Maryland Makes it Easier to Amend Condo Bylaws and HOA Covenants

Changes to the Maryland Condominium Act and Maryland Homeowners Association Act will soon make it easier to amend the governing documents of condominiums and homeowner associations.

The new law allows amendments to be made by a vote of members “in good standing” instead of all of the owners.  An owner is not in good standing if the payment of assessments or other charges is in arrears for more than 90 days.

Additionally, the votes required to approve amendments to condo bylaws and the declaration and bylaws of a homeowner association is reduced to 60 percent, or such lower amount allowed by the association governing documents, beginning October 1, 2017.

The Condo Act currently requires condo bylaw amendments to be approved by at least 66 and 2/3 of the total owner votes.  For homeowner associations, declaration covenants often require owner approval by a vote of 80 percent or more.

Because of these approval standards, many condos and HOAs have been unable to amend outdated provisions or add new provisions. The new lower threshold of 60 percent of the votes of owners in good standing will make it easier to get amendments passed.

Many association boards of directors are now reviewing the association documents for possible amendments concerning leasing, parking, attorneys’ fees, assessment collection costs, fines, maintenance responsibilities and amendment procedures.

For older associations with outdated governing documents,  it will now be easier to amend the documents to conform the association documents to the governance provisions of the Condo Act and HOA Act and other “best practices” for association governance.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland–including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Baltimore City and  Washington, D.C.

Maryland Appeals Court Slams Owner’s Door

A homeowner’s unauthorized installation of a new entry door was slammed by a Maryland appeals court.   The Maryland Court of Special Appeals ruled, in Spoon v. Deering Woods Condominium, that a Howard County condominium acted properly in requiring a unit owner to remove her six-panel entry door which did not match the flat entry doors of other condo units.

The court rejected the owner’s contention that the architectural covenant could not be enforced because other owners had a variety of storm-door styles and door knockers.  The variation in these features did not constitute an abandonment of the requirement for prior approval of changes in the appearance of the entry door.

Because the condominium consistently required all entry doors to have a matching flat style and had taken enforcement action against other owners who installed six-panel doors, the appeals court concluded that it was appropriate for the condominium board to require the owner to replace the unapproved door and install a flat door.  Additionally, the court ruled that board had properly imposed a fine of $5 for each day the owner had an unauthorized door, which totaled more than $5700 by the trial date.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland–including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Baltimore City and  Washington, D.C.

2017 Maryland Condo and HOA Legislation–The Final Score

During the 2017 Maryland legislative session, the General Assembly considered many bills regarding condominium and homeowner association governance, foreclosure procedures, state registration of community associations, and regulation of community association managers.

Legislation passed includes bills to make it easier to amend condo bylaws and an HOA declaration; require lender notice of foreclosure sale postponement and cancellation; and require community associations to provide owner notice of common property sales, including government tax sales.

Governing Document Amendments.  The vote required to amend bylaws of a condominium, and the declaration or bylaws of an HOA, was reduced to 60 percent of the members in good standing, or a lower percentage if allowed by the document amended.  Owners are in “good standing” if the association assessments or other charge are not more than 90 days past due.

Lender Foreclosure Sales.  When a lender postpones or cancels a foreclosure sale, notice will now have to be sent to a condominium or homeowners association which has recorded an assessment lien at least 30 days before the foreclosure sale date.   This additional notice is intended to help associations better monitor the status of foreclosures and assist in collecting delinquent assessments when a sale is delayed or canceled.

Notice of postponement or cancelation must also be provided to the property owner so the owner will know of the continuing obligation to pay association assessments.

Separately, legislation was passed to requite a lender to notify the Maryland Department of Labor, Licensing and Regulation of a pending foreclosure within seven days after a court foreclosure action is filed.  This is in addition to the post-sale notice which the foreclosure purchaser is required to provide to DLLR.

Sale of Common Area.   A new requirement for a condo or HOA to notify owners of sale of the association common property was enacted.  Notice can be provided by sending to each owner, or posting a sign on the property and including on any association website.

As introduced, the bill was intended to help associations by requiring better County notice of tax sales of association common area because the association may not know of a scheduled sale for non-payment of real property taxes or other government fees.  After amendment of the bill, no additional County notice is required.

HOA Resale Inspection Fee.  A bill to allow a fee of up to $100 for inspecting a home in connection with issuance of a resale certificate was amended before being passed to allow an inspection fee of up to $50 only if the fee is authorized by the HOA governing documents.

These new laws take effect on October 1.  Legislation considered but not passed in 2017 include bills to:

Require State registration of all condos, homeowner associations, and co-ops which are not already registered with a County;

Require State licensing of community association managers who would have to take specified training and pass a test showing proficiency in community association management; and

Require all condos and HOAs to obtain a replacement reserve study every five years.

Legislation to prohibit provisions in condominium governing documents which limit enforcement of developer construction warranties was passed by the House but died in the Senate committee.

Other bills killed by legislative committee would have invalidated association restrictions on electric vehicle charging stations and backyard gardens.  Legislation to allow condo and HOA rules to ban tobacco smoking in an owner’s condo or townhome was voted down in committee.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland–including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Baltimore City and  Washington, D.C.




2017 Maryland Condo and HOA Legislation–The Home Stretch

Two weeks until the 2017 Maryland legislative session ends on April 10.  Several bills affecting condominium and homeowner associations are still under consideration.

State Registration of Community Associations.  Passed by the House.  Reviewed by a Senate Committee and waiting further action.  Final passage possible but uncertain.

Manager Licensing.  Approval this year appears unlikely.  No action on the House bill, but summer study may be a possibility. Continue reading

Maryland Top Court to Review Condo Towing Rule

To tow or not to tow…with apologies to William Shakespeare, that is the question at the heart of long-running litigation between an Anne Arundel County condominium and owners whose vehicles were towed from the condo parking lot.  The Maryland Court of Appeals will soon resolve the dispute over a condominium association’s authority to suspend a condo owner’s use of the common elements when the owner is in arrears in payment of condominium assessments. Continue reading

FHA Condo Certification Rule Awaits Review by Trump Administration

The Federal Housing Administration (FHA) recently issued its long-awaited proposed rule regarding standards for condominiums in which individual unit owners are eligible to obtain FHA-insured loans.  However, final action awaits review by new housing agency officials in the Trump Administration.

Mortgages backed by the FHA allow borrowers to make a lower down payment and have less stringent financial qualification criteria than conventional  mortgages. Of the estimated 150,000 condominium nationwide, fewer than 10,000 are certified for FHA-insured loans. Continue reading