Prince George's County Council Recently Adopts New Legislation Establishing a Commission on Common Ownership Communities

Date: March 14, 2016

The Prince George’s County Council recently adopted new legislation that establishes a Commission on Common Ownership Communities (the “PGCCOC”).  The Commission 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, realtors and attorneys.  In many ways, the PGCCOC mirrors the commission established in Montgomery County that has regulated common interest communities in that county for years.

The Prince Georges legislation became effective February 1, 2016, but its implementation has been delayed.  The new law requires every common ownership community within the County register with the Office of Community Relations by December 31st of each year.  The legislation permits the County to impose a registration fee to be paid by all Associations in order to fund the administrative operations and dispute resolution services the PGCCOC may offer.  However, the County is still determining the appropriate amount of the registration fee.  Information on the registration procedure has not yet been provided but it should be forthcoming from the County’s Office of Community Relations. 

The registration shall identify, among other things, the Association’s officers, fidelity insurance information, current reserve balances, and budget information.  The grievance procedure for each community will also need to be disclosed.  Failure to comply with the registration requirements may result in the suspension of the Association’s registration status and its ability to file a legal action in the County. 

An interesting aspect of the legislation is the development of an alternative dispute resolution program.  It’s intended to allow the PGCCOC to attempt to resolve disputes between members and their associations.  However, participation is mandatory for all parties before either party may petition a Maryland court for resolution of the matter.  This provision is unique to the PGCCOC and it appears to delay the parties the right of access to the court system.  Another negative side effect to this provision is that it may allow a party to take advantage of inherent delays in dispute resolution proceedings in order to delay complying with Association governing documents.  Representatives from the Washington D.C. Metro Chapter of the Community Associations Institute are attempting to resolve this aspect of the legislation with the Prince Georges County Council.   

The new legislation further requires parties to exhaust all dispute resolution mechanisms in place by an Association before petitioning the PGCCOC to hear a dispute.  Complaints to the PGCCOC must be filed within thirty (30) days of exhaustion of the Association’s dispute resolution procedure. Even if the owner does not file a claim with the PGCCOC, the Association cannot implement any action permitted under its governing documents until the expiration of the thirty (30) day filing period. The dispute resolution applies only to disputes surrounding an Association’s breach of its governing documents or its enforcement procedures against owners; it is not intended to apply toward assessment collection disputes.

If a complaint is filed with the PGCCOC, a qualified dispute resolution specialist shall meet with the parties within thirty (30) days of the complaint filing.  Meanwhile, an Association may not implement any action to enforce its governing documents until the PGCCOC has held its hearing and rendered its own decision.  “Written decisions” are expected to be issued within sixty (60) days after the hearing, but the legislation is unclear on whether the decision is binding upon the parties.  The legislation is also unclear on the role of the dispute resolution specialist in resolving the matter, specifically, whether the specialist shall act as an arbitrator and has authority to force a resolution of a dispute or whether he should act as a mediator to assist the parties in voluntarily resolving their dispute.  If the specialist is expected to act as an arbitrator, the legislation will need to provide procedures to be followed at arbitration that preserves each party’s due process rights. If the specialist is expected to mediate the parties’ dispute, then the legislation will need to clarify that he or she attempts to reach a voluntary settlement between the parties.  Efforts are underway to clarify this aspect of the legislation with the Prince Georges County Council. 

Our office will continue to monitor the implementation of this legislation and will provide updates on any amendments that may be enacted.