Bankruptcy 101: Chapter 7 vs. Chapter 13

Dec 12

December 1, 2016


bankruptcy We have been asked on numerous occasions recently to provide guidance to our community association clients about the effects that bankruptcy has on their collections cases. The most common forms of bankruptcy by owners in the community association context are filed pursuant to either Chapter 7 or Chapter 13 of the United States Bankruptcy Code. Because of the confusion surrounding bankruptcy, many boards see bankruptcy as a negative for their community. Though the filing of bankruptcy certainly can have negative consequences, bankruptcies can actually be a good way for owners to restructure their debts and do not necessarily discharge all of the obligations owed to the community. That is, the bankruptcy may actually result in the association receiving more of the funds owed than they otherwise would have.


First, it is important to understand that, in both Chapter 7 and Chapter 13 bankruptcies, the operative date is the filing of the Voluntary Petition for Individuals Filing for Bankruptcy (the “Voluntary Petition”). This differs from an ordinary breach of contract lawsuit, in which the judgment date (once the court decides the case) is the significant date. In bankruptcy, as soon as the Voluntary Petition is filed, the delinquent owner’s account should be split into two groups: (1) amounts due pre-petition and (2) amounts due post-petition. Once the Voluntary Petition is filed, an automatic stay prohibiting all collection activities is in place during the pendency of the bankruptcy proceeding, meaning that the association and its attorney may not attempt to collect the debts in any of the ordinary fashions. If the bankruptcy is dismissed, however, it is as if the bankruptcy was never filed; the pre-petition and post-petition amounts should be merged back into one account, and the community may resume its collection activities.


Despite these similarities, there are important differences between the two main types of bankruptcies that affect how each case is handled. A Chapter 7 is known as “liquidation.” If the debtor meets the “means test,” meaning that their income is below a certain threshold, then the Chapter 7 Trustee will review all assets, sell any non-exempt assets to pay creditors, and then discharge the remaining creditors.


In the community association context, a Chapter 7 bankruptcy functions to discharge an owner’s personal obligation for delinquent pre-petition amounts only. The owner who filed bankruptcy is also responsible for the post-petition amounts that come due and owing after the filing of the bankruptcy.


There are three important details to keep in mind regarding a Chapter 7 bankruptcy. First, the bankruptcy stay only applies to the owner who filed the bankruptcy. Therefore, the community may still pursue collections against any co-debtor on the same property who did not file bankruptcy. Second, although the owner no longer has a personal obligation to pay, the liens filed against the property survive the bankruptcy. Accordingly, once the personal debt is discharged and the bankruptcy stay is no longer in effect, the community should still receive payment of the pre-petition amounts, secured by liens, in the event that the property is transferred or refinanced. The community also retains the ability to foreclose those pre-petition liens despite the discharge of the personal debt. Third, the Chapter 7 does not affect the post-petition amounts; all assessments that come due after the filing of the Voluntary Petition remain the obligation of the owner.


A Chapter 13 bankruptcy functions as a restructuring of the owner’s debt. Much like the Chapter 7 bankruptcy, there is a collections stay in place during the pendency of the bankruptcy. However, in a Chapter 13 bankruptcy, the debt is restructured and a payment plan on the pre-petition amounts is created and approved by the bankruptcy court. As a secured creditor (meaning the community has liens against the property) and after filing the requisite proof of claim, the community will often receive full payment on the pre-petition amounts through the Chapter 13 payment plan, which typically allocate payments over sixty (60) months. In other instances, the debtor may choose to deal with the association’s debt outside of the plan. If the community is unsecured (does not have liens against the property), the community typically receives payment of only a fraction of its claim, which is another reason why it is so vital for collections accounts to be turned over promptly and for the association’s attorney to file liens against the property.


Owners who wish to keep their property are responsible for payment of the assessments and related fees that come due after the filing of the Voluntary Petition. If these post-petition amounts are not paid, the association may file a motion to lift the bankruptcy stay and utilize ordinary collections procedures. A limited exception exists for owners who “surrender” their property in the Chapter 13; there is a split in the decisions among federal courts as to whether owners are responsible for post-petition amounts in this instance. The inconsistent rulings do not provide clear guidance and require advice on a case-by-case basis on whether the post-petition amount should be pursued by the Association.


