Maryland Legislative Updates 2017
The 2017 legislative session for the State of Maryland was very active. The General Assembly considered many bills that impact homeowners associations and condominiums. Specifically, the bills considered touched on community governance, foreclosure proceedings, regulations and licensure of community managers and registering community associations with the State. While many new laws will take effect this year on October 1, 2017, several of these bills failed, but may be considered during future legislative sessions. Below, I will recap each law that we believe may impact your community.
Vote Requirement to Amend Governing Documents
The General Assembly passed legislation which allows community associations to pass amendments, as follows:
Homeowners Associations: Amendment to the Declaration or Bylaws can be achieved with a vote of 60% of the members in good standing, or such lesser amount if a lesser amount is set forth in the governing document at issue.
Condominiums: Amendment to the Bylaws only can be achieved with a vote of 60% of the members in good standing, or such lesser amount if a lesser amount is set forth in the Bylaws. Amendments to the Declaration must still follow the vote requirements contained in that document.
The statute further defined “good standing” as a member who is not more than 90 days past due in the payment of assessments or other community related charges.
Sales of Common Elements and Common Areas
The Governing Body of a condominium or homeowners association, or, if before transition takes place, a developer, must give notice of the any impending sale of common property not less than 30 days before such sale, including any tax sale. Notice can be given by sending written notice to each owner of record, or by posting a sign on the property to be sold in the same manner as required for a zoning modification.
Homeowners Association Resale Fee
A resale fee of only $50.00 may be charged for inspecting a home in connection with the issuance of a resale certificate, only if such fee is authorized by the association’s governing documents. This bill was amended down from $100.00 without such authorization having to appear in the documents before being passed. This only applies to homeowners associations. The condominium act remains unchanged.
Expedited Foreclosure of Vacant and Abandoned Property
This law redefines the requirements to earn expedited status to foreclose upon a vacant and abandoned property.
Notice of Lender Foreclosure Sales
Notice must be sent to a condominium or homeowners association if a lender postpones or cancels a foreclosure sale of a property that has a lien attached at least 30 days before the sale date. The law is intended to give community associations notice so that they can pursue the collection of delinquent accounts more diligently.
Notice must further be provided to the owner so that they are aware of the continuing obligation to pay assessments.
A separate law was also passed which requires the lender to notify the Maryland Department of Labor, Licensing and Regulation of pending foreclosures within seven (7) days of the foreclosure proceeding being filed with the court.
Laws that did not pass, but may be considered in the future, include:
1) Registration of all condominiums, homeowners associations and cooperatives with the State of Maryland.
2) Licensing of community association managers. Specific training and testing would be required to show proficiency in common association management.
3) Prohibitions of certain provisions in condominium documents that would limit enforcement of developer construction warranties. Passed the House, did not get out of Senate committee.
4) Invalidation of restrictions on electric charging stations and backyard gardens.
5) Allowing community associations and landlords to include restrictions on the use of tobacco products in areas owned by the association and in multi-dwelling buildings and units.
6) Requirement of reserve studies every 5 years.