2016 Maryland Condo and HOA Legislation—What’s Hot and What’s Not

As the Maryland General Assembly heads to the end of the 2016 session on April 11, some bills regarding community association governance are still under consideration.  Others have been killed in committee.  To become law, a bill must be passed by the Maryland House and Senate and signed by the Governor.

Here’s What’s HOT!

Resale Disclosures. A bill to cap the amount which an association or management company can charge for providing resale disclosure information has passed the House and is headed to the Senate.  If enacted, it would also create a new obligation for homeowners associations to provide resale disclosure information to an owner selling  a home in an HOA.

Annual State Registration.  Legislation to require each condo, co-op and HOA to register with the state was passed by the House after it was scaled back to limit the information required.

Foreclosure and Tax Sale Notices.   Where condos and HOAs have recorded assessment liens, a bill passed by the House would require lenders to notify the association of any proposed, postponed or canceled foreclosure sale.  Another bill passed by the House and Senate would require tax sale purchasers to notify condos and HOAs when a court suit is filed to prevent owners of property in those communities from retaining ownership of property purchased at a tax sale.

 

….and Here’s What’s NOT!

Condo Construction Warranty.  House and Senate committees rejected proposed changes in the Maryland Condominium Act to prohibit provisions in condo sales contracts and bylaws which limit the ability of condo associations to file suit to enforce construction warranties.

Amendment of Governing Documents.   A House committee also killed legislation to make it easier to amend the governing documents of condos and HOAs by allowing an owner’s failure to vote on a proposed amendment to be counted as that owner’s approval of the proposed amendment.

 

 

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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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.