New Maryland HOA/Condo Laws

JeanneK,

Are 1,2,4 and 5 applicable to both HOA's and Condo associations?

Thx
Barb

Thanks!
Barb

Robert: I don't know if I can really answer your question but it is my experience that if the developer follows the guidelines outlined in the governing documents (which the developer approved) then it is a legal board. Jeanne

JeanneK,
Don't miss understand me, I am not talking about the requirements in the governing documents that provide for a Board. My question is the Board the developer causes to be in place when he has control. does your state statutes include that part of it? On this board we hear of new developments having a Board of Directors appointed by the developer and in on case at least we have heard of a developer causing somehow to have owners hold and election and elect the minority of a Board. In most cases this minority, developer appointed, accepts the turn over documents that creates the Association. I know that our original documents starts with the creation of a totally elected by the members Board of directors. There is no mention of anyone being carried over from any other Board. However, I have never physically been involved at turn over time anywhere.
My question to all is: does the developer follow the documents as provided at turn-over. There has to be something more going on than that as declaration and documents don't allow for a developer appointed board.
Now Maryland's new law defines what documents must be turned over at transition. Can you define what those documents are?
Our legal documents made no mention of a developer selected Board, does yours? We have since re-done our documents and there is little if any reference made to a developer, certainly no ties.

Robert: I can't tell you which documents off the top of my head. The url for each bill is given above so for the details, you can go to the actual bill. Jeanne

Mary thanks for your reply,
I know for a fact the very first purchasers of these places paid assessments due from the time of purchase. I think I will just accept the conditions as they are but have difficulty explaining them to my self with logic. Your assessment question is an example.
If the developer can set and collect assessments than why isn't he bound by the rest of the documents? Such as election by members for example. Also this matter of collecting assessments in some documents, I think this is a state statute, specify that those assessments are to be put into a reserve or escrow account. Of course we know there is stipulation that the developer can post a bond to insure these fund are available at the time of turnover and that never seems to happen because most associations seemed to be in trouble from the start. I would not swear all I said above is Gospel, but that is what is in my mind. In SC it may be that the State Law allows for the construction of the condo and then the Regime documents are picked up at turnover. Now the hole in my head is hurting.

Mary,
Below clipped from the Horizontal Property Act of South Carolina.

Again I am not sure how this works but to read it seems to indicate if the developer elects to subject the development to this act prior to construction and up to completion and (turnover), all proceeds must go to escrow. etc, etc.

All this stuff has got to be state specific but here it seems to say until turnover there is no association, only that the development of the association will be subject to the Act. Something about this whole mess is very confusing to me. Just as a guess I think the developer petitions the court anytime he wants to change some set of required guidelines prior to turn over and gets relief from the courts so each development guidelines are changed to fit the end product. Then at turnover his control is cleared and the association is registered. We do know that in some instances the developer may own a number of units and if I recall he may or may not pay assessments on them all, but he holds the vote of each.

It has got to be very complicated and specific, and as you say there is a lot of things done simply because no one objects.

I have a son and daughter in law that live overseas and among other things own a condo here in SC. Neither one have the slightest interest in the management of their Regime. Their mind set is that a large number of these condos (4 plexes) are owned by Real estate people that bought them for speculation, so there fore there interests will be protected. Well, like a lot of places the speculation didn't develop and now who knows how there investment is protected. It's sort of high end stuff for their area and eventually will come back, but it sure won't be because of any input they provide.

SECTION 27-31-30. Establishment of horizontal property regime.

Whenever a lessee, sole owner, or the co-owners of property expressly declare, through the recordation of a master deed or lease, which shall set forth the particulars enumerated in Section 27-31-100, their desire to submit their property to the regime established by this chapter, there shall thereby be established a horizontal property regime. Property may be submitted to a horizontal property regime prior to construction or the completion of any building or apartment, improvements, or structures on the property if all proceeds from its sale are deposited into an escrow account with an independent escrow agent until construction or completion of the proposed property as evidenced by issuance of a certificate of occupancy from the appropriate municipal or county authority. In lieu of any escrow required by this section, the escrow agent may accept a surety bond issued by a company licensed to do business in this State as surety in an amount equal to or in excess of the funds that would otherwise be placed in the escrow account with the South Carolina Real Estate Commission designated as beneficiary of any such surety bond.

