|
Maryland Governor Martin O'Malley signs a new law regarding assessment liens as Thomas C. Schild and others look on, April 24, 2008. |
LAWS REGULATING COMMUNITY ASSOCIATIONS printer-friendly version
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
.
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 LEGISLATIVE UPDATE
In 2008, the Maryland General Assembly enacted several new laws which affect condominiums and homeowners associations.
Among the new laws enacted is a bill to increase the amount of the condominium insurance deductible which can be shifted to individual unit owners by a condominium’s bylaws. The increase from $1,000 to $5,000 reflects the current minimum insurance deductible typically available in condominium master insurance policies.
The time for enforcing condominium/homeowners association assessment liens by foreclosure has been increased from 3 years to 12 years to correspond to the duration of court judgment. This will aid collection of assessments on sale or re-finance since some title companies have not been requiring payment of assessment liens which could no longer be foreclosed after 3 years.
Also enacted was a law to clarify and expand the prohibition on restrictions on the installation of solar collector systems on the roof or exterior walls of dwelling units.
These new laws take effect October 1, 2008. See Maryland General Assembly website for more information.
The new foreclosure law was enacted as emergency legislation and became effective April 4, 2008.
A state Task Force on Common Ownership Communities issued its report to the Governor and General Assembly in December 2006 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;
See the Maryland Task Force on Common Ownership Communities - Final Report 12/31/06Bills to implement some of these recommendations were considered by the Maryland General Assembly in 2007 and 2008.
NEW MARYLAND LAWS IMPACT COMMUNITY ASSOCIATIONS
In recent years, the Maryland General Assembly has passed several new laws which directly impact community associations.
Assessment Liens (2008)
The time for enforcing condominium/homeowner association assessment liens by foreclosure has been increased from 3 years to 12 years to correspond to the duration of a court judgment. This new law will aid collection of assessments when there is a sale or re-finance of a property since some title companies have not been requiring payment of assessment liens which cannot be foreclosed after 3 years.
Condominium Insurance Deductible (2008)
The amount of the condominium insurance deductible which can be shifted to individual unit owners by a condominium’s bylaws has been increased from $1,000 to $5,000. This increase reflects the current minimum insurance deductible typically available in condominium master insurance policies.
Solar Collector Restrictions (2008)
The law regarding restrictions on solar collection panels has been clarified and expanded to provide associations regarding land use may not impose unreasonable limitations on the installation of solar collector systems installed on a roof or exterior wall of a building where the property owner owns or has a right of exclusive use of the roof or exterior walls.
Foreclosure Procedures (2008)
The laws governing foreclosure of residential property have been significantly changed to require additional pre-sale notice. Under the new law, a notice of intent to foreclose must be sent prior to filing a foreclosure suit. And, a foreclosure suit must be served on a homeowner before a foreclosure sale can occur.
Enforcement of Homeowner Association Act (2007)
Among the new laws enacted was a bill to authorize the Maryland Attorney General's Consumer Protection Division to enforce provisions of the Maryland Homeowners Association Act which affect consumers. This enforcement authority is similar to existing authority for the Attorney General to enforce provisions of the Maryland Condominium Act which affect consumers.
Court Appointed Receiver (2007)
Where owners of a condominium or homeowner association fail to establish a board of directors with enough members to constitute a quorum under the association bylaws, a court may appoint a receiver to conduct the affairs of the association.
The receiver would have the powers and duties of a duly constituted board of directors and would be empowered to act for the association until the vacancies on the board are filled to establish a quorum of directors.
Condominium Conversion Procedures (2006 and 2007)
In response to the surge in conversion of residential apartments to condominiums, the Maryland Condominium Act was amended to provide greater protection for certain tenants.
Under the new law, mentally disabled individuals are included among those entitled to a 3-year extended lease. And, counties and municipalities are allowed greater flexibility in setting income eligibility standards for qualifying for a 3-year extended lease.
The procedures regarding condominium conversion notice and tenant purchase offers were also modified.
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
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
Back to:
Laws Intro/Legislation/Law Links
Keep current on new legislation and laws by adding the Thomas Schild Law Group web site to your Favorites or Bookmarks list.
401 NORTH WASHINGTON STREET