Of course, any condominium building containing 35,000 square feet of more of gross floor area, excluding a parking garage, still must report is energy usage for 2024 by September 1, 2025.  Please see my prior blog post for details on the reporting program.

The benchmark reporting requirements are applicable to all existing buildings that meet the definition of a “Covered Building.”  This term means a commercial or multifamily building that has a gross floor area of 35,000 square feet or more, excluding the parking garage area.  The 35,000 square feet of gross floor area may be contained in a single building or two or more buildings that are served in whole or in part by the same electrical or gas meter, or the same heating and cooling system.  Significantly, a “Covered Building” expressly includes one or more buildings held in the condominium form of ownership with a combined gross floor area of 35,000 square feet or more, excluding the parking garage area, and governed by a single board of managers.  Condominium’s that meet this criteria are required to submit their energy use information for calendar year 2024 to the MDE by September 1, 2025.

Building owners create an account at the MDE website through the EPA Energy Star Portfolio Manager (“the ESPM”).  The registration of the building must include contact information for the building portfolio manager, the name of the organization, and the primary business type.  The data entered should consist of the building’s 2024 energy bills.  The ESPM account information can then be shared with the MDE.  The required data can also be obtained from the electric and/or gas supplier.  Such providers are required to provide the data within 90 days of receiving a request.  Providers are listed on the website, and can be engaged directly through the website.  The energy supplier can provide the information directly to an ESPM account, or can download the data to a building owner that can be uploaded by the building owner to the ESPM account.

While self-reporting will be accepted for this year for the reporting due on September 1, 2025 for calendar year 2024, beginning with the benchmark report for 2025, which will be due on June 1, 2026 third-party verification will be required, and will be required every five years thereafter.  Building owners will need to have a third-party verify the quality of their benchmarking reports before they submit them to the MDE.

There are exceptions for historic properties, schools, manufacturing buildings, agricultural buildings, hospitals and other lifecare facilities, and buildings containing confidential areas used by national defense agencies or contractors.  It is noteworthy that, during the 2025 session of the Maryland General Assembly, the MDE was directed to make specific recommendations for certain buildings including county-owned buildings, community colleges, emergency facilities, manufacturing buildings, and residential buildings, while giving consideration to tenants and condominium unit owners.  Accordingly, it is possible that changes may be made with regard to whether condominiums are included in “Covered Buildings.”  Presently, however, qualifying condominiums must meet the current reporting requirements.

The new legislation makes provision for financial hardship that makes full funding of reserve amounts not possible.  It provides that, by a two-thirds vote of the unit owners, it may be determined that “the condominium and the unit owners are experiencing a financial hardship that limits the ability to fund reserves that are required.” In that event, the condominium “may reasonably deviate from the reserve funding requirement,” and the “funding level under that requirement shall be at least the funding amount necessary for the purposes specified under Section 11-109.4(f)(3),” the requirements of which are described above.   Moreover, deviation from the reserve study budget requirements may only be implemented for one fiscal year, unless it is extended for an additional fiscal year by another two-thirds vote of the unit owners.  The board or other governing body is also required to make “good faith efforts” to resolve the financial hardship and resume funding reserves as required by the reserve study, and must “maintain detailed documentation of the good faith efforts,” such documentation to be made available for inspection a part of the condominium’s books and records.

The new legislation contains similar provisions that are applicable to homeowner associations and cooperatives.  It is presently awaiting the Governor’s signature.

Additionally, the new law removes the council’s disclosure requirement regarding knowledge of the presence of asbestos. Instead, it changes the council’s requirements under Section 11-135(g)(10) concerning disclosure of knowledge of health and building code violations to include asbestos.  This provision will now require:  “A statement as to whether the council of unit owners has
knowledge of any violation of the health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the condominium, including any violation of the health or building codes related to asbestos.”

Also added is requirement that disclosure with regard to asbestos now be made by the selling unit owner under new Section 11-135(a)(5)(vii), which provides that the unit owner must disclose knowledge “of the presence of asbestos in the unit, including a description of the location of the asbestos, and whether abatement has been performed in the unit during the occupancy of the owner.”

Finally, the new legislation amends Section 11-126 of the Condominium Act to require that, in an initial sale of a unit, the developer must provide “a statement as to whether the vendor has actual knowledge of the presence of asbestos, including a description of the location of the asbestos, whether abatement has been performed, and the date of any abatement.”

Currently, the only amendment permitted with only 60% approval is one that adds or repeals .provisions for the suspension of the use of parking or recreational facility common elements by a unit owner that is more than 60 days in arrears in assessment payments.

