New 2021 Homeowners Association and Condominium Laws

Homeowners and Condominium Associations

2021 Maryland Legislative Update

NEW RESERVE STUDY AND FUNDING REQUIREMENTS IN PRINCE GEORGE’S AND MONTGOMERY COUNTIES

Prince George’s County

Condominiums in PG County:

Requirements of a Developer - If you are a developer transferring control of a condominium board of directors to homeowners (i.e., transition) for a condominium established on or after October 1, 2020, then:

You must have an independent reserve study completed not less than 30 calendar days before the transition meeting [which must be held no later than 60 days from the date that units representing 50% of the votes (or a lesser percentage as specified in the declaration or bylaws of the condominium) have been conveyed by the developer to members of the public for residential purposes]. See Real Prop. Art. §§11-109.4(c)(2) and 11-109(c)(16), MD Code.

Requirements of a Condominium Board -

For a condominium established on or after October 1, 2020:

The board must have a reserve study completed within 5 years of the date of the initial reserve study and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(c)(3)(i), MD Code.

For a condominium established before October 1, 2020:

If a reserve study was conducted on or after October 1, 2016, the board shall have a reserve study conducted within 5 years of that study and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(d)(1)(ii), MD Code.

If a reserve study was NOT conducted on or after October 1, 2016, then the board shall have one conducted on or before October 1, 2021, and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(d)(1)(iii), MD Code.

Homeowners Associations in PG County:

Requirements of a Developer - If you are a developer transferring control of a board of directors to homeowners in PG County for an HOA established on or after October 1, 2020, then:

You must have an independent reserve study completed not more than 90 calendar days and not less than 30 calendar days before the transition meeting [which is 60 days from the date that at least 75% (or a lesser percentage if specified in the governing documents) of the total number of lots that may be part of the development after all phases are complete are sold to members of the public for residential purposes. See Real Prop. Art. §11B-112.3(c)(2), MD Code.

Requirements of an HOA Board -

For an HOA established on or after October 1, 2020:

The board must have a reserve study completed within 5 years of the date of the initial reserve study and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(c)(3), MD Code.

For an HOA established before October 1, 2020:

If a reserve study was conducted on or after October 1, 2016, then the board shall have an updated reserve study conducted within 5 years of that study, and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(d)(1)(ii), MD Code.

If there was no reserve study conducted on or after October 1, 2016, then the board must have a reserve study conducted on or before October 1, 2021, and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(d)(1)(iii), MD Code.

 Montgomery County

Condominiums in Montgomery County:

Requirements of a Developer - If you are a developer transferring control of a condominium board to homeowners (i.e. transition) for a condominium established on or after October 1, 2021, then:

You must have an independent reserve study completed not more than 90 days and not less than 30 calendar days before the transition meeting [which must be held no later than 60 days from the date that units representing 50% of the votes (or a lesser percentage as specified in the declaration or bylaws of the condominium) have been conveyed by the developer to members of the public for residential purposes]. See Real Prop. Art. §§11-109.4(c)(2) and 11-109(c)(16), MD Code.

Requirements of a Condominium Board -

For a condominium established on or after October 1, 2021:

The board must have a reserve study completed within 5 years of the date of the initial reserve study and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(c)(3)(i), MD Code.

 For a condominium established before October 1, 2021:

If the board had a reserve study conducted on or after October 1, 2017, the board shall have a reserve study conducted within 5 years of that study and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(d)(2), MD Code.

If the board has NOT had a reserve study conducted on or after October 1, 2017, then it shall have one conducted on or before October 1, 2022, and at least every 5 years thereafter. See Real Prop. Art. §11-109.4(d)(2), MD Code.

Homeowners Associations in Montgomery County:

Requirements of a Developer - If you are a developer transferring control of a board of directors to homeowners for an HOA in Montgomery County established on or after October 1, 2021, then:

You must have an independent reserve study completed not more than 90 calendar days and not less than 30 calendar days before the transition meeting [which is 60 days from the date that at least 75% (or a lesser percentage if specified in the governing documents) of the total number of lots that may be part of the development after all phases are complete are sold to members of the public for residential purposes. See Real Prop. Art. §11B-112.3(c)(2), MD Code.

Requirements of an HOA Board -

For an HOA established on or after October 1, 2021:

The board must have a reserve study completed within 5 years of the date of the initial reserve study and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(c)(2), MD Code.

For an HOA established before October 1, 2021:

If a reserve study was conducted on or after October 1, 2016, then the board shall have an updated reserve study conducted within 5 years of that study, and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(d)(2)(ii), MD Code.

If there was no reserve study conducted on or after October 1, 2016, then the board must have a reserve study conducted on or before October 1, 2021, and at least every 5 years thereafter. See Real Prop. Art. §11B-112.3(d)(2)(iii), MD Code.

Prince George’s and Montgomery Counties - Homeowners and Condominium Associations

Other General Requirements Relating to Reserve Studies in PG and Montgomery Counties:

• Specific qualification requirements for the preparer of the reserve study
• Study must be available for inspection
• Study must be reviewed by the board when preparing the annual budget
• Study must be summarized and summary provided to lot owners with the annual budget

See Real Prop. Art. §§11-109.4(e) and 11B-112.3(e), MD Code.

