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The following is a summary of some of the new laws of interest to community associations that were passed by the Maryland General Assembly in the 2012 Regular Legislative Session.

Condominium - Right of Entry for Investigation (HB126).  Currently, a council of unit owners, or its authorized designee, can enter condominium units to make repairs.  This bill expands this right by also authorizing entry in order to investigate damage.  The bill requires reasonable effort to give notice to the unit owner prior to entry, unless the damage involves manifest danger to public safety or property.  This law takes effect on October 1, 2012.

Bay Restoration Fund (HB446).  This bill increases the monthly bay restoration fund fee from $2.50 to $5.00 for an individual water or sewer bill (where a water “usage-based” billing system is not used).  It increases the fee from $30.00 to $60.00 per year for each user of an on-site sewage disposal (septic) system or sewage holding tank.  Also, it replaces the current flat fee of $2.50 per month for residential users receiving a “usage-based” bill, with a new fee based on water usage, which is $0.90 per 1,000 gallons per month for the first 2,000 gallons, and $1.25 for each additional 1,000 gallons.  This law takes effect on July 1, 2012.

Certificate of Insurance Forms (HB463/SB297).  This bill requires certificates of insurance to be provided in a format approved in advance by the Maryland Insurance Commissioner.  This bill is aimed at preventing misleading statements in certificates of insurance.  This law takes effect on October 1, 2012.

Condominium - Nonpayment of Utility Invoices (HB 884).  This bill requires a utility provider (including a public service company or political subdivision) that directly bills a condominium for water, sewer, gas, or electric service to notify individual condominium unit owners when the association’s account is in default for at least 60 days.  Such entities are authorized to enter the common area of a condominium at reasonable times to post such notice.  This law takes effect on October 1, 2012.

Fee for Administrative Hearings - Prince George’s County (HB906).  This bill authorizes Prince George’s County to adopt an ordinance imposing a fee for mandatory administrative hearing services concerning disputes involving common ownership communities located within the county.  This bill provides a funding mechanism for hearings to be administratively resolved, as currently possible through the Commission on Common Ownership Communities in Montgomery County.  This law takes effect on October 1, 2012.  The Prince George’s County Council has not yet introduced an ordinance to exercise this new authority.

Condominium – Notice of Foreclosure Purchase (SB123).  This bill requires a secured party, or its assignee, that has purchased residential property at a foreclosure sale, to provide a copy of the court order ratifying the sale to the supervisor of assessments within 60 days after the date of the court order.  This law takes effect on June 1, 2012.

Condominium - Recycling Program (SB208).  This bill requires a condominium containing 10 or more units to provide for the collection and removal of recyclable materials and to report annually on recycling activities.  The bill establishes a penalty of $50.00 for each day that a violation of the requirements exists.  A local law may be more stringent (e.g., in Montgomery County, a recycling program is already mandated for a condominium containing 7 or more units).  The recycling program must be in effect by October 1, 2013.

Towing of Vehicles from Parking Lots (SB401).  This bill establishes statewide regulations governing the towing of vehicles from parking lots.  It does not prevent a local jurisdiction from implementing more stringent regulations (e.g., Montgomery County’s towing regulations, set forth in Chapter 30C, will remain in effect).  Certain provisions are altered by implication.  For example, currently in Montgomery County, a car must be released to the owner if the owner returns to the parking lot before the tow is complete and pays a release fee, provided the car has not yet been lifted more than 6 inches off the ground.  The new law provides that the car must be released regardless of how far it has been lifted off the ground.  The new law limits the release fee to 50% of the towing fee.  Also, in addition to notice to police, the new law requires notice to be mailed, by certified mail, to the owner of the vehicle, any secured party, and the insurer of record, within 3 days after towing.  This law takes effect on October 1, 2012.

Surprisingly, House Bill 433 and Senate Bill 372, concerning the proposed “Common Interest Community Managers Act,” which would have mandated the licensure of community association managers, did not pass.  The unfavorable committee response was likely due to the mandatory fees that would have been paid by associations.  Common interest communities would have been required to register with the State Board of Common Interest Community Mangers and pay a per unit or lot fee.

Several bills aimed at providing greater collection mechanisms did not pass.  For example, House Bill 850 would have allowed a condominium to petition for a court order to direct a tenant to pay rental payments directly to the condominium, if the landlord-owner was 90 days or more delinquent in payment of assessments.  Similarly, House Bill 960 would have allowed a condominium to petition for a court order to turn off utility service to a unit 90 days or more delinquent in payment of utility invoices.  Also, Senate Bill 830 would have granted first-lien priority on an abandoned unit or lot’s unpaid fines, assessments, fees, or obligations, including interest and penalties, if a community association were to provide “notice of abandonment” to the lender and the lender failed to take action within 60 days.  We hope to see these bills, or similar legislation, in future sessions.

For more information, contact Ron Bolt at 301-838-3319.