“Single Family Residences” Restriction Does Not Bar Unrelated Occupants

by Tom Schild

A restrictive covenant which limits use of lots to “single family residences”–but does not define the term “family”–is ambiguous.  Therefore, it is not enforceable to prevent renting a house to persons not related by blood, marriage or adoption, according a recent decision of the Maryland Court of Special Appeals in South Kaywood Community Association v. Long.

A Wicomico County homeowners association contended that the restriction requiring use and occupancy as a “single family” residence prevented lease of a house to 3 unrelated student who attend Salisbury University.

The appeals court noted that Maryland courts apply a “reasonably strict construction” when interpreting covenants so that if there is ambiguity in meaning, any doubt should favor the unrestricted use of the property.  In discerning the intent of the drafter in using the term “single family”, the court looked for but found no guidance in other provisions of the South Kaywood covenants.  Observing that no Maryland appellate court has considered the meaning of a “single family” covenant, it also considered court decisions from other states decided near the time the 1961 South Kaywood restriction was drafted by found no clear covenant.

In concluding that the term “single family” is ambiguous, the Court noted that the term as used in zoning ordinances is often defined to include a specified number of unrelated persons living as a single housekeeping unit.  It also noted that the great majority of courts in other states which have construed the term in zoning ordinances or restrictive covenants since the South Kaywood restriction was imposed have concluded that the term is ambiguous and does not necessarily restrict use of property to persons related by blood, marriage or adoption.

Therefore,  the “single family” covenant restriction did not prevent occupancy by 3 unrelated college students.

 

More on Pit Bulls—Maryland Appeals Court Affirms Strict Liability

by Tom Schild

The Maryland Court of Appeals on August 21 affirmed its April 26 ruling that owners of pit bulls and property owners who have the right to control the presence of pit bulls are strictly liable for injuries caused by such dogs,  However, the court did modify its earlier decision so it does not apply to mixed breed pit bulls.

In its April 26 decision in Tracey v. Solesky, the court ruled that property owners who know, or have reason to know, of the presence of a pit bull on their property are liable for injuries caused by such dogs, whether or not they know a particular dog has a history of vicious propensities.  The court concluded that pit bulls are inherently dangerous animals.

According to the appeals court August 21 decision, the strict liability standard for injuries caused by pit bulls “simply requires that those who possess them or permit them on their property take reasonable steps to assure that they do not run loose or otherwise are in a position to injure people”.

The appeals court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one  breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

In response to the appeals court decision, the Maryland General Assembly considered several bills regarding liability for injuries caused by dogs during its recent Special Session.  Although the House and Senate passed similar versions of legislation, the differences in the two versions were not resolved before the General Assembly adjourned until January 2013 without enacting any dog bite legislation.

With the appeals court standing by its April 26 ruling to impose strict liability on pit bull owners and property owners, legislation regarding dog bite liability is expected to be considered again during the regular 2013 legislative session.

Faced with greater potential liability for pit bull bites, some landlords reportedly are terminating leases of tenants who have pit bulls and some dog owners are surrendering their pit bulls to animal shelters.  And, some condominium, homeowner association and coop boards are considering a ban on pit bulls.

Pit Bull Legislation Stalls

by Tom Schild

After considering several bills regarding liability for injuries caused by dogs, the Maryland General Assembly has adjourned until January 2012 without enacting any dog bite legislation.

During the recent Special Session, the Senate and House passed different versions of legislation which would impose dog bite liability on landlords and others who have the right to control the presence of dogs on their property only where there is knowledge of a particular dog’s presence and vicious propensity.  This would have restored the negligence standard of liability modified by a recent appeals cout decision with respect to injuries caused by pit bulls and mixed breed pit bulls.

For dog owners, the proposed dog bite legislation would have extended the strict liability standard to injuries caused by all breeds of dogs, with a few exceptions for specific circumstances.

After passing casino legislation, the General Assembly adjourned on August 15 without taking final action on the dog bite bills.

Appeals Court Ruling–Strict Liability for Pit Bulls

The proposed dog bite legislation was in response to the April 26 ruling of the Maryland Court of Appeals–the highest state appellate court–that both the owner of a pit bull dog (or pit bull mixed breed) and a landlord or other person with the right to control the presence of such dogs would be strictly liable for all injuries caused by such dogs whether or not there was any knowledge that a particular dog had a history of being vicious. Concluding that pit bulls are inherently dangerous animals, the court decision in Tracey v. Solesky changed the long-established common law (i.e. court-made law) liability standard for pit bull owners and property owners.

