2015 Maryland Legislative Session Ends With No New Community Governance Laws

 by Tom Schild

The 2015 legislative session of the Maryland General Assembly ended April 13 after lots of talk but not much action on bills concerning condos, coops and homeowner associations.

Legislation to extend resale disclosure requirements to homeowner associations and cap the fees which may be charged by condos and HOAs died in the final hours of the legislative session.  As passed by the House of Delegates, the bill would also have limited the liability of a condo or HOA for issuing an incorrect resale disclosure statement. The Senate approved the fee cap but did not agree to the liability limits. Therefore, the legislation was not enacted.

A bill to prevent developers from limiting condominium statutory warranty rights was withdrawn; and a bill to require access to common areas for political candidates was rejected on initial review by a House legislative committee.

A proposal  to eliminate a 3-month waiting period before a housing coop can initiate legal action to evict a coop member for not paying assessments was referred for further study.  Legislation to regulate community association managers was not considered this year for the first time in several years

Although not limited to community associations, several other bills would have made it more difficult to collect assessments from delinquent owners.  One bill would have restricted the ability to collect court judgments by increasing the amount  exempt from garnishment.  Several other bills proposed to delay residential foreclosures.  These bills were not enacted.

These topics may get another look next year.  For 2015, the General Assembly session had lots of talk—but no new laws regarding governance of condos, coops and HOAs.

POSTED BY: Thomas Schild Law Group, LLC, www.schildlaw.com

 

2015 Maryland Legislative Session Heats Up

by Tom Schild

Despite the recent arctic air sweeping through Maryland, the 2015 Maryland legislative session is heating up.

After a slow start in January with many new legislators and a new Governor taking office, a rush of bills were introduced in February.  Among the bills concerning governance of Maryland condos, coops and HOAs are proposals to (1) prevent developers from limiting condominium statutory warranty rights; (2) require access to common areas for political candidates; and (3) require homeowner associations to provide resale disclosure information and cap the fee charged by condos and HOAs for providing resale disclosure information.

A proposal to change the housing cooperative law adopted in 2014 would eliminate a 3-month waiting period before a housing coop could initiate legal action to evict a coop member for not paying assessments.

Other legislation under review would restrict the ability to collect court judgments for delinquent assessments. Although not limited to condos, coops and HOAs, the bill would make it more difficult to obtain money in bank accounts and sell property to pay a person’s debts.

Legislation regarding licensing of community association managers (which had been considered the past several years) has not been introduced in 2015.

The 90-day legislative session of the Maryland General Assembly runs until April 13, 2015.

2015 MARYLAND LEGISLATIVE FORECAST

by Tom Schild

The headline news—Republican Larry Hogan takes over as Maryland Governor.

Beyond the headlines, the leadership of the legislative committees which craft most new laws regulating Maryland condominiums and homeowner associations will undergo the most sweeping change in a nearly decade.  Although the Maryland General Assembly remains firmly in Democratic hands, there will be several new committee chairs in 2015.

The previous chair of the Senate Judicial Proceedings Committee has been elected Maryland Attorney General.  In the House of Delegates, the longtime chair of the House Environmental Matters Committee is leaving that committee to become chair of the House Appropriations Committee.  And, the House Real Property Subcommittee will see new leadership since the prior chair did not run for re-election.

What does this mean for legislation regarding governance of condos and HOAs? Uncertainty.

With changes in committee leadership and newly-elected legislators joining the committees responsible for reviewing bills concerning the Maryland Condominium Act and Maryland Homeowners Association Act, 2015 will be a year for learning about legislative proposals which have been under consideration the past few years.

Likely to be introduced again are bills concerning state licensing of community association managers, condominium construction warranties, and condominium resale disclosures.  Legislation on these matters previously had significant support but will now get a fresh look.  Whether any of these bills will pass in 2015 remains to be seen.

Any legislation approved by the General Assembly must also pass scrutiny by the new Governor who campaigned on promises of lower taxes and less government regulation.  With extensive business experience in real estate development and sales, Governor Hogan can be expected to carefully review legislation affecting the development, sale, and management of property in condominium and homeowner association communities.

