Below is a summary of the significant bills that passed this year impacting community associations which will become law on October 1, 2016:
Resale Disclosures – HB1192/SB816
This bill amended certain aspects of the resale certificate for condominiums, including requiring the inclusion of a copy of the current reserve report, or a summary of the report and a statement of the status and amount of any reserve or replacement fund. In addition, condominium are only required to disclose health or building code violations with respect to common elements which it has actual knowledge of. For homeowner associations, this bill now requires disclosing certain information, including the current monthly fees and whether there are any unsatisfied judgements or pending lawsuits against the association. Finally, the bill capped the fee that homeowner associations and condominiums can charge for the resale information at $250.00 for documentation provided within 20 days, a $50.00 surcharge if the documentation must be provided within 14 days or a $100.00 surcharge if the documentation must be provided with 7 days. Condominiums can charge a reasonable fee, not to exceed $100.00, for inspecting a unit. All of the above fee caps can be increased every 2 years based upon the Consumer Price Index for all Urban Consumers for Washington-Baltimore.
Tax Sales – HB970/SB591
This bill requires the purchaser of a tax sale certificate, who files a court action to foreclose the property owner’s right to redeem the property, to notify the condominium or homeowner association governing the property of the court proceeding. In addition, the purchaser at the tax sale is required to pay assessments or fees charged by the homeowners association or condominium from the date the court enters a judgment foreclosing the right of redemption, regardless of whether a deed is recorded transferring ownership.
Consumer Debt Collection Actions - HB1491/SB771
This bill prohibits a creditor from bringing an action to collect a consumer debt if the statute of limitations for bringing the claim has expired. In addition, any payment towards the debt, or written or oral affirmation of the debt, or any other activity may not revive or extend the statute of limitations. Since condominium and homeowners association assessments are consumer debts, the collection of unpaid assessments is subject to this new law.
Susan Rapaport is an attorney with the Community Association practice group at Davis, Agnor, Rapaport & Skalny, LLC. For questions about this article or other questions about Community Association issues, please do not hesitate to contact Susan at 410.995.5800 or via email.