Unlike a Chapter 7 bankruptcy, however, a Chapter 13 bankruptcy creates a stay for collection activities against the co-debtors, even if the co-debtor did not file bankruptcy. Additionally, liens against the property may be stripped in certain situations, thus making the community an unsecured creditor. For instance, courts will typically allow owners to strip the association lien if a senior lien (most commonly a mortgage or deed of trust) exceeds the value of the property. Bankruptcy courts conduct a global review of all of the debtor’s assets and debts in the bankruptcy; because there is no value or equity in the property supporting the community’s claim as a secured creditor, courts allow the junior liens to be “stripped” off the property, and the community’s claim becomes unsecured. Deciding whether to challenge an owner’s attempt to strip a lien involves many factors and should be reviewed by an attorney on a case-by-case basis.


It is also important to note that revoking privileges for nonpayment of assessments (such as parking permits, voting rights, and pool privileges) is considered a violation of the bankruptcy stay. Therefore, if an owner files bankruptcy and the stay has not been lifted, the community must reinstate the previously revoked privileges during the pendency of the bankruptcy stay.


The objective of this letter is to provide general guidance in the event an owner files bankruptcy. Because each case is different, however, we stand ready to assist to answer questions about your individual cases.

December 1, 2016

Dec 12

Dear Board Members and Managers:


As we mentioned in previous newsletters, we have grown exponentially over the last few years, having added attorneys, paralegals and administrative staff to ensure that our clients receive a customized experience catered to their community’s specific needs. With that being said, we are excited to welcome a new senior associate attorney to our team, Lauri J. Corley, who will be handling a significant portion of our transactional work such as contract review and negotiation, legal opinion letters, document reviews, amendment drafting and more.


Lauri J. Corley has been practicing community association law in Maryland for over a decade.  Since graduating from the University of Baltimore School of Law with honors in 2006, Lauri has worked as an associate at a law firm located in Baltimore County concentrating her practice in community association law and general real estate and business matters. She represented both national and local developers and builders as well as provided counsel to management companies and boards of directors of community associations throughout Maryland, advising them on a variety of issues relating to common interest communities, including the formation, development and continuing governance of master planned communities, condominium regimes, homeowners’ associations, land condominiums and mixed-use projects. Lauri’s experience includes drafting of declarations, bylaws, articles of incorporation and rules and regulations as well as preparation of consumer disclosure materials in compliance with applicable Maryland law.  In addition, for post- development community associations, Lauri reviewed and interpreted existing community documents relative to clients’ rights and obligations, and prepared comprehensive amendments to the documents in accordance with the clients’ desires and needs as well as to ensure compliance with applicable law.  Lauri is a member of the Maryland State Bar Association, Section of Real Property, Planning and Zoning, the Maryland Building Industry Association, the Professional Women in Building Council and the Community Associations Institute. Lauri lives in Baltimore County with her Husband, daughter and son, and she enjoys spending time with her family and traveling. Please join me in welcoming Lauri to our great team!



Enclosed please also find a Special Client Letter for your review regarding Bankruptcy which was written by Gregory T. Fox, Esq. We hope that you will find this letter interesting and informative.


As always, should you have any questions or concerns, please do not hesitate to contact me or any of the other attorneys here at Nagle & Zaller.




Craig B. Zaller


October 1, 2016

Oct 07



Dear Board Members and Managers,


This year has gone by extremely quickly; we’ll be celebrating the start of a new year in no time! At this time of year, we typically experience the calm before the storm also known as the holidays. This is also a busy time of year for Board Members and Property Managers, as many are working on their budgets for next year.

Two words: Budget Season, they alone have the ability to induce stress. Don’t panic! We have a few tips to guide you through this process.