For 2015, the only certainty is uncertainty.

POSTED BY:  Thomas Schild Law Group, LLC, www.schildlaw.com

More on Pit Bulls—Maryland Appeals Court Affirms Strict Liability

by Tom Schild

The Maryland Court of Appeals on August 21 affirmed its April 26 ruling that owners of pit bulls and property owners who have the right to control the presence of pit bulls are strictly liable for injuries caused by such dogs,  However, the court did modify its earlier decision so it does not apply to mixed breed pit bulls.

In its April 26 decision in Tracey v. Solesky, the court ruled that property owners who know, or have reason to know, of the presence of a pit bull on their property are liable for injuries caused by such dogs, whether or not they know a particular dog has a history of vicious propensities.  The court concluded that pit bulls are inherently dangerous animals.

According to the appeals court August 21 decision, the strict liability standard for injuries caused by pit bulls “simply requires that those who possess them or permit them on their property take reasonable steps to assure that they do not run loose or otherwise are in a position to injure people”.

The appeals court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one  breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

In response to the appeals court decision, the Maryland General Assembly considered several bills regarding liability for injuries caused by dogs during its recent Special Session.  Although the House and Senate passed similar versions of legislation, the differences in the two versions were not resolved before the General Assembly adjourned until January 2013 without enacting any dog bite legislation.

With the appeals court standing by its April 26 ruling to impose strict liability on pit bull owners and property owners, legislation regarding dog bite liability is expected to be considered again during the regular 2013 legislative session.

Faced with greater potential liability for pit bull bites, some landlords reportedly are terminating leases of tenants who have pit bulls and some dog owners are surrendering their pit bulls to animal shelters.  And, some condominium, homeowner association and coop boards are considering a ban on pit bulls.

Pit Bull Legislation Stalls

by Tom Schild

After considering several bills regarding liability for injuries caused by dogs, the Maryland General Assembly has adjourned until January 2012 without enacting any dog bite legislation.

During the recent Special Session, the Senate and House passed different versions of legislation which would impose dog bite liability on landlords and others who have the right to control the presence of dogs on their property only where there is knowledge of a particular dog’s presence and vicious propensity.  This would have restored the negligence standard of liability modified by a recent appeals cout decision with respect to injuries caused by pit bulls and mixed breed pit bulls.

For dog owners, the proposed dog bite legislation would have extended the strict liability standard to injuries caused by all breeds of dogs, with a few exceptions for specific circumstances.

After passing casino legislation, the General Assembly adjourned on August 15 without taking final action on the dog bite bills.

Appeals Court Ruling–Strict Liability for Pit Bulls

The proposed dog bite legislation was in response to the April 26 ruling of the Maryland Court of Appeals–the highest state appellate court–that both the owner of a pit bull dog (or pit bull mixed breed) and a landlord or other person with the right to control the presence of such dogs would be strictly liable for all injuries caused by such dogs whether or not there was any knowledge that a particular dog had a history of being vicious. Concluding that pit bulls are inherently dangerous animals, the court decision in Tracey v. Solesky changed the long-established common law (i.e. court-made law) liability standard for pit bull owners and property owners.

The  appeals court stated that the new strict liability standard applies to any new claims arising after the date of its decision.  Faced with greater potential liability for pit bull bites, some landlords reportedly began terminating leases of tenants who had pit bulls and some pit bull owners surrendered their dogs to animal shelters.  Condominium, homeowner association and coop boards began consideration of a ban on pit bulls and pit bull mixed breeds.

On May 25, the Court of Appeals was asked to reconsider its decision.  This created  uncertainty whether the ruling would remain effective as of April 26 if it was not modified on reconsideration.  In response to a legislator’s inquiry as to the status of the court ruling, a Maryland Assistant Attorney General issued an opinion letter on July 10 advising that, in her opinion, the new liability standard announced by the Court of Appeals was not yet in effect because the court ruling was not a final decision, so long as the request for reconsideration was pending.  But, that letter also indicated it was uncertain if the court would agree with her opinion and urged private parties to consult their own legal counsel for advice.

