Client Alert: 2020 Maryland Legislative Update
Date: September 25, 2020
Mortgagee Approval (HB 25/SB 293 – amending § 11-103 of the MD Condominium Act and § 11B-116 of the MD Homeowners Association Act)
Silence is deemed consent when it comes to obtaining lender approval for amendments to the governing documents of a condominium or homeowner association. Effective October 1, 2020, a governing document provision, which requires action on part of the holder of a mortgage or deed of trust to amend the governing document, is satisfied if the association delivers the proposed amendment and the mortgagee or holder fails to object, in writing, to the proposed amendment within 60 days after receipt. If no written objection is received within the timeframe, the mortgagee or holder of the deed of trust is deemed to have consented to the adoption of the amendment. This new manner of consent does not apply to amendments that (1) alter the priority status of the lien; (2) materially impair the unit/lot as collateral; or (3) materially impair the right to exercise any rights under the mortgage, deed of trust or applicable law.
Annual Proposed Budget (SB 472 – amending § 11-109.2 of the MD Condominium Act and § 11B-112.2 of the MD Homeowners Association Act)
Condominium and homeowner associations are currently required to provide owners with an annual proposed budget at least 30 days before adoption. Effective October 1, 2020, condominium and homeowner associations will also be obligated to submit the approved budget to owners within 30 days of the meeting at which the budget was adopted. Submission of the adopted budget may be via electronic transmission, posting on the association’s home page, or by inclusion in the association’s newsletter.
Insurance Deductibles (HB 108/SB 175 – amending § 11-114 of the MD Condominium Act)
A condominium association can assess the owner of a unit up to $10,000 of the association’s insurance deductible when the damage originates from the unit. This is an increase of $5,000 from the existing law. The change also clarifies that a condominium association’s insurance deductible is treated as a common expense if the damaging event originates from the common elements or “outside of the condominium units and common elements.”
Please contact a Whiteford, Taylor & Preston, LLP community association attorney for more specific advice based on your community’s individual needs and concerns.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.