The  appeals court stated that the new strict liability standard applies to any new claims arising after the date of its decision.  Faced with greater potential liability for pit bull bites, some landlords reportedly began terminating leases of tenants who had pit bulls and some pit bull owners surrendered their dogs to animal shelters.  Condominium, homeowner association and coop boards began consideration of a ban on pit bulls and pit bull mixed breeds.

On May 25, the Court of Appeals was asked to reconsider its decision.  This created  uncertainty whether the ruling would remain effective as of April 26 if it was not modified on reconsideration.  In response to a legislator’s inquiry as to the status of the court ruling, a Maryland Assistant Attorney General issued an opinion letter on July 10 advising that, in her opinion, the new liability standard announced by the Court of Appeals was not yet in effect because the court ruling was not a final decision, so long as the request for reconsideration was pending.  But, that letter also indicated it was uncertain if the court would agree with her opinion and urged private parties to consult their own legal counsel for advice.

The court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

Legislation Proposed to Overturn Court Ruling

In response to criticism of the appeals court ruling by animal rights advocates, landlords, the Community Associations Institute, and insurance companies, the Maryland General Assembly acted quickly during its August special session to consider legislation to overturn the court ruling while the request for court reconsideration was still pending.

On behalf of the Community Associations Institute, I attended the House Judiciary Committee hearing to explain the special problems of condos, HOAs and coops in banning, identifying and removing pit bulls and mixed pit bull breeds.  Unlike landlords which can readily ban pit bulls and evict tenants who violate pet restrictions, it is far more difficult, time-consuming and costly for a community association to ban certain breeds of dogs and have prohibited dogs removed from the community.  The final House version of the legislation included an amendment to make clear that condominiums, homeowner associations, and housing cooperatives are not subject to the strict liability standard.

With the support of animal rights groups, the Senate and House passed bills to generally extend the strict liability standard to owners and keepers of all dogs, with a few exceptions for veterinarians, police and military personnel, and other specified circumstances.

With the support of organizations representing landlords, community associations, insurance companies and animal rights advocates, both the Senate and House-passed versions overturn the strict liability standard for property owners and restores the common law liability standard for property owners which was in effect prior to the court ruling in Tracey v. Solesky Under the negligence standard, a landlord, condominium, homeowners association, housing cooperative or other person with control over the presence of a dog can still be liable for injuries caused by a dog where there is knowledge of the dog on the property and knowledge of its vicious propensities.

No Dog Bite Legislation Enacted

Although similar (but different) versions of dog bite legislation was introduced, considered,  and passed by the Maryland Senate and House in less than a week during the special legislative session, the differences were not resolved and no new law was approved by the General Assembly.  The entire topic of dog bite liability is expected to be revisited again during the regular January 2013 legislative session….when the legislative dogfight will continue.

 

Pit Bull Liability…Revisited

by Tom Schild

The Maryland Court of Appeals has been asked to reconsider its April ruling that owners of pit bulls and landlords are strictly liable for injuries caused by this breed of dog.  As a result, there is uncertainty whether the Court’s decision is final and binding. 

In response to the court ruling, a joint House-Senate legislative task force was appointed to develop possible Maryland legislation to address issues raised by the court opinion.  Some have proposed extending the strict liability standard to all breeds of dogs to address uncertainty whether a particular dog is a pit bull or mixed breed pit bull.  Others have suggested eliminating the strict liability standard for landlords and community associations. 

Because the Court of Appeals could revise its decision, no legislative action is expected until the court ruling  becomes final.

Maryland County Links Rental License to Condo and HOA Fees

by Tom Schild

A Maryland county in the Baltimore-Washington DC region has enacted a new law which conditions issuance of a rental license for a property in a condominium or homeowners association on being current on payment of the condo/HOA assessments.  The Howard County law requires property owners to certify they are no more than 30 days behind in payment of the association assessments when applying for a rental license.

Additionally, a rental license may be suspended or revoked if the condo or HOA notifies the County of a final adjudication that the owner is more than 30 days past due in payment of assessments.

The new law is intended to aid condos and HOAs by ensuring that property owners are paying their condo and HOA fees when receiving rental income and benefiting from the services and facilities provided by condos and HOAs, The legislation was passed by the Howard County Council in early May 2012 and goes into effect in mid-July.

