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.

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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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

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

District of Columbia Condominium Law Amended To Require New Owner Notices

The District of Columbia Condominium Act has been amended to require new notices and information be provided to condominium purchasers and unit owners.

When a condominium advises the owner of its intention to take legal action to collect any past due amount owned by the unit owner, the owner must be provided with a statement of account showing the total amount past due, including a breakdown of the categories of amounts claimed to be due and the dates those amounts accrued. Continue reading