The court decision has been widely criticized for its conclusion that pit bulls are inherently dangerous, for applying a different standard of liability to one breed of dog, and for making landlords and others with the right to control the presence of pit bulls on their property strictly liable for injuries caused by such dogs.

Legislation Proposed to Overturn Court Ruling

In response to criticism of the appeals court ruling by animal rights advocates, landlords, the Community Associations Institute, and insurance companies, the Maryland General Assembly acted quickly during its August special session to consider legislation to overturn the court ruling while the request for court reconsideration was still pending.

On behalf of the Community Associations Institute, I attended the House Judiciary Committee hearing to explain the special problems of condos, HOAs and coops in banning, identifying and removing pit bulls and mixed pit bull breeds.  Unlike landlords which can readily ban pit bulls and evict tenants who violate pet restrictions, it is far more difficult, time-consuming and costly for a community association to ban certain breeds of dogs and have prohibited dogs removed from the community.  The final House version of the legislation included an amendment to make clear that condominiums, homeowner associations, and housing cooperatives are not subject to the strict liability standard.

With the support of animal rights groups, the Senate and House passed bills to generally extend the strict liability standard to owners and keepers of all dogs, with a few exceptions for veterinarians, police and military personnel, and other specified circumstances.

With the support of organizations representing landlords, community associations, insurance companies and animal rights advocates, both the Senate and House-passed versions overturn the strict liability standard for property owners and restores the common law liability standard for property owners which was in effect prior to the court ruling in Tracey v. Solesky Under the negligence standard, a landlord, condominium, homeowners association, housing cooperative or other person with control over the presence of a dog can still be liable for injuries caused by a dog where there is knowledge of the dog on the property and knowledge of its vicious propensities.

No Dog Bite Legislation Enacted

Although similar (but different) versions of dog bite legislation was introduced, considered,  and passed by the Maryland Senate and House in less than a week during the special legislative session, the differences were not resolved and no new law was approved by the General Assembly.  The entire topic of dog bite liability is expected to be revisited again during the regular January 2013 legislative session….when the legislative dogfight will continue.

 

Maryland Foreclosure Laws Revised…..Again

by Tom Schild

Maryland foreclosure laws have been revised again for the fifth consecutive year.  Previously, changes were made to provide homeowners with more time, additional notices, and an opportunity for mediation before a foreclosure sale can occur.

For condominiums and homeowner associations, newly enacted mediation procedures could further delay lender foreclosure sales.  But, new post-sale notice requirements could help associations track foreclosure sales and collect post-sale assessments.

Maryland Governor Martin O’Malley last year appointed a Maryland Foreclosure Task Force to examine recent foreclosure trends in Maryland and to make recommendations regarding state government policies to aid homeowners and neighborhoods impacted by home foreclosures

Foreclosure Mediation  

Adopting a  recommendation of the January 2012 Task Force report, the Maryland General Assembly amended the foreclosure laws to allow a lender and homeowner to participate in “pre-file mediation” with a government mediator before a foreclosure court suit is filed.  To participate in such mediation, the owner must receive housing counseling services from a non-profit organization or government agency.  Where there is “pre-file mediation”, the homeowner will not be entitled to additional mediation after a foreclosure suit is filed (HB 1374).

Foreclosed Property Registry

Separately, a bill to establish a Foreclosed Property Registry was enacted.  A foreclosure purchaser will be required to notify the Maryland Department of Labor, Licensing, and Regulation (DLLR) after a sale has occurred and after a deed is recorded.  This will allow government agencies to better locate the foreclosure purchaser after the sale until the property is formally transferred by recording a new deed in the land records.

The purchaser information filed with the Foreclosed Property Registry will be available only to DLLR and local government officials.  Those agencies may provide the information to a person who lives on the same block as the foreclosed property is located and to a homeowners association or condominium where the property is located (HB 1373).

Post-sale Notice

Additionally, the purchaser of residential property at a foreclosure sale will now be required to provide a copy of the court ratification order to the tax office for the County where the foreclosed property is located.  This is intended to enable state and local governments to collect the correct property tax due for property which is no longer owner-occupied from the date of foreclosure sale regardless of when the deed in recorded (SB 123).