Condo Resale Disclosures May Violate Maryland Consumer Protection Act

by Tom Schild

It has been a rough month for Maryland condos.  First, the Maryland Court of Appeals expanded the potential liability for the presence of pit bulls on condo common areas (See May 11 blog post–Beware of Pit Bull).    A few days later, the same court ruled that condos and their management companies may violate the Maryland Consumer Protection Act by issuing a “misleading” resale document in connection with the sale of a condo unit.

The Maryland Court of Appeals–the highest state appellate court–issued its initial opinion in MRA Property Management, Inc. v. Armstrong in October 2011 but withdrew that ruling in December 2011 in response to objections by the unit owners, condominium and management company who were the parties to the litigaiton.  The court issued its new and revised ruling on April 30, 2012.

Unit owners who received the condominium operating budget as part of the resale disclosure package claimed the approved budget was misleading because there was no indication that additional repairs would be required and a special assessment to fund the repairs would be imposed on unit owners  The condominium and management company contended that they had complied with the resale disclosure requirements of the Maryland Condominium Act by providing the operating budget and that the Maryland Consumer Protection Act does not apply to the issuance of condo resale disclosure information.

The appeals court concluded that the Consumer Protection Act does apply to the issuance of resale disclosure certificates and other information even though neither the condominium nor management company is the seller of the condo unit.  The court reasoned that the statutory duty under the Condo Act to provide materials  to prospective buyers injects the condominium and management company into the sales transaction as “central participants” because the sales contract would be unenforceable if they failed to provide the resale disclosure information.  According to the court, the required disclosures “may have been integral to the transactions”.

Therefore, the Consumer Protection Act establishes an independent basis of potential liability by the condo and its manager if the disclosures are “misleading or had the capacity, tendency, or effect of misleading or deceiving”.  The Maryland Condominium Act requires disclosures, while the Consumer Protection Act  mandates that those disclosures not be deceptive.

The appeals court did not rule on whether the operating budgets provided by the condominium and its management company were deceptive in violation of the Consumer Protection Act.  Instead, the court found that they were not necessarily deceptive and sent the matter back to the trial court to determine if they were deceptive or not.  The Court of Appeals left open the possibility that the mere disclosure of the operating budget might be deceptive if additional known information was not also disclosed to prevent the budgets from being misleading.

Additionally, the appellate court did not address whether the condominium has an obligation under the Condominium Act to disclose building conditions that may have been code violations but were never charged as such by a  government agency.  Although the court had addressed that issue in its earlier withdrawn decision, the court’s revised decision concluded that issue was not properly before the court.

 

Beware of Pit Bull—Maryland Landlords, Condos and HOAs Face New Liability

by Tom Schild

The Maryland Court of Appeals — the highest state court — has changed the long-standing legal standard for landlord liability to victims of attacks by pit bulls and cross-bred pit bulls which occur on leased property. 

In a landmark ruling in Tracey v. Solesky, the appeals court changed the “common law” of prior court decisions that a landlord is liable for the actions of a pit bull kept by a tenant only if the landlord had knowledge of “past vicious behavior” of that particular dog.

The new legal standard adopted by the 4-3 court decision on April 26 is that the dog owner and others who have “the right to control the pit bull’s presence” and knows, or has reason to know, that the dog is a pit bull or cross-bred pit bull mix will be liable for injuries caused by the dog.

Concluding that pit bulls or cross-bred pit bulls are “inherently dangerous”, the appeals court specifically ruled that the new strict liability standard applied to a “landlord who has the right and/or opportunity to prohibit such dogs on leased premises.”  This could expose landlords and their management companies to liability for attacks by such dogs merely by allowing these breeds to be kept on the leased property.

For other dog breeds, the “common law” is unchanged and it will still be necessary to show knowledge of the prior vicious behavior of a particular dog in order to establish liability for a dog attack.

In a vigorous dissenting opinion, 3 of 7 appeals court judges opposed the new strict liability standard, noting that it applies to any dog “with a trace of pit bull ancestry” without any guidance how that is to be determined.

Although the court ruling involved a rental property, it applies broadly to others who have the “right to control” the presence of pit bulls — which includes condominiums and homeowner associations.  To avoid liability for attacks by pit bulls and pit bull mixed breed dogs, landlords, condos and HOAs now may decide to prohibit such breeds.

