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. Continue reading

Will Community Associations Get Trumped?

The election of Donald Trump as the President of the United States ushers in uncertainty for a variety of federal housing policies which affect the financing and governance of homes in community associations–condominiums, homeowner associations and housing cooperatives.  During the election campaign, Trump said little about the federal role in promoting homeownership.

But, his support for reduced government regulation and the 2016 Republican Platform provide clues about how a Trump Administration may impact community associations. Continue reading

New Fair Housing Harassment Rules Apply to Community Associations

Condominiums, housing co-ops and homeowner associations may be liable for the conduct of community residents which subjects other residents to “hostile environment harassment” under new rules issued by the United States Department of Housing and Urban Development (HUD).

The new fair housing rules, which apply beginning October 14, 2016, establish nationwide standards which HUD will apply in enforcing the federal Fair Housing Act with respect to alleged harassment based on race, color, religion, national origin, sex, familial status or disability. According to HUD, the rules do not create any new forms of liability under the Fair Housing Act but merely clarify HUD’s enforcement policies on “quid pro quo” and “hostile environment” harassment.  In addition, the rules clarify when a person may have vicarious liability for the actions of agents and employees in the context of discriminatory housing practices.

The new HUD rules define “hostile environment harassment” to mean “unwelcome conduct that is sufficiently severe or pervasive as to interfere with the availability, sale, rental, or use or enjoyment of a dwelling” and other housing-related activity.  Whether hostile environment harassment exists will be evaluated from the totality of the circumstances and from the perspective of a reasonable person in the aggrieved person’s position.

“Quid pro quo” harassment refers to circumstances where submission to an “unwelcome request or demand” is a condition related to housing transactions or services.

In addition to liability for a person’s own conduct and the conduct of that person’s agents and employees, the new fair housing rules also make a person liable for failing to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct and had the power to correct it.

The HUD explanatory statement accompanying the rules specifically addresses the obligations of condominiums, homeowner associations and housing co-ops to act to correct a discriminatory housing practice by taking “whatever actions it legally can take to end the harassing conduct”.  And, HUD refers to the 2015 decision of the United States Supreme Court in Texas Department of Community v. Inclusive  Communities Project, Inc. in support of its position that a person’s failure to act to correct third-party harassment does not need to be motivated by a discriminatory intent in order to be liable for a Fair Housing Act violation.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowners associations and housing co-operatives in Maryland–including Montgomery County, Prince George’s County, Howard County, and Frederick County; and in the District of Columbia.

Maryland Condo and HOA Resale Disclosure Law Revised

New resale disclosure requirements for Maryland condominiums and homeowner associations apply beginning October 1, 2016.  Condos will now be required to provide prospective purchasers with the current reserve study report or a summary of the report, and a statement of the status and amount of any reserve or replacement fund.  There are also changes regarding disclosure of unsatisfied judgments against the condominium and pending lawsuits to which the condominium is a party.

Condo Resales. The condo resale disclosure information will no longer require a statement as to whether the association has knowledge of an alteration or improvement to the unit or limited common elements assigned to the unit are in violation of the bylaws or rules. And, the required statement about common element health or building code violations will be limited to actual knowledge of such violations.

The fees which a condominium may charge for providing the resale disclosure certificate and condo documents is capped at $250 plus additional fees up to $100 to inspect the unit and rush fees up to $100.

HOA Resales.  Additionally, Maryland homeowner associations for the first time will be required to provide information and documents to owners when they sell their property.  This includes information about the total amount of assessments and fees charged by the association; whether any of the assessments or fees are delinquent; the contact information for the associations of its management agent; unsatisfied court judgements; and pending claims, covenant violation actions or notices of default against to property.

A homeowners association may charge up to $250 for the resale disclosure information and HOA documents plus rush fees of up to $100.

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; and Frederick County; and in Washington, D.C.

 

Congress Directs FHA to Ease Condominium Approval Standards

It took an Act of Congress!

But, more condominiums are soon expected to be approved by the Federal Housing Administration (FHA).  Only condominium owners in FHA-approved condo associations are eligible for loans insured by the FHA.  These loans offer borrowers lower down payments and more lenient credit criteria.

Under the Home Opportunity Through Modernization Act, passed unanimously by Congress and signed into law in late July, 2016,  the number of owner-occupied units allowed will be lowered from 50 percent to 35 percent of units unless the FHA promptly adopts guidance to support a higher number of owner-occupied units in a condominium.

The new law also prohibits FHA from denying approval to a condominium  because the condo imposes transfer fees to fund condominium operations.  Instead, the FHA policy on private transfer fee covenants must conform to the less restrictive standards of the Federal Housing Finance Agency (FHFA) for the purchase of loans by Fannie Mae and Freddie Mac. And, the FHA is encouraged to approve more mixed-use condos with both residential and commercial units.

For condos seeking renewal of its FHA-approved status, the FHA is now required to make condo recertification “substantially less burdensome”.

New FHA rules and guidelines are expected in the coming months in order to implement the congressional directive to make it easier for condominium associations to obtain and keep FHA-approval, making FHA-insured loans available to more condo unit owners and purchasers.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations, and housing coops in the Maryland Counties of Montgomery County, Prince George’s County, Howard County, Frederick County, and in Washington, D.C.

Montgomery County CCOC To Require Negotiation of Association Disputes

After a year-long examination of the operations of the Montgomery County Commission on Common Ownership Communities (CCOC), the County Council has enacted a new law which makes changes in the CCOC dispute resolution process.   More than 340,000 Montgomery County, Maryland residents live in over 1,000 condominiums, homeowners associations, and housing cooperatives.  The CCOC was created in 1991 to provide a forum for certain disputes between association residents and the board which govern the association to be resolved without going to court, and to provide educational resources for associaiton residents and leaders

Where the CCOC staff determines that there are reasonable grounds to conclude that a violation of law or association documents has occurred, the new law requires the staff to attempt to resolve disputes filed with the CCOC through informal negotiation and possibly mediation.

If the party who filed the CCOC dispute does not attend the mediation, the dispute must be dismissed.  If the party who is alleged to violation applicable law or the association documents does not attend the mediation, the matter must be set for a hearing and that party is prohibited from appearing at the hearing to present testimony and evidence. Previously, there was no requirement for active staff negotiation, and mediation was voluntary.

The new law also requires all members of the CCOC  to take the same CCOC training on community association governance which association board members are required to take, and any other training provided or approved by the County Attorney.   Additionally, volunteer arbitrators who chair CCOC hearing panels will be prohibited from representing any parties in disputes before other hearing panels.

Separately, the annual community association registration fee was increased from $3 to $5 per dwelling unit beginning July 1 to allow the CCOC to provide more staff and and educational resources. The CCOC is now part of the Montgomery County Department of Housing and Community Affairs.

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