New Laws
Key Updates for Condos, HOAs & Co-Ops
Starting October 1, 2024, seven legislative bills changed Maryland Community Association Law for condominiums (“condos”), homeowners associations (“HOAs”) and cooperative housing corporations (“Co-ops”). Here’s a summary of these bills:
- Fewer Unit Owners Needed to Amend Condo Docs (SB 665/HB 1496)
- Condo Associations Not Required to Insure Units in Certain Condos (SB 1015 / HB 1227)
- New Asbestos Disclosure Requirement in Condo Sales (SB 46 / HB 143)
- New Electric Vehicle Recharging Laws (SB 465/HB 159)
- Expanded Authority for Condos to enter into Clean Energy Leases (HB 216/SB 206)
- Funding Assistance for Condo / HOA Infrastructure Replacement (SB 446 / HB 280)
- New Rule Violation Dispute Procedures for Co-ops (SB 015 / HB 309)
“SB” and “HB” refer to Senate Bill and House Bill, respectively. Legislators introduced these bills in the 2024 Regular Legislative Session of the Maryland General Assembly, and the Governor has approved them. Now, the bills are part of the Maryland Condominium Act (“MD Condo Act”), Maryland Homeowners Association Act (“MD HOA Act”), and Maryland Cooperative Housing Corporation Act (“MD Co-Op Act”). Details on these new laws are provided below.
1. Fewer Unit Owners Needed to Amend a Maryland Condo Declaration
Maryland lawmakers lowered the percentage of unit owner consent required to amend a condo declaration from 80% to 66 2/3%. MD Condo Act § 11–103(c)(1)(i). This change simplifies amendment approvals and promotes smoother condo governance. However, if any units remain under developer ownership, the original 80% threshold still applies (MD Condo Act § 11–103(c)(1)(ii).
2. Condo Associations Not Required to Insure Units in Certain Condos
Maryland law now clarifies that condominium associations are exempted from the obligation of insuring “units” only if the condo is “composed entirely of similar detached condominium units.” For example, a condo where all units are detached residential homes of similar design, separated by shared common element walls, would be exempt from the obligation to insure units.
Though rare, these “detached unit” condos do exist. In such cases, the condo associations only need to carry property insurance on the common elements (MD Condo Act § 11–114(a)(1)(i)), allowing them to require unit owners to carry homeowners insurance for their own individual detached units. MD Condo Act § 11–114(e)(2). Alternatively, the condo associations may choose to “carry homeowners insurance on the entirety of all detached units.” MD Condo Act § 11–114(e)(3). Regardless of whether they insure all or none of the detached units, these associations must still insure the common elements and provide annual notice to unit owners about their responsibility to insure their own units, including updates if this obligation changes. MD Condo Act § 11–114(b)(2)(i) and (ii).
This exemption applies only to “condos composed entirely of similar detached condominium units.” Associations for all other condo types must maintain property insurance on both “common elements and units, exclusive of improvements and betterments installed in units by unit owners, other than the developer.” MD Condo Act § 11–114(a)(1)(i).
3. New Asbestos Disclosure Requirement in Maryland Condo Sales
Maryland now requires sellers of condominium units to provide asbestos disclosures to purchasers. This requirement applies to both initial sales by condominium developers and resales by unit owners. If a seller fails to make the disclosure, the purchaser has the right to terminate the sale, making it unenforceable.
a. Initial Sale by Condo Developer:
A condominium developer must include in the initial sales contract a statement detailing whether it has actual knowledge of asbestos in the condominium. This statement must include: (i) the location of the asbestos; (ii) any asbestos abatement conducted and its timing; and (iii) the date of any such abatement. MD Condo Act § 11–126(a)(2)(iii). If the developer fails to provide this statement, the contract becomes unenforceable. MD Condo Act § 11–126(a).
b. Resale by Condo Unit Owner:
When reselling a unit, a condominium owner must provide the buyer with a statement disclosing whether they know of any asbestos in the unit. This disclosure must include: (i) the location of the asbestos; and (ii) whether abatement was performed during the seller’s occupancy. MD Condo Act § 11–135(a)(5)(iv). The seller must provide this statement no later than 15 days before closing; otherwise, the contract becomes unenforceable. MD Condo Act § 11–135(a).
