2018 Maryland Legislative Hot Topics for Condos and HOAs

2018 marks the last Maryland legislative session before statewide elections in November.  With the entire General Assembly and Governor up for election, the legislature is expected to focus on many bills previously considered but not enacted.

For community associations, the hot topics include limiting community association manager licensingprohibiting developer restrictions on condo construction defect claims;  and requiring developers to provide additional information regarding construction bonds and association finances.

Legislation to require periodic reserve studies to estimate the cost of replacing and repairing common property may also get another look.  And, a proposal to limit association authority to regulate electric vehicle charging stations is also likely to be introduced again. Continue reading

Maryland Appeals Court Rejects Condo Owner Defamation Claim

A Maryland appeals court has ruled that emails sent to owners in a Baltimore condominium association by the condo President regarding a recent burglary were not defamatory with regard to the owner whose condominium unit was broken into.

An email was sent to another owner who reported the burglary and copied to several board members in part stating: “What do you think I should do in response to your email? Should I ask to be appointed police commissioner so I can station cops in our community 24/7? Should I tell our neighbors not to associate with criminals who might want to cause harm to them”?

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Short Term Rentals Coming Soon to Montgomery County, Maryland

Short term rentals will soon be allowed in all residential areas of Montgomery County, Maryland.  A home rented on a daily or weekly basis is often referred to as an AirBnb–which is the dominant online booking web site for short term rentals.

Under current law, no residential rentals are permitted in Montgomery County for less than 30 days.  Faced with widespread illegal daily and weekly rentals, the County Council passed legislation in October, 2017 to allow these rentals where the property is the primary residence of the owner or owner-authorized resident of the rental property. However, condominiums, homeowner associations and housing cooperatives will still be allowed to ban or restrict short term rentals.  Continue reading

Maryland Developer Declaration Does Not Establish Assessment Lien

A developer’s Declaration notifies the purchaser of the property of a potential lien for unpaid assessments, but is not sufficient to create an assessment lien, according to a recent decision of the Maryland Court of Appeals–the top state appeals court.  A lien based on the contractual obligation to pay assessments is valid only if the party asserting the lien complies with the notice procedures of the Maryland Contract Lien Act.

At issue, in Select Portfolio Servicing, Inc. v. Saddlebrook West Utility Company, LLC, was a claimed lien as part of a deferred financing arrangement for the construction of the water and sewer infrastructure for a new home development in Prince George’s County, Maryland.  Continue reading

Fair Housing Claim Against Homeowner Association Director Allowed by District of Columbia Appeals Court

The District of Columbia Court of Appeals has ruled that a board member of a homeowners association may be personally liable for violating the disability discrimination provisions of the fair housing laws by delaying action on a homeowner’s request for a reasonable accommodation in the enforcement of the association’s leasing restrictions.

When  homeowners leased  their home to a non-profit organization for occupancy by recovering alcoholics and drug addicts, the association board asked the homeowners to terminate the lease because it violated the HOA bylaws which prohibited leasing to anyone not named in lease and prohibited subleasing.   After it received a request for waiver of the bylaw restrictions as a reasonable accommodation based on the disabilities of the sub-tenants, the HOA board approved the lease. Continue reading

Maryland Appeals Court Voids Condominium Parking Rule

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. Continue reading