To our Maryland Clients, we remind you to be sure to comply with the laws regarding the adoption of your budget.  Specifically, your Board should prepare and submit an annual proposed budget to all owners within your community thirty (30) days before the budget is to be adopted. The proposed budget must include your community’s income and contain line items for administrative costs, maintenance costs, utilities, general expenses, reserves and capital expenses. The budget must be adopted at an open meeting. The proposed budget and notice of the open meeting to discuss the budget must be sent to each owner, and notice may be delivered electronically to owners who have “opted into” receiving notices electronically.  Maryland law also requires that any expenditures that become necessary after the budget is adopted must be approved by amending the budget if they would result in an increase in the amount of the owner’s annual assessments for the current fiscal year by more than 15% of the budgeted amount previously adopted. However, if the expenditure in question is required because of a condition, that, if not corrected, could reasonably result in a threat to the health or safety of the owners or a significant risk of damage to the community, no amendment to the budget is required, irrespective of the amount of the proposed expenditure or its effect upon the owner’s assessment. If an amendment to the budget is required, necessitating a special meeting of the Board or of the owners, as the case may be, the owners must receive at least ten (10) days’ written notice of that special meeting.

Our District of Columbia Clients are reminded to follow the procedures, if any, set forth in your community’s governing documents regarding the adoption of your budget. If your community’s governing documents do not address the procedures to adopt a budget, we recommend that you follow the requirements set forth above for our Maryland clients, as

D.C. has not enacted provisions governing the adoption of a community association’s budget.

We also want to take a moment to let you know that we have welcomed a new Associate Attorney to our team! Anne Adoryan is a Maryland-barred attorney with experience in family law, mediation, personal injury, worker’s compensation, legal research and writing and business law. She graduated from the University of Baltimore School of Law in December 2016, and will graduate with a Master’s Degree in Business Administration from the University of Baltimore in Spring 2017. While in law school, Anne served on the boards of several student organizations, including Students for Public Interest and the Business and Tax Law Association, as well as serving as President of OUT Law. Anne was a member of the Journal of International Law and a fellow in the MSBA Business Law Clerkship. She also worked as a research assistant for the Center for International and Comparative Law and as a Teaching Assistant for Introduction to Advocacy. Anne participated in the Bronfein Family Law Clinic as a Rule 16 Attorney, as Intern for the Honorable Michael J. Finifter, and as Law Clerk for the Alternative Dispute Resolution Division of the Court of Special Appeals. Anne has a passion for public interest work, and is a recipient of the Jessica Emerson Award for LGBTQ Advocacy. She has Bachelor’s degrees in English and economics from The Ohio State University. In her free time, Anne designs websites, enjoys cycling, sailing, reading and travel.

Last but not least, in our last Special Client Letter for September, we wrote about new FHA requirements that open condominium ownership up to more homebuyers. We have enclosed a copy of that letter for your reference when reviewing the update that appears below regarding FHA’s process for determining condominium eligibility.

On August 24, 2016, FHA published Mortgagee Letter 2016-13, wherein it advised FHA-participating lenders of its intention to extend the current process for approval of condominium projects until August 31, 2017. As you may recall, the current process was put into place in September 2012, pending revision of the rules governing FHA eligibility.

To the surprise of no one, work on the proposed rules continues, necessitating a further extension of the “temporary” process implemented four (4) years ago. Thus, to the extent that your community has considered applying for FHA certification, you can be assured that

the process for reviewing and approving your application is likely to remain unchanged at least through next Summer. We will continue to keep you advised of further developments on the FHA frontier. Meanwhile, if you have any questions regarding FHA’s review of condominium projects, please do not hesitate to contact us.




Craig B. Zaller

Managing Partner

Nagle & Zaller

September 2016 Updates

Sep 12

professional dad walking kid to daycare

September 1, 2016



Dear Board Members and Managers:


It’s back to school season, and I’m sure there are a lot of busy parents who are very happy to be sending their kids back to school. In any case, we have a few updates that we hope you will find very interesting and helpful.


For your review and information this month, please find enclosed a Special Client Letter regarding new FHA requirements that open condominium ownership up to more homebuyers. We have also included an update on the Elvaton case, in which the Court of Appeals has granted the Condominium’s Petition for Certiorari, indicating that it will review and decide the question of whether a condominium may suspend a unit owner’s right to use and enjoy the common elements as a consequence of becoming delinquent. Also enclosed is a flyer regarding Covenant & Rules Enforcement which I will be teaching for the Community Association Institute on September 24, 2016.


