A Maryland condominium Rule which barred delinquent condo owners from using the common property parking lot and swimming pool has been struck down by the Maryland Court of Appeals–the highest state appellate court.
In Elvaton Towne Condominium Regime II v. Rose, the appeals court decided that a condominium board of directors can not rely on general rulemaking authority to adopt a Rule which interfered with the owner’s statutory property right to use the common elements. However, the court ruled that the Maryland Condominium Act permits a condominium Declaration to provide that an owner’s parking and pool privileges may be suspended where the owner is in arrears in payment of condo assessments.
Although recognizing a condo board may adopt reasonable Rules regarding the use of the common elements, the court noted that such Rules must be consistent with the condominium Declaration and Bylaws and with the Maryland Condominium Act.
Because the condominium Declaration did not allow for suspension of the right to use the common element parking lot and swimming pool a consequence of non-payment of condo fees, the court concluded that the board-adopted Rule was invalid no matter how reasonable it might be to prevent owners who have not paid their assessment from parking on the community property or using the community pool.
Distinguishing between permitted Rules necessary to “administer the condominium on day-to-day issues” and prohibited Rules which take away an owner’s property interest in the common elements even temporarily, the court concluded that the board did not have the authority to adopt a Rule to bar use of the parking lot and pool for non-payment of assessments.
The court rejected the condominium’s contention that the board had the authority to adopt the suspension-of-privileges Rule because the Declaration stated that all owners are subject to the Bylaws and Rules and that the Bylaws require owners to pay assessments and authorize the board to adopt Rules regulating the use of the common elements. According to the appeals court, the board’s authority to suspend an owner’s access to the common property must be stated clearly and unambiguously in the Declaration.
Although the court suggested that it might be reasonable to suspend use of common areas when an owner in delinquent in payment of assessments, it was bound by the Condominium Act in disallowing such action based on a board-adopted rule or the collection provisions of the condo bylaws.
If a condo declaration does not include the authority for a board to suspend use of the common area for non-payment of assessments, the declaration could be amended to grant such power. However, that will be difficult to do since the amendment will need approval of at least 80 percent of all owners and possibly lender approval as well.
In response the court ruling in Elvaton, the Maryland legislature could amend the Maryland Condominium Act to provide condo boards with greater authority to suspend use of common areas when an owner has not paid the condo assessments.
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.