 

 

 

 

 

 

Maryland Foreclosure Laws Revised…..Again

by Tom Schild

Maryland foreclosure laws have been revised again for the fifth consecutive year.  Previously, changes were made to provide homeowners with more time, additional notices, and an opportunity for mediation before a foreclosure sale can occur.

For condominiums and homeowner associations, newly enacted mediation procedures could further delay lender foreclosure sales.  But, new post-sale notice requirements could help associations track foreclosure sales and collect post-sale assessments.

Maryland Governor Martin O’Malley last year appointed a Maryland Foreclosure Task Force to examine recent foreclosure trends in Maryland and to make recommendations regarding state government policies to aid homeowners and neighborhoods impacted by home foreclosures

Foreclosure Mediation  

Adopting a  recommendation of the January 2012 Task Force report, the Maryland General Assembly amended the foreclosure laws to allow a lender and homeowner to participate in “pre-file mediation” with a government mediator before a foreclosure court suit is filed.  To participate in such mediation, the owner must receive housing counseling services from a non-profit organization or government agency.  Where there is “pre-file mediation”, the homeowner will not be entitled to additional mediation after a foreclosure suit is filed (HB 1374).

Foreclosed Property Registry

Separately, a bill to establish a Foreclosed Property Registry was enacted.  A foreclosure purchaser will be required to notify the Maryland Department of Labor, Licensing, and Regulation (DLLR) after a sale has occurred and after a deed is recorded.  This will allow government agencies to better locate the foreclosure purchaser after the sale until the property is formally transferred by recording a new deed in the land records.

The purchaser information filed with the Foreclosed Property Registry will be available only to DLLR and local government officials.  Those agencies may provide the information to a person who lives on the same block as the foreclosed property is located and to a homeowners association or condominium where the property is located (HB 1373).

Post-sale Notice

Additionally, the purchaser of residential property at a foreclosure sale will now be required to provide a copy of the court ratification order to the tax office for the County where the foreclosed property is located.  This is intended to enable state and local governments to collect the correct property tax due for property which is no longer owner-occupied from the date of foreclosure sale regardless of when the deed in recorded (SB 123).

2012 Maryland Legislative Session Ends With Limited Action on Condo and HOA Legislation

by Tom Schild

The Maryland General Assembly ended its 2012 session on April 9 without enacting  proposed legislation on community association manager licensing, developer to homeowner transition or HOA rules adoption and enforcement.  After considering dozens of bills regarding governance of condominium and homeowner associations, only a few bills passed.

New Laws Enacted

The Maryland Condominium Act was amended to authorize condo associations to gain access to units to investigate damage where necessary for public safety or to prevent damage to other portions of the condominium (HB 126).  Also enacted was a bill to require collection and removal of recyclable material by  condominiums and apartment buildings with 10 or more units beginning in October 2014 (HB 1). 

Legislation was approved  to permit Prince George’s County to enact an ordinance to impose and collect a fee for providing administrative hearing services for the resolution of disputes involving common interest communities (HB 906).

Other Legislation Considered

 Both the Senate and House of Delegates passed a bill to prohibit condominium developers from shortening the statute of limitations on condo unit warranties in sales contracts. It would also bar developers from including provisions in condo bylaws to require unit owner approval for a condo board to pursue legal claims by litigation or arbitration.  However, there were differences in the two versions passed and the bill died on the last day of the legislative session (HB 740/SB 725).

Legislation to regulate community association managers has been proposed for the past 4 years.  The bill considered this year would have established a State Board of Common Interest Community Managers to license and regulate managers.   Each manager would be required to obtain a state-issued license to act on behalf of a Maryland condo, HOA or co-op in its business, financial, legal or other transactions such as negotiating contracts, collecting and disbursing association funds, preparing budgets and financial reports, and enforcing association governing documents. The proposed Maryland Common Interest Community Managers Act was defeated by a Senate Committee but may be introduced again in 2013 (HB 433/SB 372).

Bills to require management contracts to include certain provisions and to require community association management companies to obtain fidelity insurance also died in committee.   Legislation regarding assessment collection and resale disclosures was also considered but not enacted.

 

 

 

Developer Warranty Legislation Considered in Maryland

by Tom Schild

Maryland legislative committees are reviewing proposed legislation to ban condominium developers from limiting condo warranties in sales contracts and condominium bylaws.

