HUD Urged to Limit Association Fair Housing Liability

More than two years after new fair housing rules regarding discriminatory actions of residents which create a hostile housing environment for other residents were adopted by the United States Department of Housing and Urban Development (HUD) in October 2016, it remains uncertain what  community association boards and managers must do to avoid liability for not ending the discriminatory conduct of owners and other residents of condominiums, homeowner associations, and housing cooperatives.

The HUD rules establish nationwide standards which HUD will apply in enforcing the federal Fair Housing Act with respect to alleged harassment based on race, religion, national origin, sex, familial status or disability.    In addition to liability for a person’s own conduct and the conduct of that person’s agents and employees, the 2016 fair housing rules also make a community association liable for failing to take prompt action to end a discriminatory housing practice by residents where the person knew, or should have known, of the discriminatory conduct and had the power to correct it.  The HUD rule does not require that the housing provider have a discriminatory intent in not intervening to stop the resident’s discriminatory conduct. Continue reading

Condominium Owner Negligence Bars Claim Against Contractor

Where a condominium unit in Baltimore County, Maryland was damaged by steam escaping from the heating system when a unit owner hired a plumber to remove heat radiators in the unit  and was negligent by not requesting the contractor to re-install  the radiators after the unit was painted, the condo insurance carrier may not recover the cost to repair the unit from the plumbing contractor, a federal trial court in Maryland recently ruled.

The radiators were removed in July when the central heating system was not operating, and the unit owner did not request the contractor to re-install the radiators until November after the heating system had been tuned on. The cost of more than $120,000 to repair the damage to the unit was covered by the condominium’s property damage insurance.  The insurance company paid the condominium association which then paid the unit owner who hired a contractor to make the repairs to the unit.

The insurance carrier filed suit against the plumbing contractor to recover the amount it paid to the condominium.  The contractor contended that the claim should not be allowed because the unit owner was an insured under the condo master insurance policy and was negligent in not contacting the contractor to re-install the radiators. Continue reading

Short Term Rentals Now OK in Montgomery County, Maryland

Short term daily and weekly rentals are now allowed in all residential areas of Montgomery County, Maryland, beginning July 1, 2018.

Previously, no residential rentals were 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 are still allowed to ban or restrict short term rentals Continue reading

2018 Maryland Legislative Update–New Laws Help Condos and HOAs

The hot topic during the 2018 Maryland legislative session was how Maryland will adapt to recent changes in federal income tax and health insurance laws.

Beyond the headlines, the Maryland General Assembly considered many bills which directly affect Maryland condominiums, homeowner associations, and housing cooperatives. Several new laws which help condos and HOAs were enacted. Continue reading

Maryland Condo and HOA Restrictions on Commercial Vehicle Parking

Maryland condominium and homeowners association covenants often prohibit parking “commercial vehicles” without specifying what constitutes a commercial vehicle.

Where a word or phrase used in the declaration of covenants for a condominium or homeowners association is not defined in the covenants or by statute, the board of directors has broad discretion to adopt rules which explain how the provisions of the covenants will be applied.

If there are no community rules which define what constitutes a “commercial vehicle”, it is likely that a court would apply the Maryland statutory definition of “commercial motor vehicle” used in connection with the requirements for obtaining a commercial driver’s license.  Under that definition, a commercial vehicle includes any vehicle with a gross weight rating of at least 26,001 pounds; a vehicle designed to transport 16 or more passengers; or any size vehicle used to transport hazardous materials.  Excluded from the statutory definition are fire and rescue vehicles with audible and visual signals. Continue reading

Montgomery County Towing Law Yields Class-Action Settlement

Faced with a class action suit based on a Montgomery County towing law which makes a property owner liable for the actions of a towing company which is hired to tow unauthorized vehicles, dozens of condominiums and homeowner associations have agreed to settle the suit by paying nearly $400 per tow.

The suit was filed as a class action suit by vehicle owners against over 500 property owners in connection with over 20,000 tows.  It claimed that the towing company improperly asserted a possessory lien on the towed vehicles by refusing to release the vehicle until the tow charges were paid.  It also claimed that the towing company violated County and Maryland law by not providing required notices to the vehicle owners when they came to retrieve their vehicles and by imposing charges for credit card payment.

Although the condos, homeowner associations, and other property owners were not directly involved in the violation of towing law procedures, Montgomery law imposes joint and several liability on property owners for a towing company’s actions and imposes liability for three times the expenses incurred by the vehicle owner.

The cost of each tow was between $168 and $178 which could have resulted in damages of $504 and $534 per tow.  Therefore, the trial court judge who approved the settlement in January 2018 found the settlement of $390 per tow to be “fair, reasonable and adequate”.  Each property owner also was required to pay about $28 per tow as a portion of the legal fees incurred to defend and settle the suit based on a pro rata share of the number of tows which were part of the settlement.

Some condominiums, HOAs and other property owners opted not to settle the suit and the litigation of legal defenses and factual issues may continue to trial.

Although many contracts between the property owners and towing company require the towing company to indemnify the property owners for any improper or unlawful action by the towing company, an agreed $22 million judgment against towing the company with a payment of over $300,000 forced the company out of business and left the property owners without recourse against the towing company.  The claims against some condos and HOAs were covered by the association’s insurance.

Because condos, homeowner associations, and housing co-ops in Montgomery County, Maryland can be liable for up to three times the cost of an improper tow, each association which tows vehicles from the common property should ensure that its towing contract requires the towing company to provide and follow towing procedures which comply with state and local law.

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.