LEGISLATIVE UPDATES

FOR HOMEOWNER ASSOCIATIONS & CONDOMINIUMS
 

Claims Against Developers and Vendors - Unenforceability of Certain Provisions

Real Property Article 11-134.1

Applicable to Condos Only

Effective October 1, 2018

 

This law establishes that any provision of an instrument, such as a declaration, bylaw, (“governing documents”) or contract for the initial sale of a condominium unit, made by a developer or vendor in accordance with the Maryland Condominium Act is unenforceable if the provision places specified limitations on specified building defect and other claims.

 

The law applies prospectively and may not be interpreted to have any effect on any provision of a declaration or bylaws of a condominium recorded in the land records of the county where the property is located or any other instrument executed before the law’s October 1, 2018 effective date.

 

What this means for your community: For Condominium’s built after October 1, 2018, provisions in the governing documents or other instrument that limit a unit owner, who is the initial purchaser of a unit, from filing a claim against the developer or vendor by shortening the statute of limitations or restricting the discovery rule are unenforceable.

 

Condominiums - Suspension of Use of Common Elements

Real Property Articles 11-101 & 11-103

Applicable to Condos Only

Effective October 1, 2018

 

This law authorizes a declaration of a condominium to provide for the suspension of the use of parking or recreational facility common elements by a unit owner that is more than 60 days delinquent in paying assessments. The law authorizes the council of unit owners to amend the declaration to add or repeal such a suspension provision by the affirmative vote of at least 60% of the total eligible voters of the condominium.

 

What this means for your community: Condominiums can now suspend parking privileges for unit owners that are delinquent in assessments provided certain conditions are met. Previously, the courts had cast doubt on a condominium’s authority to suspend parking privileges--this law provides clarity to this issue.

 

Deletion of Ownership Restrictions Based on Race, Religious

Belief, or National Origin

Applicable to HOAs Only

Real Property Article 11B-113.3

Effective October 1, 2018

 

The law requires the governing body of a homeowners association to delete any recorded covenant or restriction that restricts ownership based on race, religious belief, or national origin from the common area deeds or other declarations of property in the development by September 30, 2019.


What this means for your community: Unless your association contains restrictive covenants based on race, religion, or national origin, then this law will not affect you. However, if your governing documents do contain such restrictions, then they must be amended by deleting such covenants prior to September 30, 2019.

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Homeowners Associations - Number of Declarant Votes

Applicable to HOAs Only

Real Property Article 11B-111.7

Effective July 1, 2018


This law specifies that until all lots in a homeowners association (“HOA”) have been subdivided and recorded in the land records of the county in which the HOA is located, the declarant, when voting on an HOA matter, must have the number of votes equal to the number of lots that have been subdivided, recorded, and not yet sold to members of the public.


What this means for your community: The declarant can no longer give itself more votes per lot than other class members, for example, three votes for every one lot that is owned by the declarant. Essentially, one vote per lot, regardless if you are an owner or declarant.

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Amending the Governing Documents is Now Slightly Easier

Real Property Articles 11-104 & 11B-116

Applicable to HOAs & Condos

Effective October 1, 2017

 

The threshold for amending bylaws within a homeowners association or condominium has been lowered from 66 ⅔ percent to 60 percent (or by a lower percentage if required by the bylaws).  Those members in favor of an amendment must be in good standing, which means not more than 90 days in arrears for assessments or charges.

 

What this means for your community: Since it is now easier to amend the bylaws, communities may want to consider amendments to aging documents that affect collections, notices, meetings, etc.  Although the threshold has been lowered, it still requires more than a simple majority, but no longer a super majority.

 

Notice Requirement for Sale of Common Elements/Areas

Real Property Articles 11-108 & 11B-106.2

Applicable to HOAs & Condos

Effective October 1, 2017

 

While under declarant control, the declarant of a homeowners association or condominium must provide notice no less than 30 days before the sale of any common element or area by mail or posting.

 

What this means for your community: Not much.  Unless your community is still under control by the declarant, then this new law has no effect on homeowner controlled communities.

 

HOAs May Now Charge Up to $50 for Inspection

Real Property Article 11B-106

Applicable to HOAs Only

Effective October 1, 2017

 

While the sale of a home is under contract, a homeowners association may charge a reasonable fee not to exceed $50 for an inspection of a lot owner's lot IF the inspection is required by the governing documents of the homeowners association.

 

What this means for your community: Your homeowners association may now be able to recoup the cost of inspecting a lot that is under contract that it was not able to before the new law.  However, the inspection MUST be required by the governing documents to permit the charge.

 

Notice of Pending Foreclosure Sale

Real Property Article 7-105.2

Applicable to HOAs and Condos

Effective October 1, 2017

 

The new law requires the person authorized to make a foreclosure sale to give written notice of the proposed sale to a specified condominium or homeowners association that, at least 30 days before the date of the proposed sale, has recorded a statement of lien against the property.  It also requires the trustee, within 14 days after the postponement or cancellation of a foreclosure sale, to send a notice that the sale was postponed or canceled to the condominium or homeowners association.


What this means for your community: If your community holds a statement of lien recorded at least 30 days before the proposed sale, then you will receive notice prior to the sale, which would give you the option of satisfying the debt and to redeem the property.  Generally, this is not something a community would consider doing.  However, the pragmatic effect of the new law will make communities more aware of pending foreclosures and when those foreclosures have been canceled or postponed, which was not always the case.

Law Office of P. Hong Le, LLC

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Baltimore, Maryland 21202

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