The tragic collapse of the Champlain Towers Condominium in Surfside Florida, and the horrific consequences to residents and their families, will, no doubt, continue to be the subject of multiple news reports and long-term investigations. And it will be some time before we learn the true cause of the disaster, and how it might have been prevented. But the fundamental issue — deteriorated building conditions — is something about which all condominium unit owners and property managers need to be especially conscientious. Previously, I have written about the high importance of regular building evaluations by competent consultants. As a practical matter, these studies are necessary in order for an association to have information needed to develop accurate budgets for maintenance and reserves. Of equal importance to conducting a building survey, however, is properly allocating funds to address any conditions that the report identifies. The fact that the Maryland Condominium Act requires that condominiums adopt annual budgets that specifically include reserves and capital items indicates that the association must have a detailed understanding of its buildings if the specified budget items are to present a meaningful picture of building maintenance issues. The fact that the Condominium Act, and most condominium governing documents, makes the council of unit owners responsible for maintenance, repair and replacement of the common elements creates potential liability where due diligence as to building conditions is not properly undertaken. Most often, the consequences of failing to adhere to good maintenance practices are financial — resulting in expensive repair projects and burdensome special assessments. But as Champlain Towers demonstrates, some building conditions can lead to far more dreadful results.
House Bill 352 Proposes New Requirements During the Period that the Condominium Is Under the Control of the Developer
A bill proposed in the Maryland House of Delegates would make significant changes to the Maryland Condominium Act that relate to the period during which the developer is in control of the council of unit owners. House Bill 352 would require that the developer hold at least two meeting per year, rather than the current one annual meeting, and that the unit owners have an opportunity to comment on condominium matters during those meetings. Additionally the bill would require that, if the condominium has a board of directors, within 30 days after 25% of the units have been titled to unit owners, the developer must appoint a board member who is a unit owner and not otherwise affiliated with the developer; and that, if there is no board at that time, a board must then be established The bill would further require the developer to disclose any governmental bonds affecting the project, and provide notice in advance of requesting release of any such bonds. Also, it would be required that the maintenance of the condominium’s books and records begin on the date that the council of unit owners is established, and that the condominium’s books and records be kept separate and apart from those of the developer. The bill proposes similar changes to the Maryland Homeowner Association Act.
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We are pleased to announce that Mr. Burke has completed mediation and conflict resolution skills training requirements, and been certified as a mediator, including qualification as a court-designated mediator for alternative dispute resolution procedures in all Maryland Courts. He may be retained for mediation services, as well as for representation in construction, condominium and homeowner association matters, through Baker Donelson, 100 Light Street, 19th Floor, Baltimore, Maryland 21202, 410-862-1192, firstname.lastname@example.org.
Maryland Senate Committee Approves Amendment To Bill Allowing HOAs To Collect Fees For Resale Inspections
The Maryland State Senate has approved, with amendment, a bill previously passed by the House of Delegates. House Bill 34, would give homeowner associations the right to collect a fee relating to inspections during the resale process. The version passed by the House would entitle an HOA to charge “a reasonable fee not to exceed $100 for an inspection of the low owner’s lot if required.” The Senate Judicial Proceedings Committee changed the maximum amount of the fee to $50, and added “if the inspection is required by the governing documents of the homeowners association.” As reported in a prior post, the House of Delegates passed its version by a 85 – 44 vote.
By a vote of 135-1, the Maryland House of Delegates has passed House Bill 651, which would require condominiums and homeowner associations to conduct reserve studies of the common elements and common areas. As discussed in an earlier post, the new law would provide that, within 90-days of the meeting at which the unit owners assume control of the council, a reserve study must be conducted of the common elements, and the condominium must conduct a reserve study every five years thereafter. Condominiums established before October 1, 2017 that had a reserve study conducted on or after October 1, 2013 are required to undertake an additional reserve study five years after the previous one, and every five years thereafter. Condominiums established before October 1, 2017 that have not had a reserve study undertaken on or after October 1, 2013 must conduct a reserve study on or before October 1, 2018, and every five years thereafter.
Also under the bill, similar reserve study requirements would be established for the common areas in homeowner associations.