As always, should you have any questions or concerns, please do not hesitate to contact me or any of the other attorneys here at Nagle & Zaller.






Craig B. Zaller


Sep 12


September 1, 2016






In a rare, unanimous, and bipartisan vote of 427-0, the U.S. House of Representatives approved the Housing Opportunity through Modernization Act (“the Act”). On July 29, 2016, President Obama signed it into law. The Act requires the Federal Housing Administration (FHA) to ease up on burdensome restrictions on condominium associations, in hopes of increasing the number of communities eligible to sell to homebuyers who qualify for FHA-insured financing.

The FHA does not originate mortgage loans, but it insures them against default. An FHA-insured loan is a mortgage loan that meets all FHA credit and property standards, is originated by an FHA-approved lender, and is insured by FHA. Condominiums must be certified in order to participate in the FHA program. FHA condominium certification is the process of verifying that a condominium association meets all FHA legal, financial, operational and property requirements. A borrower may not use an FHA-insured mortgage to purchase a condominium unit unless the condominium association has been certified by FHA and the association is in full compliance with all FHA program requirements at the time of purchase.

FHA-insured loans have long been an attractive option for first-time homebuyers and seniors in need of reverse mortgages, because they offer low down payments, more favorable interest rates, and more leniency with regard to credit scores and debt-to-income ratios. Condominiums are often seen as an affordable option when looking to purchase a new home.

The Act directs the FHA to modify certification requirements, so that re-certification is “substantially less burdensome” than certification. The FHA may consider lengthening the time between re-certifications and require updates to information rather than resubmission. Once the process is simplified, more communities can get certified and stay certified, making it easier to sell existing properties to FHA qualified buyers.

The Act also reduces the minimum owner-occupancy ratio from 50% to 35%. The owner-occupancy ratio is the ratio of owners living in a community compared to the overall number of units. By lowering the ratio, a substantial number of developments previously disqualified due to having a greater proportion of rented units will be eligible to reenter the FHA program.

A high number of renters in a community has long been considered too risky for other homeowners, as renters are less likely to abide by the condo rules regarding noise and upkeep. However, the change increases the pool of eligible homebuyers by making it possible to sell properties to FHA qualified buyers. The alternative is often that the homeowners have to keep the property on the market longer or are forced to accept a lower offer from a smaller pool of homebuyers.

The Act directs the FHA to follow the lead of Fannie Mae and Freddie Mac, by allowing Associations to charge transfer fees. In the past, many communities were prevented from accepting FHA financing because they charged nominal transfer fees. These fees typically support association activities and benefit all residents of the community. This change has the potential to increase the number of communities eligible to participate in the FHA program, without having a significant effect on current homeowners.

Lastly, the Act eliminates a bright line rule limiting the ratio of commercial to residential units in a community. This change provides greater flexibility to mixed-use condominiums in areas where a higher ratio of commercial to residential property makes prudent economic sense. Urban communities that are more likely to have a high commercial to residential unit ratio than their suburban counterparts have the potential to benefit greatly from this change.

Tastes are also changing for many first time homebuyers. New homebuyers entering the housing market are looking for smaller, more eco-friendly housing, close to work, with flexible transportation options. The Act removes the bright line rule and directs the agency to look at the overall market in an area when considering the ratio of commercial to residential units in a community.

Time will tell whether the changes made possible by the Housing Opportunity through Modernization Act will be enough to revive FHA’s dampened condominium program. Speaking on behalf of the Community Association Institute in response to the passage of the Act, Dawn Bauman, Senior Vice President of Government Affairs, concluded “It’s time to roll up our sleeves and work in the same collaborative fashion that produced H.R. 3700 to ensure this law is fully implemented.”

If you are a member of a community association and would like to enroll or re-enroll your community in the FHA program under the new rules, the attorneys at Nagle & Zaller are prepared to assist you with that process.




