Developer Warranty Legislation Considered in Maryland

by Tom Schild

Maryland legislative committees are reviewing proposed legislation to ban condominium developers from limiting condo warranties in sales contracts and condominium bylaws.

In response to the broad warranty rights granted by Maryland law, developers have restricted these rights by provisions in sales contracts which shorten the time for filing court claims against developer.  Parties to a contract can agree to shorten the time to bring legal claims unless prohibited by statute from doing so.

A proposed bill (House Bill 740/Senate Bill 725) would prohibit provisions in sales contracts or other documents which shorten the statute of limitations applicable to warranty claims or other statutory or common law claims in connection with the sale of condominiums. 

The bill would also prohibit developer-imposed provisions in a condominium declaration or bylaw, or other documents which require unit owner approval for a condominium to pursue legal claims by litigation, arbitration, or other means.  Developers have utilized such restrictive approval provisions in recent years to deter warranty claims and other legal action against developers in connection with the development and construction of residential condominiums.

Maryland General Assembly Considers Condo and HOA Bills

by Tom Schild

Same-sex marriage, budget deficits and tax hikes top the high-profile issues for the 2012 Maryland legislative session now underway in Annapolis.  For condominiums and homeowner associations, the focus will be on rules adoption and enforcement procedures, developer to homeowner transition, and manager licensing.

Legislation has been introduced to require all Maryland condominiums and homeowner associations to follow a specific rules enforcement procedure before imposing fines, suspending voting rights or infringing on owner rights for violation of association rules (HB 76/SB 184).

Also proposed is a bill to extend to homeowner associations the rules adoption procedure which already applies to condominiums.  This legislation would require notice to all homeowners and allow an opportunity to comment on a proposed rule before it can be adopted by the board of directors (HB 155).

Other proposed legislation would aid homeowners in the transition from developer to homeowner control of condos and HOAs by requiring the developer to appoint an independent owner to the board of directors when homes representing 25 percent of the votes in the community have been conveyed.  It would also require a developer to maintain independent books, records and accounts from the time the association is established.   Additionally, a developer would be required to notify members of a homeowner-controlled board of any government bonds related to the association and provide additional notice prior to requesting release from such bonds (HB 79/SB 202).

Future posts on the Maryland Condominium & HOA Law Blog will provide updates on these bills and other proposed legislation during the 2012 Maryland legislative session which runs until mid-April.