In response to the broad warranty rights granted by Maryland law, developers have restricted these rights by provisions in sales contracts which shorten the time for filing court claims against developer.  Parties to a contract can agree to shorten the time to bring legal claims unless prohibited by statute from doing so.

A proposed bill (House Bill 740/Senate Bill 725) would prohibit provisions in sales contracts or other documents which shorten the statute of limitations applicable to warranty claims or other statutory or common law claims in connection with the sale of condominiums. 

The bill would also prohibit developer-imposed provisions in a condominium declaration or bylaw, or other documents which require unit owner approval for a condominium to pursue legal claims by litigation, arbitration, or other means.  Developers have utilized such restrictive approval provisions in recent years to deter warranty claims and other legal action against developers in connection with the development and construction of residential condominiums.

Maryland Manager Licensing Legislation Considered

by Tom Schild

Manager licensing legislation is under review by Maryland Senate and House committees.  The proposed Maryland Common Interest Community Managers Act (House Bill 433/Senate Bill 372) would require individuals who provide management services to Maryland condominiums, homeowner associations, and housing co-ops to obtain a license issued by a State Board of Common Interest Community Managers.

Applicants for a common interest community manager’s license would be required to complete a state-approved training program and pass an exam.   Those actively engaged in providing management services for at least 12 months prior to applying for a manager’s license and having specified professional manager designations would also be eligible for a manager’s license.

Beginning October 1, 2013, a license would be required for a manager to act on behalf of a Maryland association in its business, financial, legal or other transactions such as negotiating contracts, collecting and disbursing association funds, preparing budgets and financial reports, and enforcing association governing documents.

Among those exempt from the manager licensing requirements are management support staff who are supervised by a licensed common interest community manager, association board members and residents who act without compensation, attorneys engaged in the practice of law, certified public accountants providing bookkeeping or accounting services, and real estate brokers or sales persons when managing individual properties.

The State Board of Common Interest Community Managers would be authorized to establish license fees to produce sufficient funds to operate the licensing board.  Separately, most condos, HOAs and co-ops would be required to register with the state board and pay of a fee of $2 per unit up to $500 per association.

Public hearings on the proposed Maryland Common Interest Community Managers Act are scheduled for February 15 and 16.

Maryland General Assembly Considers Condo and HOA Bills

by Tom Schild

Same-sex marriage, budget deficits and tax hikes top the high-profile issues for the 2012 Maryland legislative session now underway in Annapolis.  For condominiums and homeowner associations, the focus will be on rules adoption and enforcement procedures, developer to homeowner transition, and manager licensing.

Legislation has been introduced to require all Maryland condominiums and homeowner associations to follow a specific rules enforcement procedure before imposing fines, suspending voting rights or infringing on owner rights for violation of association rules (HB 76/SB 184).

Also proposed is a bill to extend to homeowner associations the rules adoption procedure which already applies to condominiums.  This legislation would require notice to all homeowners and allow an opportunity to comment on a proposed rule before it can be adopted by the board of directors (HB 155).

Other proposed legislation would aid homeowners in the transition from developer to homeowner control of condos and HOAs by requiring the developer to appoint an independent owner to the board of directors when homes representing 25 percent of the votes in the community have been conveyed.  It would also require a developer to maintain independent books, records and accounts from the time the association is established.   Additionally, a developer would be required to notify members of a homeowner-controlled board of any government bonds related to the association and provide additional notice prior to requesting release from such bonds (HB 79/SB 202).

Future posts on the Maryland Condominium & HOA Law Blog will provide updates on these bills and other proposed legislation during the 2012 Maryland legislative session which runs until mid-April.

CAI Chesapeake Chapter to Host Community Governance Program

The Chesapeake Region Chapter of the Community Associations Institute (CAI) will host the CAI Community Governance course in Pikesville, Maryland  on February 9 and 10, 2012.  The two-day course is part of CAI’s Professional Management Development Program for community association managers.

Topics include the legal responsibilities of condo and HOA boards and managers; the relationship between association governing documents and state, local and federal statutes; and the contractual and corporate basis for the manager’s role in community decision-making. The course also covers rules development and enforcement and potential conflicts of interest which managers and association boards may encounter.

The instructor for the Baltimore-area program will be Maryland attorney Tom Schild who is a member of CAI’s National Faculty and the College of Community Association Lawyers.  Tom has taught the Community Governance course in cities throughout the United States, including Seattle, Phoenix, Las Vegas, Chicago, Washington, Cincinnati, Nashville, Sarasota and Charleston.

