Maryland Eases Hurdle to Amending Condo and HOA Covenants

The governing documents of Maryland condominiums and homeowner associations often require that amendments to the governing documents must be approved by up to 100 percent of the lenders who hold the mortgage of homeowner’s property. The Maryland Condominium Act for several years has allowed lender approval of most condominium bylaw amendments to be presumed if a lender does not object to the amendment within 60 days.

A new Maryland law extends the presumed lender consent to amendments to a condominium declaration and to all governing documents of a homeowners association, including the declaration of covenants, bylaws, deed and agreement, and other recorded covenants and restrictions. The hurdle of obtaining lender approval has been eased for nearly all amendments to condominium and HOA covenants. The only exceptions are amendments which alter the priority of the mortgage lien; materially impair or affect an owner’s unit or lot as collateral; or materially impair or affect the right of the lender to exercise rights under the mortgage or law.

The presumed consent procedure requires the association to deliver the proposed amendment to each lender entitled to notice of the amendment. If the lender does not object in writing within 60 days of actual receipt of the proposed amendment, the lender is deemed to have consented to the amendment.

The new amendment procedure is included in the Maryland Condominium Act and Maryland Homeowners Association Act, effective October 1, 2020.

Separately, the Maryland Condominium Act insurance provisions were amended this year to allow a condominium to require a unit owner to pay the master insurance deductible amount up to $10,000 where the cause of damage originates in the owner’s condominium unit. This is increase from $5,000, beginning in October, 2020.

And, the Maryland Condominium Act and Maryland Homeowners Association Act were amended to require all Maryland condos and HOAs to submit the approved annual budget to all owners within 30 days after the meeting at which the budget was adopted. This is in addition to the requirement that the proposed annual budget be provided to owners at least 30 days before it is adopted. The budget information may be provided by email, posting on the association website or inclusion in the association newsletter.

Another new Maryland law requires all condominiums, housing cooperatives, and homeowner associations in Prince George’s County to obtain a replacement reserve study of the condition the common property every 5 years and include in the annual condominium fees a portion of the estimated future cost to repair and replace major components of the condominium.

2020 Vision: Maryland Condominium Legislative Update

Condominium insurance, replacement reserves and dispute resolution procedures were among the condominium and homeowners association topics which were considered during the 2019 Maryland legislative session.  However, virtually no new laws affecting community governance were enacted this year.

Looking ahead to 2020, legislation concerning insurance, reserves and dispute resolution is likely to introduced again.

Condominium Insurance Deductibles

Where damage to condominium units and common elements is caused by fire, water or other perils covered by the master property damage insurance, the Maryland Condominium Act requires a unit owner to pay up to the first $5,000 of repair expenses when the cause of the damage originates in that owner’s condominium unit.  While some condos choose a higher deductible, others can only obtain insurance with a deductible of $10,000 or more.  This leaves the condominium association responsible for repair expenses between $5,000 and the amount covered by insurance. 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

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

Condo and HOA Board Member Training Classes

On Sunday February 25, 2018, a training class for condominium, homeowner association, and co-op board members was presented at the Civic Building in Silver Spring, Maryland by attorney Tom Schild of Thomas Schild Law Group, LLC and Mark Fine, Chair of the Montgomery County Commission on Common Ownership Communities (CCOC).    

All common ownership community board members in Montgomery County, Maryland are required to take a 2-hour training class within 90 days after being elected or appointed to the board for the first time.  The CCOC’s Community Governance Fundamentals class provides board members with a basic understanding of the responsibilities and procedures for governing their community association. The training class topics include association governing documents and statutes, meeting and decision-making procedures, financial management, and owner rights and responsibilities.

Attorney Scott Silverman of Thomas Schild Law Group, LLC  presented a program on hot topics in Fair Housing in Washington, D.C. at Annual Conference of the Washington Metro Chapter of the Community Associations Institute (CAI) on Saturday March 10, 2018.  Topics include an overview of fair housing laws, board response to disputes between residents, and accommodations for service and emotional supports animals.

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 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