Sep 12

condominiums at sunset

Maryland Court of Appeals Accepts Jurisdiction in Elvaton Case


September 1, 2016


As many of you are aware, on April 21, 2016, the Maryland Court of Special Appeals issued its unreported decision in the case of Elvaton Towne Condominium Regime II, Inc., et al. vs. Rose, et al., in which the judgment of the Circuit Court for Anne Arundel County was affirmed, holding that the condominium could not rely upon its rule making power to justify the suspension of unit owners’ rights to use and enjoy condominium common elements as a consequence of their failure to pay assessments. A subsequent motion to have the Court of Special Appeals’ opinion reported—which would have made that opinion binding upon courts throughout the State—was denied, prompting the condominium to file, with the Roses’ consent, a Petition for Certiorari with the Court of Appeals, seeking further review of the Court of Special Appeals’ decision.


The Court of Appeals, which is the State of Maryland’s highest court, rarely accepts jurisdiction over cases such as these, and then only on a discretionary basis, but we are pleased to report that the Court has granted the condominium’s Petition for Certiorari, signifying that it will consider and decide the issues presented by the parties in this case and publish what will be a binding opinion. It is our hope that the Court of Appeals’ opinion will resolve, once and for all, the question of whether and on what basis a condominium may suspend the rights of unit owners to use and enjoy common elements, thereby clarifying for condominiums and community associations throughout the State how to implement a practice widely viewed to be successful in collecting past due assessments.


According to the schedule dictated by the Court of Appeals, written briefs will be filed by the end of November 2016, and oral argument will be held sometime after January 1, 2017. We will keep you updated as the case progresses through the appeals process, and we enclose for your reference our prior Special Client Letter regarding this case, to refresh your memory regarding the issues to be decided. Meanwhile, if you have questions regarding the Elvaton case or its impact upon your community, please do not hesitate to contact one of the attorneys here at Nagle & Zaller.





Craig B. Zaller


Paralegal Additions to Staff @ Nagle & Zaller

Aug 12
people splashing in water during sunset

End of Summer meets New Horizons with New Paralegals @ Nagle & Zaller.

August 1, 2016


Dear Board Members and Managers:

Can you believe that in a few weeks summer will be coming to an end? It seems like we were just ushering in the hot weather and planning summer vacations.

We are excited to announce that we have added three additional paralegals to our staff: Spring Porter, Justin Gause, and Kimberly Chambers.

Spring Porter is the latest to join Nagle & Zaller, PC. She hails from New Jersey, but lived on the Fort Meade base when her mom served in the U.S. Navy. She is married and has a son, and in her downtime, she enjoys cooking, traveling, and taking care of her family. Spring has been a paralegal for almost four years. Her experience as a paralegal includes work for firms practicing bankruptcy, family law, and collections.

Justin Gause was born in Washington, D.C., raised in Baltimore County, has lived in Pittsburgh and New Carrollton, and is now happy to call Baltimore County home. He received his Master’s Degree in Legal and Ethical Studies from the University of Baltimore in 2011.  After graduating, he began working as a paralegal in 2012, and has been doing so since then.  Justin also pursues strong interests in music, film, and social justice. Justin has over five years of experience in various aspects of collections and foreclosure, most recently as a litigation paralegal at a busy local firm.

Last but not least, Kimberly Chambers joined Nagle and Zaller as a paralegal in April, bringing two years’ prior experience as a collections and foreclosure paralegal.  She received an honors degree from Salisbury University in history, with significant coursework in Spanish and French. She currently resides in Anne Arundel County, but is originally from Charles County. Kimberly enjoys spending her time off with her family, which includes her partner, daughter, and two chocolate labs. She also enjoys reading, watching Jeopardy, visiting amusement parks, and listening to educational podcasts.

For your review and information this month, please find enclosed a Special Client Letter regarding dispute resolution within your community.

As always, should you have any questions or concerns, please do not hesitate to contact me or any of the other attorneys here at Nagle & Zaller.


Nagle & Zaller



Jul 07
court house

Stay updated with Maryland Legislation with Nagle & Zaller Attorney at Law.

