the unit owners take control is later than three years after transfer of title to the first unit, the amendment applies. (more…)
by Raymond Daniel Burke | May 14, 2014
In terms of the accrual of causes of action, Maryland abides by the discovery rule, through which a cause of action arsies when it is disovered or should have been discovered in the exercise of reasonable diligence. Once discovered, a claim must then be instituted within 3 years under Maryland’s general statute of limitations. However, where construction defects are concerned, the discovery rule does not permit building defect claims in older properties. Under Maryland’s Statute of Repose, construction defect claims are absolutely barred after 20 years, regardless of when they were or could have been discovered. Additionally, architects, professional engineers and contractors can be held liable for building defects for just 10 years after construction. The full statute is set forth in the Courts & Judicial Proceedings Code of the Annotated Code of Maryland at Section 5-108.
by Raymond Daniel Burke | May 13, 2014
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…)
by Raymond Daniel Burke | May 6, 2014
The Maryland House of Delegates failed to take action on House Bill 259, which would have prevented 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. The Maryland Senate, by a vote of 36 – 11, passed Senate Bill 207, which 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. However, the House version died the Environmental Matters Committee. (more…)
by Raymond Daniel Burke | May 5, 2014
The Maryland General Assembly failed to take action on a bill that would require condominiums to remove limits on the number or percentage of units that can be rented, if the unit owner demonstrates “financial hardship” and meets certain other requirements. House Bill 1039 proposed to establish new Section 11-111.4 in the Maryland Condominium Act, and provide that unit owners who meet one of the bill’s six definitions of financial hardship may request a waiver from any rental limitations applicable to the community. The unit must be the owner’s primary residence, and the appraised value of the unit must be less than 90% of what is owed.
