Maryland General Assembly Considers Two Bills That Expand the Condominium Common Element Implied Warranty

House Bill 069 and Senate Bill 379, now pending in the Maryland General Assembly, would apply the condominium implied warranty from a developer to all common elements, and not just those enumerated in the statute, along with any component that the council of unit owners is required to maintain, repair or replace, regardless of whether it is defined as a common element in the governing documents.  Under the current provisions of Section 11-131(d) of the Maryland Condominium Act, there is an implied warranty from a condominium developer to a council of unit owners, which applies to “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements.”  The proposed law would establish that the implied warranty applies “to all common elements, including” those listed in the current law.  Additionally, the bills propose that the implied warranty is applicable “to any portion of the condominium that the council of unit owners is required to maintain, repair, or replace under the [governing documents] regardless of whether the portion of the condominium is designated as a unit or a common element.” (more…)

Bills In the Maryland General Assembly Would Preclude Limits On the Power of Condo Councils To Engage In Litigation and Enforce Warranties

House Bill 68 and Senate Bill 379, now pending in the Maryland General Assembly, would prohibit condominium developers from including language in the governing documents that would limit the power of a council of unit owners to bring suit.  Section 11-109(d)(4) of the Maryland Condominium Act presently gives a council of unit owners authority “[t]o sue and be sued, complain and defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium.”  The proposed legislation would confirm this authority “notwithstanding any provision in the declaration, bylaws, ,or other instrument made by a developer in accordance with this title.”  The pending bills would, however, permit the developer to include a requirement for mediation or arbitration of any claims brought by the council against the developer. Similarly with regard to the authority of a council of unit owners under Section 11-109(d)(19) to enforce the Section 11-131 implied warranties, the proposed legislation would preclude limits on this power, while permitting the governing documents to provide for mediation or arbitration of such warranty claims.

House and Senate Pass Bills To Prevent Condo Developers From Limiting Construction Defect Claims

Both houses of the Maryland General Assembly have passed legislation that would prevent condominium developers from including provisions in the project’s governing documents that limit the ability of unit owners to bring claims for construction defects.  Senate Bill 258 and House Bill 77 would protect 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.

There has been a trend among condominium developers to include language in the governing documents and sales contracts that changes the laws that are normally applicable as to when a claim accrues and when it must be brought.  The identical bills passed by the General Assembly would counter this trend by adding new Section 11-134.1 to the Maryland Condominium Act.  The House vote was 137-0, and the Senate vote was 43-2.

 

 

House of Delegates Passes Bill To Preclude Condo Developers From Limiting Owners Construction Defect Claims

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).

Maryland Construction Law Institute

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.”

Maryland General Assembly Again Considers Legislation To Protect Condo Owners’ Rights of Action Against Developers

Legislation has again been introduced in the Maryland General Assembly to prevent developers from including provisions in condominium governing documents that limit the developer’s liability for construction defects. Senate Bill 250, introduced by Senator Delores G. Kelley, 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. The proposed new law would also preclude limits on the rights of condominium councils or individual unit owners to bring claims relating to an alleged failure of the developer to comply with building codes, county approved plans and specifications, product manufacturer’s installation instructions, and other construction industry standards. Proposed new Section 11-134.1 of the Maryland Condominium Act would prohibit provisions designed to prevent the filing of a claim within the applicable period of limitations or prevent claims from accruing pursuant to the “discovery rule.” The new law would also preclude provisions requiring a vote of the unit owners approving the initiation of a claim, unless such a requirement is adopted after the unit owners assume control of the community from the developer. (more…)