July 1, 2016


Maryland Legislative Update

For your information, the following legislative changes affecting community associations in Maryland were made by the General Assembly during the session that ended earlier this year.


Tax Sales – Assessments and Fees – (HB 970)


Whereas the law previously required those purchasers of tax sale certificates to notify only homeowners associations whose common area property had been sold at tax sale that the purchaser was intending to foreclose the right of redemption (i.e., to obtain a judgment entitling the purchaser to title free and clear of all liens), this bill now requires the tax sale purchaser to notify a condominium or homeowners association of any proceeding to foreclose the right of redemption involving any unit, lot or common property in the association. Furthermore, the tax sale purchaser who is successful in obtaining judgment granting title to the property will become liable to the community association for assessments as of the date of judgment, irrespective of whether a deed is recorded. This law is effective July 1, 2016.


Consumer Debt Collection – (SB 771 / HB 1491)


The legislature enacted comprehensive changes to the existing laws governing the collection of debts by third-party debt collectors. In addition to outlining the proof that needs to be furnished to the court to obtain judgment, the new law also makes clear that a debt that would otherwise be barred by the statute of limitations (usually three years, but possibly extended to twelve years if your governing documents were executed under seal) cannot be revived by a payment made voluntarily or by an agreement of the debtor to affirm the debt. Moreover, where it had been the burden of a defendant to plead the statute of limitations as an affirmative defense, the statute now shifts the burden to the creditor to establish that the debt is not time-barred. The new law will apply to all actions to collect a debt that are taken on or after October 1, 2016, but not to any actions taken or filed prior to that date.


Resale Certificates – (HB 1192 / SB 816)


Significant changes were made to the requirements that condominiums and homeowners associations provide resale certificates to owners selling their units or lots.


A condominium association is no longer required to state whether it is aware of any alteration or improvement to the unit or to its appurtenant limited common elements that violates any provision of the condominium’s governing documents. This change will do away with the implicit need for a condominium to conduct an inspection prior to issuing a resale certificate, which is often a burden for the board and management. Similarly, a condominium is now required to disclose only health or building code violations related to the common elements—not with respect to individual units—and then only those violations of which the condominium has actual knowledge. With respect to the condominium’s finances, the resale certificate must disclose: all assessments adopted by the council of unit owners, irrespective of whether they are due; a copy of the reserve study or summary thereof and the amount and status of the reserve fund; and, whether there are any unsatisfied judgments or pending lawsuits against the condominium (excluding ordinary lawsuits filed to recover unpaid assessments).


Other changes to the Condominium Act, which are mirrored in comparable changes to the Homeowners Association Act, include provisions that dictate the amount that a prospective seller can be charged when a resale certificate is requested. Under the law, as amended, the community association can charge no more than $250 to prepare the resale certificate. As before, the certificate must be prepared within 20 days of receipt of the owner’s request. Now, however, if the owner requires the certificate to be delivered in fourteen (14) days, a surcharge of no more than $50 can be added; and, if the request is for delivery within seven (7) days, the maximum additional surcharge is $100. Finally, the unit owner can be charged up to $100 to conduct any required inspection. The maximum fees dictated by the statute will be reviewed every two years, beginning in 2018, to verify that they are consistent with any increases in the consumer price index. The amended law governing resale certificates will take effect October 1, 2016.


Posting Voter Information in Public Areas – (HB 1127)


This law expands a requirement previously applicable only in Montgomery County to include Prince George’s County as well. The law applies to structures that limit direct access to individual units and requires that community associations designate a public area in which voter information can be distributed or deposited during the sixty (60) day period prior to any election. The materials must be available to residents for a period of not less than ten (10) days. The law will be effective in Prince George’s County on October 1, 2016, so it will be applicable to materials related to the upcoming general election in November.


Gambling / Games – (HB 127 / SB 311)


This law allows individuals at least 21 years of age to wager on certain games (mah jong and card games) against other individuals with whom they have a preexisting social relationship. The games may be played within any individual’s private home or in a residential common area; provided, however, that use of the common area is limited to persons at least 55 years of age. No fees can be charged to participants on a per seat basis or for food or drink, there can be no paid public advertising or promotions, no player may use an electronic device connected to the internet while playing, no one can benefit financially from the game other than as a player, and no more than $1,000 can be wagered by all players in the game during the same 24-hour period. This law will take effect on October 1, 2016.







