New Maryland Laws
Beginning on October 1, 2017, several new laws will go into effect in Maryland governing condominiums and homeowners associations (“HOA”). With so much of new residential real estate being developed as part of an HOA or a condominium regime, these new laws will affect many homeowners in Maryland.
HOA Resale Inspection Fee – Under this new bill, an HOA is now authorized to charge a fee of up to $50.00 to conduct an inspection in connection with the resale of a lot if the inspection is required by the HOA’s governing documents. This new fee is in addition to any fees previously permitted by statute.
Amendments to Governing Documents (Condominium and HOA) – This new bill authorizes a condominium council of unit owners to amend the condominium bylaws upon the affirmative vote of at least 60% of the condominium unit owners in good standing, or by a lower percentage if required by the bylaws. The law also authorizes an HOA to amend its governing documents by the affirmative vote of at least 60% of the votes in the development by owners in “good standing”, or by a lower percentage if permitted by the governing documents. For purposes of the law, “good standing” is defined as an owner not being more than 90 days in arrears in the payment of any assessment or charge due to the condominium or HOA. (The bill does not apply to an HOA that issues bonds or other long-term debt secured in whole or in part by annual charges assessed in accordance with its governing documents or to a village or community association affiliated with the HOA.)
Notice of Sale of Common Elements and Common Areas – This new bill requires that the governing body of a condominium or HOA—or, if control has not yet transitioned from the developer to the unit owners or lot owners, the developer or declarant—give notice not less than 30 days before the sale, including a tax sale, of any common element or common area located on property that has been transferred to the condominium or HOA. The notice requirements may be satisfied by providing written notice to each unit owner or lot owner, or by posting a specified sign on the property to be sold and, if the condominium or HOA has a website, by providing notice on the website.
The 2015 Maryland General Assembly session is over. To see the laws pending for 2016, In January 2016 go to the site (link below), choose Real Property on the drop down menu and a list of bills being considered this year will appear. Keep checking every few days as bills are submitted over time. If you have an opinion on one or more of these bills, write or e-mail the appropriate committee and your district’s Senator and Delegate. Better yet, come to Annapolis and testify. This is your state government; have a voice!
The Maryland General Assembly has a new web site. To assess the text of a bill on this redesigned site, click on the bill number below which takes you to the bill’s administrative record. if you then click on the pdf symbol next to the bill number you will get the full text of the bill. Note that some existing laws are being modified. The law’s text being removed is in brackets and the text in bold is new text.
Legislation Signed Into Law in 2015:
HB 1007-Disclosures to Purchasers on Resale of Unit or Lot – Limitation on Fees
This law limits the cost of a resale package to $175 or the actual cost.
HB 0649-Contract for Sale of New Home
This law specifies, among other things, that a good faith deposit be returned should the contract be cancelled.
Legislation Signed into Law in 2014:
HB 602-Foreclosure of Liens
This law is a slight modification of a law passed last year. It stated that a common ownership community (COC) may only foreclose on a lien that consists solely of assessments, special assessments, interest and reasonable costs and attorneys’ fees. Foreclosure cannot occur for only fines, attorney fees or collection fees.
SB 865-Maryland Cooperative Transparency and Member Rights
This bill gives owners in Cooperatives many of the rights that condominium owners have, including a dispute resolution procedure.
Legislation Signed into Law in 2013:
HB 286, Foreclosure of Liens: This consumer protection law will limit attorney fees during the foreclosure of a lien to only an amount equal to the delinquent assessments. If the association does allow excessive legal fees to be part of a lien, this money can only be collected when the property changes hands. The law also prohibits foreclosure on any property based only on fines and/or legal fees owed.
HB 1308, Prohibition of Nonjudicial Evictions: This law protects renters against malicious acts by a landlord. Changing locks without a court order is no longer allowed.
HB 1090, Tenant Payment of Landlord Utility Bills: If a landlord fails to pay utility bills and the utility company threatens to turn off service, this law enables tenants to deduct payments from the rent due to a landlord and direct these payments to the utility company.
HB 388, Closed Meetings of Board of Directors: This law allows a condominium’a Board of Directors to conduct the negotiation stage of a business transaction in closed session. This stipulation is already part of the HOA.