The Bill would also require and additional open agenda board meeting per year that provides an opportunity for unit owner comment.  Section 11-109(c) presently requires that condominium boards hold at least one such meeting each year.  House Bill 140 would amend this provision to require a board of directors to hold two such open agenda meetings per year.   This requirement would also apply to board meetings during the period when the developer is still in control of the condominium.

Additionally, the Bill would add a new provision to Section 11-116 requiring that, during the period of developer control, the condominium’s books and records be maintained “separate and apart from the developer or of any other person.”

The Bill proposes to add similar provisions to the Maryland Homeowner Association Act.  Please watch this blog for further developments on this legislative proposal.

Each year, The Best Lawyers in America designates a select group of individuals as “Lawyers of the Year” in high-profile specialties in large legal communities. Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant. Lawyers being honored as “Lawyer of the Year” are selected based on particularly impressive voting averages received during the exhaustive peer-review assessments that Best Lawyers^® conducts with thousands of leading lawyers each year.

To view the full list of selected attorneys selected and the practice areas in which they are recognized, click here.

https://www.baltimoresun.com/opinion/op-ed/bs-ed-op-0716-equal-protection-20200715-e46odlco7fhvtdzv4wy6kjzave-story.html

Once the unit owners take control, the bill would require the developer to provide notice of any bond provided by the developer to a government agency, and to provide advance notice of the developer’s intention to request that it be released from a bond.

The bill would also require, in all circumstances, that a condominium governing body meet at least two times per year.

The bill calls for similar requirements to be be applicable to homeowner associations.

The bills would add similar provisions to proposed new Section 11B-112.3 of the Maryland Homeowner Association Act, with similar amendments to the budget and funding requirements under Sections 11B-106.1 and 11B-112.2.  For cooperatives, new Section 5-6B-26.1 would be added to the Corporations and Associations Code.

HB207 concerning members qualified to vote to amend bylaws.

HB249 concerning responsibilities for insurance deductibles.

HB392 concerning dispute resolution procedures.

HB655 concerning denial of rental licenses for units with assessments in arrears.

HB825 concerning rights of holders of mortgages and deeds of trust in connection with declaration amendments.

HB826 concerning unit owner’s installation of electric vehicle charging equipment.

HB1037 concerning council of unit owner meeting requirements.

The enumeration of specific components to which the warranty is applicable — “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements” — has always left in question common element components that do not fall within those listed.  The proposed law would clarify this by expressly making it applicable “to all common elements.”  It would also go a step further by extending the warranty to any component that the council is required, under the governing documents, to maintain, repair or replace, even if it is defined as part of a unit.

The bill has been assigned to the Environmental and Transportation Committee, and will have its first hearing on February 12, 2019 at 1:00 pm.

There has been a trend among condominium developers to include language in the governing documents and sales contracts that changes the laws that are normally applicable as to when a claim accrues and when it must be brought.  The identical bills passed by the General Assembly would counter this trend by adding new Section 11-134.1 to the Maryland Condominium Act.  The House vote was 137-0, and the Senate vote was 43-2.

There has been a trend among condominium developers to include language in the governing documents and sales contracts that changes the laws that are normally applicable as to when a claim accrues and when it must be brought.  The time that a claim accrues establishes the commencement of the running of the applicable statute of limitations, within which a claim must be instituted.

In Maryland, the accrual of a cause of action is generally governed by the “discovery rule,” which provides that a claim accrues when the party discovers or knows of the cause of action, or should have discovered or known of it in the exercise of reasonable diligence.  Theoretically, this means that a cause of action for construction defects could be “discovered” many years after the project was built; including up to the 20-year statute of repose, after which claims are precluded.  As a result, the discovery rule is often a target for revision in condominium documents.

The general statute of limitations in Maryland for common law claims is three-years from accrual of the claim.  The statutory warranties have shorter limitations periods, and contractual warranties and guarantees may contain a different period of limitations.  Provisions in governing documents and sales contracts are sometimes used to create a shortened period of limitations for all causes of action, regardless of origin.

The condominium had recorded a lien against the owner’s unit, and had filed suit against the owner in the District Court.  Additionally, the board of directors invoked a “suspension-of-privileges” rule, which the board had adopted,  prohibiting unit owners who are delinquent in paying assessments from parking overnight in the complex and from using the community pool until the delinquency is resolved.  The unit owner filed suit in the Circuit Court challenging the rule and disputing the debt.  The District Court action was stayed while the Circuit Court considered the unit owner’s complaint.

