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 total votes, or a lower percentage if allowed by the document amended. Only members “in good standing” may vote. 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.