The Maryland General Assembly passed legislation, effective October 1, 2024, that will impact community associations. The updates are as follows:
Reduced Approval Requirement for Declaration Amendment – Condominiums (SB 665)
Historically, condominiums have been required to obtain consent from 80% of the unit owners before an amendment could be made to the Declaration. This new law lowers the threshold requirement to written approval from 66 2/3% of the total number of unit owners. If, however, the developer owns
any of the units, the association must still receive approval from 80% of the unit owners.
Asbestos Resale Disclosure Requirements – Condominiums (HB 143)
The new law mandates specific disclosures by a unit owner concerning the presence of asbestos within a condominium unit prior to its sale. If the unit owner has actual knowledge of the presence of asbestos in the condominium, the owner
must disclose such knowledge. The disclosure must also include a description of the location of the asbestos, whether abatement has been performed, and the date of any abatement. Resale disclosures by an association also exist and may be required related to asbestos in response to an association’s knowledge of health or building code violations.
Use of Local Government Funds for Community Association Reserves (HB 280)
In the last few years, Maryland has enacted legislation requiring that community associations establish/update a reserve study every five years and fund reserves pursuant to it. The purpose of the law was to ensure that associations have sufficient reserve funds to cover future major repairs and replacement of capital items under association repair and replacement responsibility.
The reserve laws placed a significant financial burden on many associations and their owners as associations increased assessment fees to meet reserve requirements. To offer financial relief, a new law provides that municipalities and counties may establish local trust funds for repairing or rehabilitating infrastructure under association responsibility that is traditionally maintained by the county or municipality (i.e., roads and stormwater management facilities). To fund this initiative, local governments may use property tax revenue, earnings from investments, additional funding from the county or municipality, and donations made to the fund. Associations with the greatest infrastructure repair or rehabilitation needs will receive priority for the receipt of funds from the county/municipality. Please note that county/municipality funds may not be used for recreational facilities that are for the exclusive use of association members. To receive funding, such facilities must be open to the public.
Electric Vehicle Charging Equipment (HB 159)
This new law requires owners who install electric vehicle charging equipment to maintain insurance coverage for the installation and include the association as an additional insured on their policy prior to undertaking an installation. Such policy coverage must also be maintained by the owner at all times that the equipment is installed on the property. For cooperatives, the Maryland Cooperative Housing Corporation Act was amended to prohibit a cooperative from refusing to allow or unreasonably restrict the installation of an electric vehicle charging station in a parking space assigned to an owner. Finally, the new law expands coverage to also include electric bicycles.
Installation and Use of Clean Energy Equipment – Condominiums (HB 216)
For clean energy equipment projects, boards will no longer have to obtain unit owner approval prior to granting a lease longer than one year or affecting the common elements. Instead, by a majority vote, the condominium’s board of directors may grant a lease longer than one year, or a similar interest affecting the common elements of the condominium for the installation and use of electric charging vehicle equipment, energy storage systems, and solar energy equipment. The board of directors must provide unit owners with at least thirty days’ notice prior to the board meeting where the lease will be granted.
Condominium Insurance Detached Unit Coverage Requirements (HB 1227)
In 2023, the Maryland General Assembly passed a law providing that condominiums with detached units are only required to insure the common elements and not individual detached units. The 2023 legislation was unclear, however, on what insurance coverage requirements apply to condominium associations with both detached and attached units. To clarify this issue, an amendment to the law was passed in 2024. Under this amendment, condominium associations with both detached and attached units may decide whether to insure the entire condominium or just the common elements. If the association chooses to only insure the common elements, unit owners of detached units will be required to obtain separate insurance policies for their detached unit. Associations that require detached unit owners to obtain separate insurance must notify the owners of such obligation on an annual basis.
