The Maryland House of Delegates has passed an amended version of a bill previously approved in the State Senate that would require a condominium council of unit owners to provide at least 30-days notice to all unit owners of any sale, including a tax sale, of a common element.  The bill would add new Subsection 11-108(d) to the Maryland Condominium Act.  Additionally it would add new Subsection 14-804(e) to the Tax Article to provide that a council of unit owners must give notice to the unit owners when a tax lien has been imposed on a common element.

The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act.

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.

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 47-0, the Maryland State Senate passed Senate Bill 809, which would require a condominium council of unit owners to provide at least 30-days notice to all unit owners of any sale, including a tax sale, of a common element.  The bill would add new Subsection 11-108(d) to the Maryland Condominium Act.  Additionally it would add new Subsection 14-804(e) to the Tax Article to provide that a council of unit owners must give notice to the unit owners when a tax lien has been imposed on a common element.  The final version that passed added language imposing the same notice requirement a developer where the developer maintains control prior to formation of the council of unit owners.

The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act. Proposed new Subsection 14-804(e) of the Tax Article would also require notice by a homeowner association when a tax lien is imposed on any common area.  The final version included an amendment imposing the notice requirement on a declarant where the governing body of the association has not yet formed.

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 135-1, 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.

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.

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.

House Bill 34 in the Maryland General Assembly would give homeowner associations the right to collect a fee relating to inspections during the resale process.  The proposed law would entitle an HOA to charge “a reasonable fee not to exceed $100 for an inspection of the low owner’s lot if required.”  Under Section 11B-106 of the Maryland Homeowner Association Act, sellers are required to provide certain information to prospective purchasers, much of which is often provided by the Association.  Under the statute, the Association can charge “a reasonable fee” for providing this information, that does not exceed its actual cost, up to a maximum of $250.  House Bill 34 would add an additional fee charge for costs relating to an inspection of the property as part of the resale process.  The Bill passed the House of Delegates by a 85 – 44 vote, and is now pending in the Senate.