Legislation Signed into Law in 2012:
HB 906, Prince Georges County-Fee for Administrative Services: Establishes administrative hearing services for the resolution of disputes involving common ownership communities located in Prince Georges County.
HB 126, Right of Entry: Would allow managers to enter a condominium unit to inspect and/or repair damage under certain circumstances.
HB 884, Default Notice to Condominium Unit Owners and Residents: Unpaid condominium utility bills in arrears 60 days or longer must be posted in the condominium’s common area by the utility provider.
SB 401, Towing or Removal of Vehicles from Parking Lots: Places a limit on what can be charged and states that there must be photographic evidence of a violation.
Legislation Signed into Law in 2011:
SB 532, Homeowners Association Elections-Enforcement by the Division of Consumer Protection- This MHA-supported law authorizes a lot owner who believes the board of directors has failed to comply with the election provisions of the association’s governing documents to submit the dispute to the Division of Consumer Protection, OAG.
HB 1246, A limited priority lien for assessments was passed The amount is limited to the lesser of four (4) months of unpaid regular assessments for common expenses or a maximum of $1,200.00 in assessments. Assessments, for the purpose of this law, does not include any late fees, interest, legal fees, costs for filing the lien or any fines or special assessments.
HB 679, Amendment to condominium bylaws requiring each condominium owner to maintain a condominium owner insurance policy can be approved a by 51% majorityrather than the 66 and 2/3 majority required by the Maryland Condominium Act.
Legislation Signed into Law in 2010:
HB 695, This bill gives homeowners living HOAs the same right to comment on a proposed budget 30 days before its adoption that condominium homeowners have had for years. Under current law, a condominium’s board is required annually to prepare and submit a proposed budget to unit owners at least 30 days before its adoption by the board at an open meeting. The proposed budget and notice of the meeting may be provided to HOA and condominium owners electronically, by posting on the HOA/condo’s web page, or inclusion in an HOA/condo’s newsletter. Additionally, any expenditure of more than 15% of the previously adopted budgeted amount must be approved by a budget amendment at a special meeting of the HOA lot owners. MHA welcomes extending the rights of condominium homeowners to HOA homeowners.
HB 620, This bill will extend the warranty period for HOAs and condominium associations until at least 2 years after the developer turns over control of the association to the homeowners This will make sure that that condominium and homeowners associations have a reasonable and fair opportunity to identify and make warranty claims and request warranty repairs when faced with developer construction defects.
(For more information go tohttp://www.cowiemott.com/Warranty-Reform-Legislation-Comes-To-Maryland/)
Legislation Signed into Law in 2009:
HB 137, Association Books and Records. This legislation requires associations to provide homeowners copies of most books and records, including board minutes, financial statements and employee salaries within 21 days of receiving a written request. The charge for copying and mailing books and records may not exceed the amount charged by Maryland courts (50 cents per page for copies made by a court clerk and 25 cents per page for copies made by a customer.) This took effect October 1, 2009.
HB 552, Closed Meetings of Board of Directors. This legislation repeals the provision that boards may hold a closed meeting on a two-thirds vote of the board members.Meetings can be closed only for consultation and discussion of legal matters and for discussion of delinquencies. It is still MD law that “a statement of the time, place, and purpose of any closed meeting, the record of the vote of each board member by which any meeting was closed, and the authority under this section for closing any meeting shall be included in the minutes of the next meeting of the board of directors.” This took effect October 1, 2009.
HB 287, Condominium Master Policy Insurance. This legislation provides that condominium master policy insurance policies must cover both general common elements and common elements in units. Up to $5000 of the deductible will be the responsibility of the unit owner where the damage originated. Each unit owner must be informed in writing each year as to the amount of the deductible. This took effect June 1, 2009.
HB 687, Fidelity Insurance. This requires an association to purchase fidelity insurance to provide for theindemnification of the community against loss resulting from fraud or criminal acts by any officer, managing agent or employee who disburses funds for the community. This insurance should be in place by October 1, 2009.
HB 667, Developer to Homeowner Transition. This legislation describes what documents must be transferred to owners upon the transition to owner control as well as sets requirements for the election of the first board. This took effect October 1, 2009.
Any violations of these or other Condo/HOA laws should be reported to the Office of Consumer Protection, Office of the Attorney General, Maryland. See “Dispute Resolution.”