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

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

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.

Board Training Required for Condo and HOA Association Directors

Mid-way through 2016, hundreds of directors of condos, HOAs and coops in Montgomery County, Maryland have successfully completed the online training program now required by County law for directors elected, re-elected or appointed since January 1.  The training program, Community Governance Fundamentals, is provided by the Montgomery County Commission on Common Ownership Communities (CCOC).

The required education program is intended to promote more knowledgeable and responsible management of common ownership communities.  Topics include the roles and responsibilities of board members and homeowners, community governing documents, financial management, meeting procedures, and covenant and rule enforcement procedures.

The online training takes about 2 hours to complete, may be taken in phases over time, is interactive and includes short quizzes which must be passed to move on to the next section.  The program is also offered in a live format by community association attorneys and managers in conjunction with the Community Associations Institute.

A director who does not complete the training is not prohibited from continuing to serve on the board.  However, a CCOC dispute resolution panel may consider failure to complete the training in deciding a dispute between the association and a homeowner.

There are more than 1,000 common ownership communities in Montgomery County, which include over 130,000 dwelling units and 5,000 board members.

Posted by:  Thomas Schild Law Group, LLC, attorneys for Maryland condominiums, homeowner associations, and housing cooperatives in Montgomery County, Prince George’s County, Howard County and Frederick County.

Maryland Condo and HOA Legislative Hot Topics for 2016

With the Maryland legislature in the midst of its 2016 session which runs to mid-April, several bills which would affect condomium and homeowner association operations are now being considered by House and Senate legislative committees of the Maryland General Assembly.

Resale Disclosures

Legislation concerning resale disclosures would cap the amount which an association or it management company could charge an owner for providing the governing documents and other information  in connection the sale of the owner’s home. As introduced, the bill would limit the basic charge to $250 and allow additional charges of $100 to inspect the property for covenant violations and up to $100 for providing an expedited response to a request for resale disclosures.

Condo associations have long  been required to provide resale disclosure information.   If enacted, the bill would create a new obligation for a homeowners association to provide resale disclosure information to an owner who is selling a home in an HOA.

Condominium Construction Warranty

Also under review is legislation to amend the Maryland Condominium Act to prevent developers of residential condominiums from including provisions in sales contracts and condo governing documents which limit the ability of condominium associations to file suit to enforce construction warranties for the condominium common elements.

Among the provisions which the warranty bill would prohibit are those which purport to shorten the statute of limitations applicable to any legal claims; waive the “discovery rule” or other accrual date applicable to claims; and prevent a condo association from bringing claims on behalf of two or more unit owners.  It would also disallow developer-imposed requirements that as condo association obtain the approval of unit owners, the developer or others as a condition to commencing mediation, arbitration or litigation on behalf of the condo association.

Annual State Registration

Legislation has also been introduced which would require annual state registration of all condos, HOAs and coops and require associations to  provide contact information for the association board members and any management company and attorney.employed by the association.  It would also require information regarding the number and type of residential units,  fidelity insurance, replacement reserves, grievance procedures and any other information required by the Maryland Department of Assessments and Taxation.

Amendment of Governing Documents

A bill to make it easier to  amend the declaration, bylaws and other governing documents of condos and HOAs has also been introduced.  It would allow an amendment by a vote of owners in “good standing” which includes only owners who are not more than  3 months in arrears in payment of association assessments and have satisfied other requirements of the bylaws.  An amendment could be passed by  two-thirds of the total votes of owners in good standing, or by a lower percentage if required in the governing document. The legislation would also allow an owner’s failure to vote to be counted as that owner’s approval of the proposed amendment.

As of mid-February 2016, these bills are under review by House and Senate legislative committees and have not been enacted..

Posted byThomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations, and housing cooperatives in Maryland and Washington, D.C.

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Prince George’s County Adopts New Procedures to Resolve Condo, Co-op and HOA Disputes

Beginning in January 2016, Prince George’s County, Maryland will provide “alternative dispute resolution” assistance regarding disputes involving the governance of  condominium, co-op and homeowner associations.  The dispute resolution process will be conducted through the County Office of Community Relations (OCR) which will provide a “qualified dispute resolution specialist” to attempt to settle a dispute.

Disputes between associations and homeowners which may be submitted to the OCR include the authority of the association board of directors to require a person to take any action, or not take any action, involving a unit or common element; require a person to pay a fee, fine or assessment; or spend association funds or alter or add a common element.

The alternative dispute resolution procedure may also be used for disagreements concerning the failure of the association board of directors (when required by law or an association document) to properly conduct an election; give adequate notice of a meeting or other action; properly conduct a meeting; properly adopt a budget or rules; maintain or audit books and records; maintain or repair a common element if the failure results in significant personal injury or property damage; or exercise its judgment in good faith concerning the enforcement of the association documents.

Matters which are not subject to the OCR dispute resolution process include disagreements which involve the collection of an assessment validly levied, and the exercise of an association board’s judgment or discretion in taking or deciding not to take any legally authorized action.

A request to invoke the dispute resolution procedure may not be filed with the OCR until the requesting party makes a good faith attempt to exhaust all procedures and remedies provided in the association documents.

Additionally, under the recently enacted  Prince George’s County law which establishes the alternative dispute resolution procedure, a community association member “may not file an action in any Prince George’s County Court until he/she has first attempted conflict resolution” through the OCR.  The new County law also prohibits a community association from taking “any action to enforce or implement its decision until the time to file a request for alternative dispute resolution process has been exhausted and the opposing party has not requested alternative dispute resolution process”.

Posted by Thomas Schild Law Group, LLC.

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