Suspension of Community Privileges: Maryland

Date: April 8, 2014

A community association's ability to suspend an owner's voting privileges and community privileges, such as parking, pool, and/or fitness center access, is a powerful tool associations can use in getting the attention of owners who are in violation of association governing documents.  This tool is typically used when an owner is delinquent in paying his or her assessments and can serve as a deterrent for non-payment as well as an effective means of assessment collection.  It is important to note, however, that before an association can proceed with suspending an owner's voting and/or community privileges, it must carefully review its Declaration, Bylaws, and applicable statutory codes in order to determine whether it has the requisite authority to suspend such privileges, and if so, what procedures must be followed.

In Maryland, similar to Virginia, the issue of whether an association has the authority to suspend an owner's privileges is controlled largely by the association's governing documents and state statues regulating community associations. In the case of both condominium and homeowners associations, boards should carefully review their Declaration and Bylaws prior to suspending an owner's privileges. If the governing documents contain language that expressly outlines an association's authority to suspend privileges, then an association has a strong legal foundation for taking such action in the event the governing documents are violated (subject to the due process considerations discussed below). It is always preferable from a legal standpoint to have a specified sanctioning authority in the Declaration or Bylaws. However, many Maryland community associations do not contain specific language of this nature. Fortunately, even if the governing documents are silent or vague with respect to this issue, an association can generally still adopt rules and regulations that specify the privileges which may be suspended in the event of a violation of the governing documents.

Proper due process procedures should be incorporated into any adopted rules governing the suspension of privileges. Maryland condominium associations need to cautiously follow the requirements of Section 11-113 of the Maryland Condominium Act prior to imposing any sanction (including fines and the suspension of privileges) for violations of the governing documents. This Section of the Act requires that a series of notices be sent and a hearing be held prior to the imposition of any sanction. If procedures regarding enforcement do not already exist in the Bylaws, condominium associations should carefully craft due process procedures that comply with the requirements of the Act. Rules regarding suspension of privileges can be integrated into the enforcement procedures. Notably, the Maryland Condominium Act places the burden on the association to notify an owner of a violation and hold a hearing prior to imposing any sanction. We point this out because the Maryland Homeowners Association Act does not contain a similar requirement.

The issue of suspension of privileges in the framework of a Maryland homeowners association is entirely controlled by an association's Declaration and Bylaws. Many associations already have enforcement procedures outlined in their Declaration. However, for those that do not, we do recommend that a due process policy be adopted in the interests of ensuring proper notification of infractions and enforcement. Once again, just as in condominium associations, rules regarding suspension of privileges can be incorporated into adopted enforcement procedures. Our recommendations stem from our experience that courts generally like to see that a homeowner has been given notice and an opportunity to be heard on any alleged violation. The process of sanctioning an owner through a loss of privileges can be abbreviated in homeowners associations because the Homeowners Association Act does not impose the same burden as the Condominium Act. Therefore, homeowner associations can structure their due process procedures differently than condominiums. As an example, an association could place the burden on a homeowner to request a hearing after a violation has been found.

In the context of assessment collection, both condominium and homeowners associations can incorporate provisions regarding the suspension of privileges into their existing collection policy. If an owner becomes delinquent, an association can suspend privileges as outlined in the due process procedures set forth in the collection policy.

One final point to mention is that any of the above referenced policies and procedures should be adopted in accordance with state statues and/or an association's governing documents. In the case of a condominium association, policies should be adopted in accordance with Section 11-111 of the Maryland Condominium Act. In essence, this Section provides that notice of proposed rules must be circulated to the membership for review and comment prior to adoption by the board. By following this adoption process, the board can ensure that the community is properly informed and aware of the policy. Even though the Maryland Homeowners Association Act does not contain a similar rule adoption provision, we recommend that homeowners association follow a similar process in the interest of certifying proper notification.