2011 LEGISLATIVE UPDATE FOR MARYLAND COMMUNITY ASSOCIATIONS
During the 2011 session of the Maryland General Assembly, several new laws were enacted that affect condominiums and homeowners associations. Condominium and homeowners association’s boards of directors should take note of these new laws, which become effective on October 1, 2011, to determine whether any further action on their part is required so that their associations will obtain the benefit of the statutory changes.
According Limited Priority to Condominium and Homeowners Association Liens.
Condominiums and homeowners associations have been forced to write off the assessments and related charges that were unpaid by owners of units or lots that had been foreclosed upon where there was insufficient equity to satisfy the association’s lien. Now, with respect to all loans made on or after October 1, 2011, up to four months’ or $1,200.00 of the condominium or homeowners association’s assessments will be paid by the lender or third-party purchaser; and those monies will be paid before the previously recorded mortgage or deed of trust securing that loan.
Authorizing Condominiums to Require Unit Owners to Obtain Insurance Coverage.
This law, which is only applicable to condominiums, authorizes a condominium to amend its governing documents with provisions requiring individual unit owners to secure and maintain owner insurance policies for their units, and to provide evidence of such insurance to the condominium. A condominium may adopt such an amendment with the approval of owners representing a simple majority of votes in the condominium.
Homeowners Association Elections.
This law, which is applicable exclusively to homeowners associations, permits a homeowner to submit a dispute related to the association’s elections to the Division of Consumer Protection of the Office of the Maryland Attorney General. The Division of Consumer Protection is granted jurisdiction to adjudicate election disputes related to (i) the election notice, including the date, time and location; (ii) the manner in which a call for nominations is made; (iii) the format of the election ballot; (iv) the format and use of proxies during the election process; and, (v) the manner in which quorum is determined to be present for purposes of conducting elections.
We trust that this summary has been helpful and informative. If you have any questions about the new laws outlined above, or if you would like our assistance to draft or review amendments to your condominium’s governing documents to enable you to enforce the new law mandating that owners obtain insurance upon their individual condominium units, please do not hesitate to contact us. Thank you.