The Circuit Court ruled that the unit owner could not dispute the debt in that court, but, instead, that issue must be heard in the District Court action filed by the condominium.  It further held that the board of directors did not have authority to adopt a rule denying a unit owner access to the common elements for failure to pay assessments.  Both parties appealed to the Court of Special Appeals, which affirmed those rulings in an unreported opinion dated April 21, 2016 (No. 1033, Sept. Term 2014).  Both parties sought review in the Court of Appeals.

The Court of Appeals affirmed based on its finding that the “suspension-of-privileges” rule constituted a taking of property; that is, an unlawful taking of the unit owner’s undivided percentage ownership interest in the common elements.  This was so despite the board’s broad rule making authority.  Indeed, the Court held that “[r]estricting a condominium unit owner’s access to communally-held property is a significant infringement of the owner’s property rights.”  The Court particularly noted that Section 11-108(a) of the Maryland Condominium Act provides that, “except as provided in the declaration, the common elements shall be subject to mutual rights of support, access, use, and enjoyment by all unit owners.”

With regard to the court in which the unit owner could dispute the debt, the Court of Appeals noted that Section 14-203(c)(1) of the Maryland Contract Lien Act allows a party to dispute the lien by filing an action in the circuit court.  However, the unit owner had not done so, and could not now claim circuit court jurisdiction of the debt dispute as part of their challenge to the “suspension-of-privileges” rule.

The new provisions will take effect on October 1, 2017.

The approved legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under the Maryland Homeowners Association Act.

The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under the Maryland Homeowners Association Act.

The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act.

The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under Section 11B-116 of the Maryland Homeowners Association Act.

The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act. Proposed new Subsection 14-804(e) of the Tax Article would also require notice by a homeowner association when a tax lien is imposed on any common area.  The final version included an amendment imposing the notice requirement on a declarant where the governing body of the association has not yet formed.

As to such claims, under the proposed law, the developer would be precluded from including provisions that:  (a) shorten the statute of limitations for filing claims; (b) waive application of the “discovery rule” for purposes of determining when a claim accrued; (c) require the council or a unit owner in an arbitration proceeding to assert a claim within a period shorter than the applicable statute of limitations; or (d) operate to prevent a council or unit owner from filing a law suit, initiating arbitration proceedings, or otherwise asserting a claim within the applicable statute of limitations.

A companion bill is pending in the Maryland Senate (SB 670).

Also under the bill, similar reserve study requirements would be established for the common areas in homeowner associations.

The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under Section 11B-116 of the Maryland Homeowners Association Act.

The proposed law would create a similar notice requirement for homeowner associations with respect to a sale of any common area in the community by adding new Section 11B-106.2 to the Maryland Homeowner Association Act. Proposed new Subsection 14-804(e) of the Tax Article would also require notice by a homeowner association when a tax lien is imposed on any common area.

The proposed legislation contains similar provisions to reduce the percentage vote required for bylaw amendments under Section 11B-116 of the Maryland Homeowners Association Act.

It is proposed that new Section 11-109.4 be added to the Maryland Condominium Act, and require that, within 90-days of the meeting at which the unit owners assume control of the council, a reserve study must be conducted of the common elements, and the condominium must conduct a reserve study every five years thereafter.  Condominiums established before October 1, 2017 that had a reserve study conducted on or after October 1, 2013 are required to undertake an additional reserve study five years after the previous one, and every five years thereafter.  Condominiums established before October 1, 2017 that have not had a reserve study undertaken on or after October 1, 2013 must conduct a reserve study on or before October 1, 2018, and every five years thereafter.

New Section 11B-112.3 would be added to the Maryland Homeowner Association Act so as to provide similar reserve study requirements for the common areas in homeowner associations.

The bill also would also add new Section 11B-111.7 to the Maryland Homeowners Association Act, which would permit a homeowner association to “include in its declaration, bylaws, rules, or recorded covenants and restrictions a provision that restricts or prohibits the smoking of tobacco products in any multi-unit dwelling or in the common areas.  A “multi-unit dwelling” is defined in the bill as “a town house, a row house, or any other individually owned dwelling unit that shares a common wall, floor, or ceiling with another individually owned dwelling unit.”

The proposed legislation would also amend Maryland Real Property Code Section 8-208 to permit landlords to include in written residential leases “a restriction or prohibition on smoking tobacco products within the dwelling unit or elsewhere on the premises.”