February Newsletter

Feb 08


February 1, 2016

Dear Board Members and Managers:

The new year brought along with it an unwelcome guest, depending on who you ask. I’m sure that any child you asked was thrilled by the mini-vacation from school, while the rest of us were beginning to go stir crazy! In any event, we are excited for what the new year will bring for Nagle & Zaller. We have several new things in the pipeline that will help us better to serve the needs of our current clients and potential new clients. As we mentioned in a previous newsletter, we have grown exponentially over the last few years, having added paralegals , administrative staff and attorneys to ensure that our clients receive a customized experience catered to their community’s specific needs. With that being said, we are excited to welcome a new associate attorney to our team, Laura T. Curry, who will be the managing attorney overseeing our collections department.

Laura received her Bachelor’s Degree in Political Science from the College of the Holy Cross in Worcester, MA, and she attended law school at the University of Baltimore, graduating in 2009 with a both a Juris Doctorate and a Masters Degree in Public Administration. Laura previously worked as an associate in the Maryland office of a large, multi-state creditors’ rights firm, where her responsibilities included the defense of lenders in foreclosure cases throughout the state, including attendance at legally-mandated mediation intended to resolve the dispute between the parties outside of litigation. Laura was the managing attorney for several departments at her prior firm, so we are excited about the strong leadership and management skills she brings with her. Laura has practiced regularly in both the District and Circuit Courts of Maryland, and she has argued cases on appeal before the Maryland Court of Special Appeals. Laura lives in Catonsville, Maryland with her husband and daughter, and she enjoys spending time with her family and traveling.

Enclosed please find a Special Client Letter for your review regarding new laws that affect common ownership communities located in both Montgomery County and Prince George’s County, which was written by Gregory T. Fox, Esq. Regardless of where you live, we hope that you will find this letter interesting and informative.

As always, should you have any questions or concerns, please do not hesitate to contact me or any of the other attorneys here at Nagle & Zaller.


Craig B. Zaller


Special Client Letter

February 10, 2016

New Laws Affecting Board Member Training & Dispute Resolution in Prince George’s County and Montgomery County

As we enter the new year, we see new laws being passed at the local level that will affect our Prince George’s County and Montgomery County clients.

Prince George’s County Updates

Recently, the Prince George’s County Council voted unanimously to adopt CB-49-2015, CB 50-2015, and CB-58-2015, a trio of new bills affecting common ownership communities located in Prince George’s County, which will become effective February 1, 2016. Through this legislation, Prince George’s County has established a Commission on Common Ownership Communities (PGCCOC) that will be composed of nine (9) members appointed by the County Executive. Five (5) of the members will be selected from unit or lot owners who reside in a common ownership community, and four (4) of the members will be selected from professionals associated with common ownership communities, such as property managers and attorneys. The PGCCOC will, among other things, provide alternative dispute resolution for communities that are involved in disputes with individual owners if the dispute resolution mechanism already in place within the association has been exhausted without success. In that case, a homeowner may elect to have the dispute heard by the PGCCOC. Though the actual language of the statute is somewhat unclear, it is our opinion that it is reasonable to interpret it as permitting the homeowner to file a complaint with the PGCCOC within thirty (30) days after the community renders its final decision. If a complaint is filed with the PGCCOC, the community is prevented from implementing any action to enforce its decision until the PGCCOC has held a hearing and rendered its own decision, which will be issued within sixty (60) days after the hearing. Even if the homeowner does not file a claim with the PGCCOC, the community cannot implement any action until the expiration of the thirty (30) day filing period. The new law applies only to certain disputes involving the rights and responsibilities of the governing body of the community and owners, respectively, such as the enforcement of provisions of a community’s Declaration and Bylaws, The law does not apply, however, to disputes concerning the collection of an assessment validly levied against an owner.

