SPECIAL CLIENT LETTER
May 1, 2018
MARYLAND LEGISLATIVE UPDATE 2018
Craig B. Zaller, Esq.
The 2018 legislative session for the State of Maryland was very active. The General Assembly considered many bills that impact community associations. Below, is a recap of each law that we believe may impact your community. And, I have also noted a few proposed laws that did not pass but which may be considered in the future.
A Condominium's Right to Suspend the Use of Common Elements
The General Assembly passed legislation which makes the effect of the Elvaton Towne Condominium Regime II, Inc. v. Rose matter less constraining for condominiums. Elvaton is the case in which the Court of Appeals ruled that a Condominium does not have the right to revoke parking or other privileges for the non-payment of assessments unless there is a provision specifically authorizing the same in the Condominium's Declaration. Despite that most condominium's documents and Section 11-103 of the Condominium Act require an 80% vote to amend a Declaration, the new statute permits a condominium to amend its Declaration for this issue alone by a vote of 60% of the total eligible voters. Further, said Amendment must provide for notice, and a hearing pursuant to Section 11-113 of the Condominium Act, but only if an alleged delinquent owner requests a hearing, before the condominium may revoke common element privileges. This law becomes effective on October 1, 2018.
Since we have already been asked by many clients to amend their declarations, we are offering to amend a community's declaration to provide the right to revoke privileges for non-payment for a set flat fee. That fee will include a review of your community's documents regarding this issue, a letter to the board explaining the amendment and the procedures to amend, the actual amendment, a letter to the owners encouraging them to vote in favor of the amendment, and a voting form. Attendance at a special meeting upon which the vote will be held and/or amendments on any other topics beyond the right to suspend privileges would be billed separately. The flat fee for amending a community's declaration) is $1,250.00 for non-retainer clients and $1,000.00 for retainer clients. This includes all clients, not just condominiums.
Many clients are also amending their governing documents on other issues while they are addressing the right to revoke privileges since they must obtain the vote of the owners already. As many of you know, we have worked with hundreds of Boards on "spot amendments" on topics such as fining, enforcement, post judgement legal fees, HO-6 insurance mandates and the like. We have also worked with other communities to completely amend and restate their declaration and bylaws. If you are interested in having one of the attorneys at Nagle & Zaller, P.C. talk to you about "spot amendments" or completely amending your community's governing documents, please contact us.
Condominium Claims against Developers
The General Assembly passed legislation which renders certain provisions in a condominium's governing documents limiting the rights of the condominium and/or the unit owners to bring claims against the developer unenforceable. This legislation is only applicable to condominiums created on or after the effective date of this law, October 1, 2018.
Homeowner Associations - Developer Votes
The General Assembly passed legislation which clarifies that a developer is only entitled to cast the number of votes equal to the number of subdivided lots that have not been sold to the public on any homeowner association matter. This law becomes effective July 1, 2018 and affects new and existing homeowner association.
Homeowner Associations - Deletion of Discriminatory Restrictions
The General Assembly passed legislation which empowers homeowner associations by and through its board of directors and without a vote of the homeowners, to proactively remove covenants which contain restrictions based upon race, religion, and national origin. This law become effective October 1, 2018.
Laws that did not pass, but may be considered in the future, include:
1) Licensing of community association managers. Specific training and testing would be required to show proficiency in common association management.
2) Installation and use of electric vehicle recharging equipment.
3) Requirement of reserve studies every 5 years.
4) Amending the Dispute Resolution Procedures set forth in Section 11-113 of the Condominium Act and providing for the same for Homeowner Associations and Co-Operatives.
5) Clarifications regarding voting on amendments.