2021 Maryland Condo and HOA Legislation Introduced

The 2021 Maryland legislative session is now underway and runs until mid-April. Although the top priority for the Maryland General Assembly is Covid-19 relief funding, several bills affecting governance of condominiums, homeowner associations and housing cooperatives have been introduced and are under consideration by Maryland House and Senate legislative committees.

Replacement Reserve Funding. Legislation proposes to require all Maryland condos, HOAs and co-ops to conduct a study of the reserves necessary for major repair and replacement of common property components. The developer would be required to have the initial reserve study prepared and contribute to the reserve fund. The board would then be required to have a reserve study done every 5 years and would be required to fund the recommended amount of reserves. (House Bill 313).

A separate bill to require a reserve study and funding the recommended reserve amount only in Montgomery County was also introduced (House Bill 567). A similar reserve study and funding requirement applicable only in Prince George’s County was enacted in 2020.

Board Member Training. Legislation would require all board members to complete a training course on the responsibilities of being a board member or officer of a Maryland condominium, HOA or housing cooperative within 90 days of first being elected or appointed. A similar training requirement currently applies in Montgomery County. (House Bill 361)

Regulation of Community Association Managers. A proposal requiring community association mangers to be licensed by a Maryland State Board of Common Ownership Community Managers is again under consideration. Requirements for obtaining a community association manager license are based on training, community association management work experience, and knowledge of state laws and regulations concerning common ownership communities. Similar legislation has been introduced for the past several years.

The manager licensing legislation also requires each community association to register annually with the State of Maryland. (House Bill 367)

Electric Vehicle Re-charging Equipment. Covenants and other restrictions of a condominium or homeowners association which prohibit, or unreasonably restrict, the installation or use of electric vehicle recharging equipment in a parking space owned by, or designated for exclusive use by, a homeowner would be void and enforceable under proposed legislation. Additionally, an association board would have to approve a homeowner’s request to install electric vehicle re-charging equipment in the parking space if the owner agreed to comply with specified safety and use conditions. Similar legislation has been considered for the past several years. (House Bill 116/Senate Bill 144)

These bills and other related information can be found on the website of the Maryland General Assembly. To be enacted, proposed legislation must be passed by the Maryland House of Delegates and Maryland Senate, and be approved by the Governor.

Posted by Thomas Schild Law Group, LLC which represents condominiums, homeowner associations, and housing cooperatives throughout Maryland (including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore) and Washington, D.C.

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.

Replacement Reserve Funding Required for Condos and HOAs in Prince George’s County, Maryland

A reserve study to determine the funding needed for future major repairs and replacement of common property in condominiums, homeowner associations and housing cooperatives in Prince George’s County, Maryland will now be required by a new Maryland law, effective October 1, 2020.

The replacement reserve study must be prepared by a qualified professional and identify each structural, mechanical, electrical and plumbing component of the common property and any other components that are the responsibility of the condo, HOA or coop to repair and replace. It must also state the normal useful life and estimated remaining useful life of each component; state the estimated cost of repair or replacement; and state the estimated annual reserve amount necessary to accomplish any future repair or replacement.

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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

2018 Maryland Legislative Update–New Laws Help Condos and HOAs

The hot topic during the 2018 Maryland legislative session was how Maryland will adapt to recent changes in federal income tax and health insurance laws.

Beyond the headlines, the Maryland General Assembly considered many bills which directly affect Maryland condominiums, homeowner associations, and housing cooperatives. Several new laws which help condos and HOAs were enacted. Continue reading

Maryland Legislature Bans Developer Restrictions on Condominium Warranty Claims

Legislation to prevent condominium developers from imposing restrictions on condominium warranty claims was passed by the Maryland General Assembly during the final days of the legislative session in April, 2018.  In recent years, condominium developers have put provisions in condominium bylaws and sales contracts to limit the ability to condominium associations and unit owners to sue the developer for construction defects. Continue reading