For more information on the Community Governance course and the Professional Management Development Program, go to the Community Associations Institute website, caionline.org.

CAI is a national organization dedicated to fostering competent, well-governed community associations that are home to approximately 20 percent of all American households.  For nearly 40 years, CAI has provided education and resources to volunteer homeowners who govern community associations and the professionals who support them.  CAI’s 30,000 members include community association volunteer leaders, professional managers, community management firms, attorneys, and other professionals and companies that provide products and services to community associations.

Maryland Legislature to Consider New Condo and HOA Laws

by Tom Schild

The Maryland General Assembly convenes its 2012 state legislative session on January 11, 2012.

Hot topics regarding Maryland condominiums and homeowner associations are expected to be community association manager licensing, homeowner association dispute resolution procedures, developer to homeowner transition, and mandatory recycling for condos with 10 or more units.

After bills are introduced, the proposed legislation is assigned to a legislative committee for consideration and a public hearing.  Most condo and HOA bills go to the Environmental Matters Committee in the House of Delegate and the Judicial Proceedings Committee in the Senate.  If a bill is voted favorably by the Committee, it then goes to the full House or Senate for action.

Future blogposts on the Maryland Condominium & HOA Law Blog will cover proposed legislation of interest to Maryland condos, HOAs and co-ops as bills are introduced and acted on during the 2012 session of the Maryland General Assembly.

To receive blogposts by email, subscribe for free to the Maryland Condominium & HOA Law Blog.

Fair Housing Accommodation Required Only On Resident Request

by Tom Schild

Nearly 9 years after a fair housing complaint was filed in April 2003, the Maryland Court of Special Appeals ruled in December 2011 that a Baltimore management company did not violate the Maryland fair housing laws.

In Wallace H. Campbell & Company, Inc. v. Maryland Human Relations Commission, the resident of an apartment complex contended that the management company discriminated against him based on his disability by requiring that mediation of a dispute be held at a location which was not wheelchair accessible.  At the 2003 mediation, the management company staff physically assisted the resident and carried his wheelchair up and down several steps.  The resident did not complain about the assistance, request that the mediation be held at a wheelchair-accessible location or request any other accommodation to his disability.

Nevertheless, the resident later filed a complaint with the Maryland Human Relations Commission (“Commission”) alleging that the management company refused to provide a reasonable accommodation to the resident’s disability.  After more than 4 years of investigation and hearings, the Commission determined there had been a violation of the Maryland fair housing laws, awarded $7,500 in damages, and imposed a $5,000 civil penalty.  The Commission decision was upheld by the trial court.

On appeal, the Maryland Court of Special Appeals reversed the decision of the Commission because the resident had not requested any accommodation to his disability and, therefore, the management company did not “refuse” to make an accommodation in violation of the Maryland fair housing laws.

Maryland Foreclosure Purchaser Must Pay Condo Fees

by Tom Schild

The successful bidder at a foreclosure sale of a condominium unit is not exempt from paying condo fee assessments until legal title is conveyed after a court ratifies the sale, the Maryland Court of Special Appeals ruled on December 1, 2011.

In Campbell v. Bayside Condominium, a Maryland foreclosure sale purchaser challenged the authority of the Condominium to impose a lien for assessments during the interval between the foreclosure sale date and conveyance to the purchaser several months later.  She contended that the Maryland Condominium Act definition of “unit owner” should be applied to mean only those with “legal title” are obligated to pay the condo fees.

Under long-established Maryland law, the purchaser at a foreclosure sale acquires “equitable title” as of the sale date.  After court ratification of the sale and upon conveyance by deed, the purchaser acquires “legal title” retroactive to the foreclosure sale date.  Applying this principle in the context of the purchase of a condominium unit at a foreclosure sale, the Court of Special Appeals concluded that the term “unit owner” in the Condominium Act embraces the holder of equitable title.  Therefore, a foreclosure sale purchaser is liable for payment of assessments from the date of the foreclosure sale.

Maryland Appeals Court Expands Condo Resale Certificate Liability

by Tom Schild

A recent decision of the Maryland Court of Appeals–the highest state appellate court–significantly increases the potential liablity of condominium associations and their managers when issuing resale certficates required by the Maryland Condominium Act. Continue reading