The new Prince George’s County law also requires that every common ownership community within the County register with the Office of Community Relations by December 31st of each year, identifying at that time, among other things, the association’s appointed officers, budget information, contact information, and the community’s grievance procedure. If the community fails to register, the community will be deemed to have committed a civil violation and be subject to serious ramifications, such as a temporary suspension of the community’s registration status, as well as the suspension of the association’s right to file legal actions in Prince George’s County. Though the statute does not provide information on how communities should register, we expect that information to be forthcoming soon from the County’s Office of Community Relations. Finally, the new law allows Prince George’s County to impose a fee to be paid by members of common ownership communities in order to finance the operations of the PGCCOC. Unfortunately, there is no indication of what the fee will be, but we will continue to monitor the changes in the law and update you as we learn more.

Montgomery County Updates

As our Montgomery County clients may recall from our April 1, 2015 newsletter, the Montgomery County Council recently passed Montgomery County Bill 45-14, which affects all community associations within Montgomery County, excluding the City of Gaithersburg. The new law mandates that all members elected or reelected to a community association’s board of directors after January 1, 2016 complete a free, online training program within ninety (90) days of their election or reelection. The training course is based on both Montgomery County and Maryland laws, and includes information related to best practices for association management, operation and governance. The training is estimated to take approximately two (2) hours to complete, and, upon successful completion of the training, the Board member will receive an online certificate of completion, which must be provided to the association’s management agent or other person charged with maintaining the association’s records. A copy of the same certificate must also be furnished to the Montgomery County CCOC to verify completion of the required course. The link for the online training can be found here:

Finally, a reminder to our Montgomery County clients that Montgomery County Bill 17-15, a bill aimed at eliminating predatory towing practices, took effect on November 30, 2015. With limited exceptions, community associations must expressly authorize in writing each individual tow from an association’s parking lot. The exceptions are: (1) the towing of vehicles between 2:00 a.m. and 9 a.m.; and, (2) the towing of vehicles blocking either fire lanes or access to property or a building on the property. Under either of those circumstances, express authorization would NOT be required. Otherwise, prior to authorizing the tow, the association must obtain photographic evidence of the violation.   Additionally, the law mandates that tow signs summarizing all parking restrictions must be posted permanently, so that at least one sign is clearly readable from each parking area and each vehicle entrance to the property. For parking lots with more than forty-five (45) spaces, at least one (1) sign must be posted in a conspicuous place for each 45 spaces. Accordingly, we recommend that associations located in Montgomery County adopt a Towing Resolution that tracks the new law, which will give Board members, Management, and Unit Owners clear direction regarding the association’s towing. Please contact us should you need our assistance in drafting or reviewing such a Resolution for you.

We are happy to guide our clients through the understanding of any of the aforementioned new laws. Should you have any questions or would like to discuss how these laws will affect your community, please do not hesitate to contact us.


Does the Maryland Condominium Act allow someone to enter my unit without my permission?

Jan 21
a row of condominiums

Under certain circumstances, your condominium association may enter your residence without notice. Call us if you have questions about when this is acceptable.

Homeowners typically expect to have total privacy within their homes and not have anyone entering without warning. Fortunately, in most cases this is what you get. However, when you live in a common ownership community, certain rules apply to keep all of the residents safe and comfortable, as well as to uphold the condominium association’s governing documents. According to Maryland law, your condominium association may, under certain circumstances, enter your residence without warning or permission.

Does this mean that someone can just go into your unit at any time? Of course not. Maryland law is set up to protect the homeowner, as well as the Condominium. However, let’s say you were out of town for the weekend and a pipe in your bathroom sprung a leak that began to seep through the floor and into the residence of your neighbor below. Property management would be within their rights to enter your unit and fix the problem on an emergency basis, since it affects other residents and the integrity of the building. It also goes without saying that if there were a gas leak or other serious safety hazard, personnel would be able to enter to address the issue immediately without notice to you.

The Condominium also has the right to enter and inspect your unit in non-emergency situations. In those instances, they are required to give you advance notice. How much? That depends upon your community’s governing documents and what is reasonable under the circumstances. For questions related to when it is appropriate to enter a unit, contact your association attorney.