4. New Electric Vehicle Recharging laws for Community Associations
Maryland has revised and expanded electric vehicle recharging laws for community associations..
a. Insurance of Electric Vehicle Charging Equipment
Maryland Condominium and HOA Acts already promote electric vehicle use by requiring associations to permit owners to install electric vehicle charging equipment at their parking spaces, subject to certain requirements, such reimbursement of the association insurance premium increases due to their charging equipment. MD Condo Act § 11-111.4 and MD HOA Act § 11B-111.8. Maryland law now permits owners to obtain their own insurance and provide the association with a certificate of insurance listing the association as an additional insured prior to installing the equipment. MD Condo Act § 11-111.4(g)(1)(i) and MD HOA Act § 11B-111.8 (g)(1)(i). Owners or the Association, as the case may be, coverage must maintain insurance as long as the equipment remains installed. MD Condo Act § 11-111.4(g)(2) and MD HOA Act § 11B-111.8 (g)(2).
b. Expanded Definition of “Electric Vehicle Recharging Equipment”
Maryland has expanded the definition of “electric vehicle recharging equipment” in the Condo and HOA Acts to include equipment for charging any and all “vehicles propelled by electricity.” MD Condo Act § 11-111.4(a) and MD HOA Act § 11B-111.8(a). Previously the equipment had to be for charging just “motor vehicles propelled by electricity.” This expanded definition encompasses other types of electricity propelled transportation such as “electric bicycles.”
c. Electric Vehicle Recharging Laws Expanded To Maryland Co-Ops
Maryland added Section 5–6B–23.1 to the Cooperative Housing Corporation Act to establish guidelines and procedures for cooperative members to install electric vehicle recharging equipment in their parking spaces. This new law aligns with existing requirements for condominiums and HOAs.
d. DHCD to Publish Electric Vehicle Recharging Info on COC Website
The Maryland Department of Housing and Community Development (“HCD”) must now publish information on its common ownership community website to help owners who want to install electric vehicle charging stations. The website will include a summary of installation requirements for condos, HOAs, and cooperatives, a list of certified contractors and insurers, and a contact for assistance . HCD Article § 2-303(c)(3).
5. Expanded Authority for Condo Associations to Enter into Clean Energy Leases
Maryland has created laws that help condo boards streamline common element clean energy projects, such as installation and operation of solar panels and battery storage systems. Condos boards now have authority to unilaterally grant leases to clean energy companies to utilize common elements for longer than one (1) year. Previously, leases exceeding one (1) year required approval from two-thirds of unit owners. MD Condo Act § 11-125(f). The Maryland Condominium Act now creates an exception for “clean energy equipment” (defined as “electric vehicle recharging equipment, solar energy equipment, and energy storage systems”). Under this amendment, a condominium board can grant leases for clean energy equipment without needing unit owner approval, provided it follow specific protocols. The board must reach it decision to grant a clean energy lease by majority vote and then grant the lease interest at a board meeting with at least 30 days’ prior notice to all unit owners. MD Condo Act § 11-125(f)(5)(ii) and (iii).
6. Funding Assistance for Condo / HOA Infrastructure Replacement
To ensure long-term financial stability, upkeep, and safety of common ownership properties, Maryland requires condos and HOAs to conduct reserve studies every five (5) years and fund their replacement reserves according to these studies. See, Reserve Studies & Reserve Funding In Maryland. Many older communities, however, have struggled to adequately fund their reserve accounts to meet projected replacement costs for shared facilities and infrastructure.
To support these communities, new legislation authorizes Maryland counties and municipalities to establish funds that assist condo associations and HOAs with repairing and rehabilitating their infrastructure. However, the infrastructure must be of the type typically maintained by government authorities for public benefit, such as sidewalks, roads, and stormwater management facilities. Local Government Article § 1–1319(b). These funds cannot be used for recreational facilities, such as playgrounds and clubhouses. Furthermore, local governments administering such funds must establish criteria for awarding monies, with priority given to associations most in need of infrastructure rehabilitation, as well as consideration of each association’s access to other financial resources. Local Government Article § 1–1319(d).
7. New Rule Violation Dispute Procedures for Co-ops
The Maryland Cooperative Housing Corporation Act now includes additional procedures to ensure co-op members receive notice of rule violations and understand their rights to a hearing. These dispute procedures, added to MD Co-Op Act § 5-6B-30, must be followed before imposing any sanctions on members for rule violations. These new guidelines mirror those already applicable to condominiums and HOAs under MD Condo Act § 11-113 and MD HOA Act § 11B-111.10.
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