SECTION

Mary, I will have to think about what you say.
In any event, I am trying to pin down at what point does the associations become real.
The reference above cites below: I still see nothing that says specifically when birth takes place. It does state either the developer or the owners can establish the association (Condo). I expect the developer would not to operate and doesn't by the Master Deed and By-laws. He must March to a different drummer and in SC it could be this Planned Unit Development (PUD). This is probably a mental exercise more than anything. At least in my case we were not born until our documents were registered and that was after the units were sold. The first line in the below seems to say the creation has to be the owners as a single owner ( developer) would not represent any other owners. (owners of the real property making up the regime) Only when the owners represent the Regime does creation occur.

SECTION 27-31-100. Master deed or lease; contents.

The master deed or lease creating and establishing the horizontal property regime shall be executed by the owner or owners of the real property making up the regime and shall be recorded with the register of mesne conveyance or clerk of court of the county where such property is located. The master deed or lease shall express the following particulars:

(a) The description of the land whether leased or in fee simple, and the building or buildings in existence or to be constructed, if applicable, expressing their respective areas;

(b) The general description and number of each apartment, expressing its area, location and any other data necessary for its identification;

(c) The description of the general common elements of the property, and, in proper cases, of the limited common elements restricted to a given number of apartments, expressing which are those apartments;

(d) The value of the property and of each apartment, and, according to these basic values, the percentage appertaining to the co-owners in the expenses of, and rights in, the elements held in common; and

(e) The name by which the horizontal property regime is to be known followed by the words "HORIZONTAL PROPERTY REGIME."

(f) A description of the full legal rights and obligations, both currently existing and which may occur, of the apartment owner, the co-owners, and the person establishing the regime. The master deed of any horizontal property regime developed under the provisions of this chapter that contains any submerged land shall contain a notice of restriction stating that all activities on or over and all uses of the submerged land or other critical areas are subject to the jurisdiction of the South Carolina Department of Health and Environmental Control, including, but not limited to, the requirement that any activity or use must be authorized by the South Carolina Department of Health and Environmental Control. The notice shall further state that any owner is liable to the extent of his ownership for any damages to, any inappropriate or unpermitted uses of, and any duties or responsibilities concerning any submerged land, coastal waters, or any other critical area.

(g) In the event the owner of property submitting it for establishment of a horizontal property regime proposes to develop the property as a single regime but in two or more stages or proposes to annex additional property to the property described in the master deed, the master deed shall also contain a general description of the plan of development, including:

(1) The maximum number of units in each proposed stage of development;

(2) The dates by which the owner submitting such property to condominium ownership will elect whether or not he will proceed with each stage of development;

(3) A general description of the nature and proposed use of any additional common elements which the owner submitting property to condominium ownership proposes to annex to the property described in the master deed, if such common elements might substantially increase the proportionate amount of the common expenses payable by existing unit owners;

(4) A chart showing the percentage interest in the common elements of each original unit owner at each stage of development if the owner submitting property to condominium ownership elected to proceed with all stages of development.

(h) Any restrictions or limitations on the lease of a unit including, but not limited to, the amount and term of the lease.

SECTION 27

Mary,
I suppose the "Truth is in the Pudding."

I just wonder how many condo members that post on this site would take the time to tell us when construction started on their development, (approx), when the developer registered their Master Deed or did the association do it, when turn-over occurred.

I agree the language in a lot of these statutes is a problem. But that aside, since I know we have registration of our condo in 1981, construction clearly took at least two years before, doesn't that indicate the developer must be operating and collecting assessments prior to that date. In fact the statute makes reference to the funds he collects.

Now we have condos and HOA's by the thousands and and more coming on line daily and we can't seem to find out, on this site, not only when they were registered but also if they are registered at all.
Of course the question may not be relevant, but. it sure doesn't seem to be a problem for those posting here, if they are already in operation as a HOA or condo. Turn-over time is organized grab-ass as far as I can see. Seems obvious the only one that knows what is going on is the developer and that's why I would want to take a damn good lawyer with me, one that has a good rep in the field and one that has been told he is being hired to protect the association. I learned that from reading postings on this site.

Can anyone steer me to the new Maryland HOA laws that become effective in 2010?

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