New Maryland Condominium Laws
Virtual Meetings, Quorums, Electric Vehicles, Composting, and Mandatory Reserve Studies
This Article contains information about the new Maryland condominium laws effective October 1, 2021. This is a brief summary of information we previously provided to clients and serves as a reminder for condominium associations who may not have considered these new laws and how they affect their condominium communities. To comply with these new Maryland condominium laws, a condominium association’s Board of Directors and management company should review existing restrictions and policies and amend or create new policies as needed.
EXPANDING USE OF VIRTUAL MEETINGS
As a result of the Covid-19 pandemic, almost all condominium associations have been holding meetings virtually, rather than in person. A new Maryland law (Condo Act Section 11-139.3) specifically authorizes and provides requirements for holding virtual condominium association meetings. The new law allows virtual and phone board and membership meetings and voting to be held regardless of the requirements of an association’s governing documents and without specific authorization of members, so long as all participants can hear and be heard and instructions for joining the meeting are included in the meeting notice. Per the new law, all participants are considered present for quorum & voting purposes; and ballots and proxies may be delivered with the meeting notice. A condominium association’s Board can set a deadline for returning ballots and proxies, so long as the deadline is no later than 24 hours after the meeting. For elections, a condominium association is not required to permit candidate floor nominations as long as there is at least one candidate nominated to fill each open association board of directors position. Per the new law, a members’ inability to join the virtual or phone meeting due to technical difficulties does not invalidate the meeting or any actions taken.
SIMPLIFYING PROCEDURES WHEN MEMBERSHIP MEETING LACKS A QUORUM
New Maryland Condominium Law (Condo Act Section 11-109) clarifies the procedures to be followed when a quorum is not present at a membership meeting. Previously, if a quorum was not present at a unit owner membership meeting and the governing documents were silent, condominium associations had to follow corporations law for calling a follow-up meeting, which required, among other things, including certain information in the initial meeting notice and publishing notice of a second/follow up meeting in the newspaper. The new law streamlines and modernizes the process. Now, unless the governing documents say otherwise, if a quorum is lacking at a meeting of the condominium membership, a second/follow-up meeting can be called and the owners present at the second meeting in person and by proxy will constitute a quorum and can approve an action as though a quorum was present at the first meeting, if certain procedures are followed. First, the initial membership meeting notice from the condominium association must include a statement that the procedure will be used if a quorum is not present and must include the date, time, and place of the second/ follow up meeting, which must be within 15 days of the initial meeting. This effectively means scheduling a follow-up meeting when the first meeting is scheduled and including the details of the follow-up in the first meeting notice. Second, if a majority of the association’s unit owner members present in person and by proxy at the first meeting vote to hold the second meeting, then a second meeting can be held. Third, a new (“separate and distinct”) notice of the second/follow-up meeting must sent 10 days before the second/follow-up meeting, but this notice can now be delivered by mail, by publishing in a county newspaper, or by positing the notice on the association’s website or by e-mailing the notice to members that provided e-mail authorizations to the association. This provision doesn’t apply to any votes that require specific percentages to authorize an action (e.g. amending governing documents).
RIGHT TO INSTALL ELECTRIC VEHICLE CHARGING EQUIPMENT
New Maryland Condominium Law (Condo Act Section 11-111.4) makes it easier for condominium unit owners to have electric vehicle (“EV”) charging equipment in parking spaces they own (deeded) or have an exclusive right to use (assigned). Unit owners are now allowed to install EV chargers if: the installation doesn’t unreasonably impede normal use of adjacent areas and is reasonably possible; and the owner agrees in writing to comply with codes, safety regulations, and architectural standards, to use a licensed contractor, and to pay for separately metered electricity usage. Under the new law, condominium associations can’t prohibit the installation of EV chargers that meet these requirements, but can impose reasonable restrictions. If Board approval is required, then applications for EV chargers must be processed like applications for architectural modifications and cannot be unreasonably delayed. Applications must be approved/denied in writing and if an application is not denied in writing within 60 days, it is deemed approved, unless the delay was due to a reasonable request for more information. Under the new law, a unit owner installing an EV charger must obtain required permits, provide an insurance certificate naming the association as an additional insured, and reimburse the association for any increases to its master insurance policy premium as a result of the charging station. Unit owners are responsible for EV charger installation costs, any damage to the EV charger equipment or common element property, and maintenance, repair, removal, and replacement costs for the EV equipment. A condominium association Board of Directors may grant a 3-year renewable license for common elements as needed for equipment or electricity supply.
RIGHT TO COMPOSTING
New Maryland Condominium Law (Condo Act Section 11-111.4) provides that condominium associations cannot prohibit, but can reasonably regulate, a unit owner from contracting with a private composting company to collect organic waste materials from the unit owner for compositing at a composting facility and cannot unreasonably impede the ability of such company to access the common elements for such collections.
MANDATED RESERVE STUDIES & RESERVE FUNDING IN MONTGOMERY COUNTY
Changes to Maryland Condominium Act Sections 11-109 and 11-110, now mandate that all Montgomery County condominiums, homeowners associations (“HOAs”), and cooperatives (“co-ops”) must obtain regular reserve studies by qualified professionals and to fund reserves in accordance with those studies. Existing associations who have not had a reserve study completed since October 1, 2017 must complete a reserve study by October 1, 2022. Existing associations that have completed reserve studies since October 1, 2017 must have a new reserve study completed within five years of the date of the last study. All reserve studies must be updated every 5 years thereafter and the association’s annual budget must include reserve contributions as recommended in most recent study. These mandatory reserve funding requirements apply regardless of any governing document provisions restricting assessment increases or caps. The new law also requires that all new associations have a reserved study completed between 30 and 90 days after a developer turnover meeting.
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