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Maryland Governor Robert L. Ehrlich, Jr. signs a new law regarding owner access to association records as Thomas C. Schild and others look on, May 12, 2004. |
LAWS REGULATING COMMUNITY ASSOCIATIONS
The Law and Legislation portion of the Thomas Schild Law Group Web Site highlights laws and proposed legislation which impact community associations.
Community associations are governed by local, state and federal law. Local laws which affect associations include towing and zoning ordinances. State statutes regulate association governance and procedures.
Federal laws affecting community associations include laws concerning bankruptcy, collection procedures, fair housing, taxation, employment, telecommunications, and the environment.
Additionally, new laws are often proposed but not enacted.
Maryland Laws
Maryland laws concerning community associations include the Maryland Condominium Act, Maryland Homeowners Association Act, Maryland Cooperative Housing Act, and the Maryland Contract Lien Act. The general Maryland real property and corporate laws also affect community associations.
In addition, some counties and municipalities have enacted local laws which regulate community association activities
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District of Columbia Laws
The District of Columbia Condominium Act governs condominiums in the District of Columbia. Cooperatives are regulated by the District of Columbia Cooperative Housing Act. The general corporate and real property laws of the District of Columbia also apply.
Federal Laws
Community associations are also affected by a variety of federal laws including the Fair Housing Act, the Americans with Disabilities Act, the Telecommunications Act, the United States Bankruptcy Code, the Internal Revenue Code, the Fair Debt Collection Practices Act, and employment discrimination and job safety laws.
For more information concerning these federal laws, click here.
Federal agencies responsible for administering and enforcing these laws include the Department of Justice, Department of Housing and Urban Development, Department of Labor, Internal Revenue Service, Equal Employment Opportunity Commission, and Federal Communications Commission.
These agencies issue federal regulations which clarify and implement federal laws.
Click here for more information concerning federal regulations.
NEW LAWS AND LEGISLATION
Maryland Task Force on Common Ownership Communities
Legislation was adopted in 2005 to establish a state Task Force on Common Ownership Communities to study various issues regarding a community associations . The Task Force is to study and report to the Governor and General Assembly regarding:
- the education and training needs of common ownership community boards and owners;
- alternative dispute resolution services for common ownership communities;
- the desirability of adopting provisions of the Uniform Common Interest Ownership Act;
- issues facing aging communities;
- issues relating to the collection of assessments;
- issues relating to the resale of homes and common ownership;
The Task Force report is to be completed by December 31, 2006.
NEW MARYLAND LAWS IMPACT COMMUNITY ASSOCIATIONS
In recent year, the Maryland General Assembly has passed several new laws which directly impact community associations.
Owner Access to Books and Records (2004)
One new Maryland law establishes uniform standards for condominiums, homeowners associations, and housing cooperatives for making association books and records available for inspection and copying by owners. Previously, the availability of such records varied depending on the type of community association.
The new law requires disclosure of all books and records except to the extent they concern personnel records; an individual's medical records; an individual's financial records; records relating to business transactions that are currently in negotiation; the written advice of legal counsel; or minutes of a closed meeting of the board of directors or other governing body.
This new books and records disclosure law follows the existing law for homeowners associations with the additional exception for minutes of closed meetings.
Electronic Notice and Voting (2004)
The Maryland General Assembly also passed a new law which permits condominiums, homeowners associations, and housing cooperatives to provide meeting notices and deliver information to owners by electronic transmission where certain conditions are met. Such transmissions must be capable of creating a record which may be retained, retrieved, reviewed and reproduced in paper format by the recipient.
Display of United States Flag (2004)
Another new law preempts association prohibitions on display of the United States flag. An association may not prohibit or unduly restrict the display of one portable, removable United States flag. However, an association may still adopt reasonable rules regarding the placement and manner of display of flags and flagpoles.
Montgomery County Storm Water Management
Montgomery County, Maryland is now implementing a new law that will offer homeowner associations the opportunity to reduce their responsibilities for maintenance of stormwater management facilities. An association can turn well-functioning stormwater management facilities over to the County for structural maintenance. And, an association can borrow money to bring sub-standard facilities into a condition where they can be turned over to the County.
The actual transfer of maintenance responsibility for storm water facilities will be accomplished through recorded easements and covenants with Montgomery County.
FEDERAL LEGISLATIVE UPDATE
A new federal flag law was signed into law in late July, 2006.
Aimed specifically at condominiums, homeowners associations, and housing cooperatives, the Freedom to Display the American Flag Act prohibits an association from restricting or preventing a member of an association from displaying the flag of the United States on the member's residential property or exclusive use area.
However, community associations may establish reasonable restrictions pertaining to the "time, place, and manner of displaying the United States flag" where such restrictions are "necessary to protect a substantial interest" of the association. Additionally, flags must be displayed in a manner consistent with the United States Flag Code and any rule or custom pertaining to proper display or use of the American flag.
Prevention of Bankruptcy Abuse
The new bankruptcy law makes it more difficult for individuals to eliminate personal obligations to pay debts through a chapter 7 bankruptcy. By establishing an income/expense-based "means" test, fewer people will qualify to file a chapter 7 bankruptcy and will only be eligible for a chapter 13 bankruptcy. In a chapter 13 bankruptcy, all or part of the debt is typically repaid in 3 to 5 years.
The 2005 Bankruptcy Act also increases the amounts debtors pay in a chapter 13 bankruptcy so associations will receive more of the pre-bankruptcy assessments than in the past.
LAW LINKS
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