The Maryland General Assembly’s 2024 legislative session saw over 1,400 House Bills and 1,100 Senate Bills introduced, with several new laws passing that will affect community associations beginning on October 1, 2024. Here are the updates:
New Disclosure on Sale Requirements for Asbestos
Beginning October 1, 2024, home sellers and condominium associations where units are being sold will have to disclose certain information about asbestos to potential purchasers.
Home sellers must disclose if they have actual knowledge “of the presence of asbestos in the unit, including a description of the location of the asbestos, and whether abatement has been performed in the unit during the occupancy of the owner.”
This new law does not require condominiums to disclose the existence of asbestos within the condominium. Instead, condominium associations must disclose in the resale certificates if they know of “any violation of the health or building codes relating to asbestos.” For example, the condominium must disclose if asbestos was disturbed in the condominium without required mitigation and remediation measures and whether such action or inaction resulted in a violation issued by the local or state government that remains uncured.
You can review the new legislation in full here.
Government Assistance and Taxation to Fund Reserves
A few years ago, the Maryland General Assembly adopted new laws requiring community associations to obtain a reserve study every five (5) years and then to budget for reserves for the repair and replacement based on these reserve studies. These new requirements place some communities in Maryland, especially older communities, in difficult financial positions, often requiring them to increase assessments to properly fund reserves.
This new Maryland law seeks to create an avenue for possible financial assistance by allowing local governments to establish funds to pay for certain portions of these shared facilities if those facilities are “infrastructure that is traditionally maintained by the county or a municipality for the benefit of the public, including roads and stormwater management facilities”.
However, this law allows local governments to use special tax assessments to fund these initiatives. Nevertheless, this new law may help some Maryland associations plan and pay for the repair, maintenance, and replacement of certain shared components of their communities.
You can review the new legislation in full here.
Clarification of Certain Condominium Insurance Requirements
Last year, the Maryland General Assembly adopted an amendment to the condominium insurance obligations, stating that a condominium with detached units only needs to insure the common elements, as opposed to the entire condominium property (common elements and units). This law led to some confusion for condominiums comprised of detached and attached units.
This new law clarifies the insurance requirements for condominiums with detached condominium units. Under the new law, condominium associations of such communities can choose whether to insure the entire condominium property or only to insure the common elements of the condominium. These condominium associations must notify their unit owners annually of insurance obligations and when the condominium association changes the scope of its and unit owner insurance obligations.
You can review the new legislation in full here.
Lower Threshold to Amend Condominium Declarations
Maryland condominiums can soon be able to amend their declarations with the written consent of 66.6% of unit owners, which is lower than the current 80% threshold under Section 11-103 of the Maryland Condominium Act. Amending a declaration is a technical process that requires careful crafting to avoid unintended consequences. Condominium associations are encouraged to work with legal counsel to prepare any amendments.
You can review the new legislation in full here.
New Dispute Settlement Procedure for Cooperatives
Maryland cooperatives will have to follow a new due process procedure before imposing sanctions for violations of the governing documents. The new procedure is designed to align cooperative dispute resolution processes with those processes already in place by statute for condominiums and homeowners associations.
Unless the bylaws or proprietary lease provides otherwise, the newly revised due process procedure under Section 5-6B-30 of the Maryland Cooperative Housing Corporation Act requires that the board of directors provide an alleged violator no less than 15 days to abate a violation (increased from 10 days). If the violation continues or reoccurs thereafter, then the board must provide the alleged violator a written notice of their right to request a hearing before the board within 10 days. This right to request a hearing eases the former requirement that a hearing be provided irrespective of a request. If, after the hearing, or if no hearing is timely requested, the board finds that a violation has occurred, then it may impose sanctions.
This new procedure is similar to the procedure already in place for condominiums under Section 11-113 of the Maryland Condominium Act, and homeowners associations pursuant to Section 11B-111.10 of the Maryland Homeowners Association Act.
You can review the new legislation in full here.
Expanding on Electric Vehicle Recharging Equipment
Electric vehicles will be redefined to include motor vehicles and electric bicycles. This new legislation – which revises Section 11-111.4 of the Maryland Condominium Act and Section 11B-111.8 of the Maryland Homeowners Associations Act – also requires that owners (i) provide a certificate of insurance naming the association as an additional insured prior to the installation of the electric vehicle recharging equipment; (ii) reimburse the association for the cost of increased insurance premium attributable to the equipment; and, (iii) maintain the insurance for the duration of the installation.
A new Section 5-6B-23.1 will also be added to the Maryland Cooperative Housing Corporation Act, providing that cooperatives cannot effectively prohibit or unreasonably restrict the installation or use of electric vehicle recharging equipment in a member’s parking space or a parking space specifically designated for use by a particular member.
You can review the new legislation in full here.
Clean Energy Equipment
Under this new legislation, the condominium board of directors, by a majority vote, may grant leases over 1 year or similar interests affecting the common elements for the installation and use of electric vehicle recharging equipment, solar energy equipment, and energy storage systems (referred to together as “clean energy equipment”). The board of directors must grant the lease or similar interest at a meeting of the board held after at least 30 days’ notice to all unit owners. This new law circumvents the need to obtain any ownership approval to grant leases or similar interests affecting the common elements for the purpose of approving the installation of clean energy equipment.
You can review the new legislation in full here.
Notable Bills that Did Not Pass
- Manager licensing and board member training initiatives failed to pass (again) this year.
- A bill to create a statewide Task Force on Common Ownership Communities to study the education and training needs of community association boards and new and prospective owners of homes and dwelling units in community associations failed.
- Multiple bills that would create new board member training obligations failed.
- A bill to create a bill of rights for owners within community associations failed.
- A bill that could void Montgomery County association covenants and rules to the extent inconsistent with state or local law or regulation failed.
In addition, while not a new law, on January 29, 2024, the Office of the Fire Marshal determined that “the Commission’s general determination that existing high-rise buildings be retrofitted with sprinklers will not be enforced.” This decision means that many condominiums and cooperatives are no longer required to raise and spend millions to retrofit older buildings with new sprinkler systems. You can read more about it here.
That said, the Melanie Nicholle Diaz Fire Safety Act was passed, requiring residential rental high-rise buildings to install smoke detectors beginning July 31, 2025 in accordance with location and spacing requirements established by the National Fire Protection Association in each interior public corridor. A copy of the Act in its entirety can be found here.
Please contact your legal counsel for more information. As always, Lerch Early’s community association’s attorneys will continue to keep our clients abreast of legislative developments.