Additionally, the annual budget must include the full amount of the reserve funding recommended in the reserve study. In addition, and notwithstanding provisions to the contrary in the HOA governing documents, the governing body has the unilateral authority to increase the assessment to cover funding for the reserve study. See Real Prop. Art. §11-109.2(c) and (f), and §11B-112.2(d) and (g), MD Code.

REQUIRED NOTICES FOR CONTRACTS OF SALE-ZONES OF DEWATERING INFLUENCE

If you are selling property in Baltimore County, Carroll County, Frederick County or Washington County, you must provide a buyer with the required disclosure with the contract of sale. The text of the disclosure must be published exactly as stated in the statute as follows:

“Notice on Zones of Dewatering Influence

A purchaser of real property located in Baltimore County, Carroll County, Frederick County, or Washington County is advised to contact the Maryland Department of the Environment to determine whether the real property for purchase is located within a zone of dewatering influence. Maryland Law provides certain remedies for property impacted by dewatering.”

The purchaser may rescind the contract if the disclosure is not provided.

Dewatering zones maps are maintained on the MDE website in a Google Earth format that can be downloaded and viewed only on Google Earth. https://mde.maryland.gov/programs/land/mining/pages/mapping.aspx

Dewatering zones are defined as areas surrounding limestone mines from which water is being pumped. The concern is sinkholes and underground channels that may collapse. MDE regulates surface mining and issues various permits associated with surface mining activity. See Real Prop. Art. §10-711, MD Code.

Residential Construction- Electric Vehicle Charging

Requirement for Builders of New Housing Units

Builders of new housing units in Maryland must provide buyers with the option to include in the garage, carport or driveway a charging station or dedicated electric line and to provide notice of these options and available rebate programs. See Public Safety Art. §12-205, MD Code.

This option applies to single family detached homes and town homes, if construction includes one or more new units with at least a garage, carport or driveway for each unit.

The statute takes effect October 1, 2021, and shall be construed to apply only prospectively and not to any applications for new construction for which a building permit is issued prior to the effective date. See HB 784, Section 2.

ELECTRICAL VEHICLE CHARGING EQUIPMENT FOR MULTFAMILY UNITS ACT

The provisions of the governance documents for condominiums and homeowners associations, including the recorded covenants and restrictions, declarations or bylaws or any rules of the community, cannot prohibit or unreasonably restrict installation of recharging equipment in a parking space that is owned or specifically designated for a unit owner. Any provisions that conflict with the statute are void and unenforceable. See Real Prop. Art. §§ 11-111.4 and 11B-111.8, MD Code. Condominium and HOA boards can require a unit owner to file an application to install an electric vehicle charging station, which shall be processed in the same manner as an architectural modification.  If an application is not denied within 60 days, it is deemed approved. The statute allows reasonable requirements for application and installation, which the condominium or HOA board can enforce.

VIRTUAL MEETINGS

Authorizing Condominiums and HOAs in Maryland to conduct business virtually

Governing bodies of condominiums and homeowners associations are generally authorized to conduct meetings and allow attendance of meetings electronically.  See Real Prop. Art. §§ 11-139.3 and 11B-113.6, MD Code.

COMPOSTING

Restrictions on Condominiums

The covenants, restrictions, declarations, bylaws or rules of a condominium cannot unreasonably restrict a unit owner from contracting with a private entity to collect organic waste materials for composting at a composting facility, including access to common elements. See Real Prop. Art. §11-111.5, MD Code.

Restrictions on HOAs

The covenants, restrictions, declarations, bylaws or rules of a homeowners association cannot prohibit or unreasonably restrict a lot owner from composting on his property for personal or household use or contracting with a private entity to collect organic materials for offsite composting, including access to common elements. See Real Prop. Art. § 11B-111.9, MD Code.

LOW IMPACT LANDSCAPING-RESTRICTIONS ON USE

Restrictions on Condominium and HOA Authority

A deed, declarations, contract, bylaws or rules of a condominium or homeowners association, security instruments or other interests in real property that contain restrictions on use cannot impose unreasonable limitations on low impact landscaping, including biohabitats, pollinator gardens, rain gardens, as defined, if a property owner owns or has the exclusive use of the planted area, and maintains the low impact landscaping. See Real Prop. Art. §2-125, MD Code.

PORTABLE BASKETBALL HOOP RESTRICTIONS ON LOCATION

Restrictions on Condominium and HOA Authority

A deed, declarations, contract, bylaws or rules of a condominium or homeowners association, security instruments or other interests in real property that contain restrictions on use cannot restrict a property owner from having a portable basketball hoop on his own property or property which he has the exclusive right to use.  This DOES NOT apply to historic property listed in, or determined by the Director of the Maryland Historic Trust to be eligible for inclusion in the Maryland Register of Historic Properties. See Real Prop. Art. §2-124, MD Code.