2018 Maryland Legislative Updates
By: Anthony Clark, Esq.
Below we have outlined the substantive legislative actions taken by the Maryland General Assembly over the course of the most recent legislative session. We have included legislation that impacts both homeowners and condominium associations for a comprehensive view of the laws affecting community associations in Maryland generally.
Claims Against Developers and Vendors - Unenforceability of Certain Provisions
This law makes unenforceable any provision of a declaration, a bylaw, a contract for the initial sale of a unit, or any other instrument made by a developer or vendor if that provision:
(i) shortens the statute of limitations applicable to the claim;
(ii) waives the application of the discovery rule or other accrual date applicable to a claim;
(iii) requires a unit owner or the council of unit owners to assert a claim subject to arbitration within a period of time that is shorter than the statute of limitations applicable to the claim; or
(iv) operates to prevent a unit owner or the council of unit owners from filing a lawsuit, initiating arbitration proceedings for a claim subject to arbitration, or otherwise asserting a claim within the statute of limitations applicable to the claim.
The above applies only to a provision relating to any right of a unit owner or council of unit owners to bring a claim under applicable law alleging the failure to comply with: (i) applicable building codes; (ii) plans and specifications approved by a county or municipality; (iii) manufacturer's installation instructions; or (iv) warranty provisions. This law applies prospectively upon its effective date of October 1, 2018. Moving forward, new associations will face fewer hurdles in the process of making a claim against the developer or vendor for warranty and construction defect claims.
Foreclosed Property Registry - Updated Information - Notice to Local Governments
This statute requires the State Department of Labor, Licensing, and Regulation (DLLR) to establish procedures that require a foreclosure purchaser to submit to the Foreclosed Property Registry any change to certain information within 21 days after the change is known to the purchaser. It also requires DLLR to notify, by electronic means, on receipt of an initial registration or any change to certain information, authorized users from the county and the municipal corporation in which the property is located. After taking effect on January 1, 2019, this law will assist community associations in preventing maintenance and other issues such as squatting associated with vacant properties.
Prince George's County - Sales of Residential Real Property - Community
This statute affects the sales of residential real property in a community development in Prince George's County by requiring that a contract of sale must include a disclosure statement that identifies the community amenity and specifies when the community amenity will be completed in accordance with a recreational facilities agreement recorded with the Prince George's County Planning Department. Community amenity includes: (i) country club; (ii) a golf course; (iii) a health club; (iv) a park; (v) a swimming pool; (vi) a tennis court; and (vii) a walking trail. Beginning October 1, 2018, this information must be displayed in the community development's sales or management office to any prospective purchasers. This is a consumer friendly law that provides prospective purchasers of property in a community association additional information.
Condominiums - Suspension of Use of Common Elements
Here, the legislature has added additional notice requirements when an association is looking to restrict access to common areas as a result of a delinquency in the payment of assessments. If a declaration includes such a provision, this new law notes that the declaration shall also state that a suspension of the use of common elements may not be implemented until an association: (i) mails to the unit owner a demand letter specifying a time period of at least 10 days within which the unit owner may pay the delinquent assessment or request a hearing to contest the suspension; and (ii) if a unit owner requests a hearing to contest a suspension, provides notice and holds a hearing in accordance with § 11–113(b)(2) and (3) of the Maryland Condominium Act. Notably, an association may 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. The Condominium Act provides that a declaration may be otherwise amended only with the written consent of 80 percent of the unit owners listed on the current roster.
Real Property - Homeowners Associations - Number of Declarant Votes
This law takes effect on July 1, 2018, and provides that a declarant of a homeowners association, until the time all lots in a homeowners association have been subdivided and recorded in the land records of the county in which the homeowners association is located, the declarant, when voting on a homeowners association matter, shall have a number of votes that is equal to the number of lots that: (i) have been subdivided and recorded in the land records of the county in which the homeowners association is located; and (ii) have not been sold to members of the public.
Courts - Consumer Debt Collection Actions - Statute of Limitations
This law clarifies that any payment toward, written or oral affirmation of, or any other activity on a certain debt that occurs after the expiration of the statute of limitations applicable to the consumer debt collection action does not revive or extend the limitations period and providing that a certain provision of law may not be interpreted to affect the statute of limitations applicable to a cause of action arising from a certain agreement or payment plan entered into before the expiration of a certain statute of limitations. This is important to note for all community associations in their attempts to collect outstanding debt from owners beyond the three year statutory period.
Real Property - Deletion of Ownership Restrictions Based on Race, Religious Belief, or National Origin
This bill affirmatively authorizes an association to execute and record a restrictive covenant modification 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 without approval from lot owners in the association. Notably, the law also provides that beginning October 1, 2019, within 180 days after receiving a written request from a lot owner, the governing body of a homeowners association shall delete a 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.
Real Property - New Home Sales - Information on Energy-Efficient Options takes effect on 10/1/2018
Beginning October 1, 2018, this law requires that in a development with 11 or more homes to be built by the same builder, a home builder is to provide a purchaser with written information on energy-efficient options, including a statement that tax credits may be available related to the energy-efficient options, available for installation in a new home, and that a contract for the initial sale of a new home must contain a certain acknowledgment that the purchaser was provided with certain information about energy-efficient options for the home.
Proposed Legislation that DID NOT Pass
Some noteworthy legislation which did not pass include: reserved spaces for electric charging vehicles; a state licensing system for community managers; mandatory correct of certain drainage defects by home builders; and appointment of unit owners to condominium boards of directors by developer at certain thresholds during the development period.