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Legal Question about CC&R's, and Bylaws for MD

Started by StephanieF1 • 12 replies • 2550 views

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StephanieF1 (Maryland)
Posts: 8
Posted:
I am a newley appointed President of an HOA in Fallston, Maryland. I have read the CC&R's, ours is called the Declarations of Restrictions, and these are very vague. Our community was built in 1970; we have 3 Declarations of Restrictions that cover each section of the community when each sections were built (each are very similar). We have a voluntary HOA due of only $30 a year. We are starting to have problems with violations ie. trailers in driveways, RV's, boat trailers etc. Now the neighbors want me to correct these issues and I don't know where to start. There is no past history of violation letters, no contact with a lawyer, no insurance for the HOA. And this being said I'm sure I need to contact a lawyer and only have about 3K in the bank for the HOA and our HOA maintains an entranceway that needs money put into this task.

What should I do?
and
Are there standard formats for viloation letters?
Do I need to contact a lawyer?
Do we need insurance?
Does the MARYLAND HOMEOWNERS ASSOCIATION ACT cover any loop holes that our Declarations of Restrictions do not cover?

Stephanie Flasch

RogerB (Colorado)
Posts: 5,067
Posted:
Stephanie, since your HO is voluntary (members may join by paying dues) and not manditory (assessment against property) you have minimal ability to enforce restrictions. Your HOA does not have sufficient funds to take a violation to court or to employ an attorney except for minimal consultation.

You can send notices to request owners comply with restrictions which they are violating. And if your Declaration allows you may be able to assess fines. As a voluntary association you probably to not have common areas so the only insurance you need to consider is D&O to protect the Board members against suits. Also, you need to be incorporated and have an indemnification clause in the Articles of Incorportion to protect the Board members.
TracyT (Maryland)
Posts: 228
Posted:
Hi Stephanie,

I live in a HOA in MD too and agree with Roger's comments and recommendations. As for the HOA Act it covers some broad catagories like:
- Disclosures during initial and re-sale of the home (documents must be provided).
- Construction defects.
- There are provisions for changing "day-care" requirements in CC&Rs (if it is prohibited or how to prohibit it).
- All meetings are to be open to the association at least one per year has to allow for public comment. (some exceptions apply)
- HOA memembers can meet and discuss association matters without the BOD.
- HOA record repository
- Electronic records

Thats I can think of right now.

Also, based on the Governors 2006 task force report on Common Ownership Communities (COC) there are several bills floating in the General Assembly. Everything is on-line at the MD General Assebmly (just query that and it'll come up).

I hope this was helpful. Good luck
Tracy

JulieS (Georgia)
Posts: 412
Posted:
What is a 'common ownership community'? I have seen this while looking for homes on the internet (in Alaska) and have never heard of it.
RogerB (Colorado)
Posts: 5,067
Posted:
Julie, to my knowledge most of the newer HOAs are common interest ownership communities. They have manditory assessments to provide funds for their common areas.
StephanieF1 (Maryland)
Posts: 8
Posted:
Our community has on common area. Does this mean we need insurance? What is D&O?
RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By StephanieF1 on 05/08/2007 10:00 AM
Our community has on common area. Does this mean we need insurance? What is D&O?

D&O = Directors and Officers Insurance. It is highly recommended if not required by your CC&Rs.
TracyT (Maryland)
Posts: 228
Posted:
Stephanie,

I went back to your OP. Modern CC&Rs would define the questions that you are asking. Your CC&R is very old and should be reviewed and/or revised. For example our CC&R/by-laws document the use restrictions and enforcement, the board’s responsibilities, voting requirements, insurance requirements for both the common areas and any improvements and directors liability, that a management company can be used and among other things the expiration and automatic renewal of the CC&R (which is 30 years from the date of filing). Does your CC&R state any of things? Are your CC&Rs still in effect?

It sounds like your community wants to keep the HOA going but you don’t really have the budget for it. I don’t know what to tell you here but a management company could. You would probably need to increase the dues in order to have a functioning HOA. If that happened would the community still support it?

There is also a local organization (in Montgomery Co.) http://www.marylandhomeownersassociation.info/ who can get you down the right path for the state. You can join the org. for like $25 a year and have access resources with knowledge of state laws.

Tracy
StephanieF1 (Maryland)
Posts: 8
Posted:
I do not see anything in our CC&R's about D&O insurance but I will ask a lawyer about this insurance.
StephanieF1 (Maryland)
Posts: 8
Posted:
Our expiration states "...for a period of thirty (30) years from the date these covenants are recorded, after which time said covenants shall automatically be extended for successive periods of ten (10) years unless and until an instrument signed by the then record owners of leasehold equities...has been recorded,by which said covenants, in whole or in part, are amended or revoked."

I have checked into the maryland homeowner association; I am going to join. Do they have samples of violation letters, etc above and beyond legal laws for maryland?
TracyT (Maryland)
Posts: 228
Posted:
Stephanie,

I'm sure they do. You'll have access to MCs, other HOAs and attorneys. Good luck. Tracy
JC3
Posts: 290
Posted:
Quote:
Posted By StephanieF1 on 05/09/2007 7:12 AM
Our expiration states "...for a period of thirty (30) years from the date these covenants are recorded, after which time said covenants shall automatically be extended for successive periods of ten (10) years unless and until an instrument signed by the then record owners of leasehold equities...has been recorded,by which said covenants, in whole or in part, are amended or revoked."

Where would one go to find out if the covenants, in whole or in part, were amended or revoked? Since HOA's are corporations, would it be the county recorders office, or a state agency, or someplace else?
RogerB (Colorado)
Posts: 5,067
Posted:
Covenants and amendments to them are not official until filed with the County Clerk and Recorder. That is the official location to get copies. A well run HOA will provide copies to every owner at the time they occur or when they purchase a property in the HOA.

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