As to such claims, the developer may not include provisions that:

(a) Shorten the statute of limitations for filing claims;

(b) Waives application of the “discovery rule” for purposes of determining when a claim accrued;

(c) Requires the council or a unit owner in an arbitration proceeding to assert a claim within a period shorter than the applicable statute of limitations; and

(d) operates to prevent a council or unit owner from filing a law suit, initiating arbitration proceedings, or otherwise asserting a claim within the applicable statute of limitations.

The statute of limitations is the period in which are party is required to assert a claim after it accrues.  Maryland’s general period of limitations is three (3) years.  Statutory warranties applicable to condominium projects  have shorter periods of limitations as provided in each statute.

The “discovery rule” provides that a claim accrues, for limitations purposes, at the time it was discovered or should have been discovered in the exercise of reasonable diligence.  The proposed legislation is concerned with provisions that may result in the time in which a claim must be filed expiring before it is even discovered.

Where arbitration of claims is required by the condominium governing documents or the contract of sale, the proposed legislation would ensure that the normal period of limitations applies for asserting such claims.

The warranties under Section 10-203 are applicable to all new home sales, including condominiums.  They require that the project be free from faulty materials; constructed according to sound engineering standards; constructed in a workmanlike manner; and fit for habitation.  The warranties under Section 11-131 are applicable only to condominiums.  They require that the developer be responsible for the correction of defects in certain components of the common elements and the individual units.

Aside from back-up catcher, and assuming 12 pitchers, there are only two potentially open roster spots, and flexibility is restricted by the make-up of the players who are already here. The signing of Mark Trumbo results in maintaining the unsatisfactory status quo of having Hyun Soo Kim back in left-field, where both his range and are below average   The left-hand hitting Kim is also likely to require a platoon partner, although there is talk of giving him an opportunity against left-handers.  If, however, he requires a platoon, his platoon partner would take up another roster spot.  The acquisition of Seth Smith provides a left-hand hitting corner outfielder, who presumably would play opposite Kim in right field, and who brings  patience at the plate and OBP potential.  But he is a strict platoon hitter who requires yet another roster spot for his platoon partner.  And he is no more than a marginal defensive upgrade.

Right-hand hitting Joey Rickard, even though he has options, figures to have the inside track on one of the remaining spots. He hits lefthanders, and is a defensive upgrade over both Kim and Smith.  Plus he can back up Adam Jones in centerfield, and adds a sorely lacking speed dimension.  Rickard would provide one of the platoon partners needed for  Kim and  Smith, which leaves one spot for the other platoon partner.  There are a few possible scenarios:

1. Give Dariel Alvarez a chance to play right-field against left-hand pitching, joining Rickard as the other platoon partner. Everyone knows he has a cannon arm.  In fact, it is said that there are those in the organization who want to convert him to a pitcher as was done with Michel Givens.  Alvarez is also probably the best defensive in-house option. And his presence in right-field keeps Trumbo at DH and out of the outfield. But there are obvious questions as to whether Alvarez will ever be a consistent Major League hitter, as he is yet to be one at AAA. Using Alvarez also keeps power hitting Trey Mancini and Rule 5 pick, Aneury Tavarez off the team, which likely results in losing Tavarez entirely.
2. Play Trumbo in the outfield against left-hand pitching, with Mancini making the team as the right-hand hitting DH. That gets Mancini on the team, but, once again, recreates last year’s range-challenged alignment with Trumbo in the outfield. It also means that Alvarez and Tavarez do not make the team.
3. Let Tavarez, despite being a left-hand hitter, join Rickard as the other platoon partner. This provides the advantage of keeping a promising Rule 5 hitter, who has decent splits and appears to be an acceptable defensive outfielder. On the other hand, no one knows how he will play at the Major League level, especially playing primarily against left-hand pitching.
4. Sign a free agent. Of the few remaining, Angel Pagan or Michael Bourn would seem to be the obvious targets.  Pagan is a switch-hitter with a history of solid OBP, fielding and base-running.  Bourn provides speed and above average defense, but he would be another left-handed hitting outfielder on a team that already has Kim and Smith. Any acquired free agent would join Rickard as the other platoon partner. This would bring a veteran presence, and a chance to somewhat improve OBP and speed.   But it also means no Alvarez, Mancini or Tavarez.
5. Sign Matt Wieters as the second catcher and have Wellington Castillo and Wieters share catching duties and serving as the right-hand hitting DH, with Trumbo playing the outfield against left-handed pitching. Once again, this puts Trumbo’s defense in the outfield. However it creates an additional roster spot as result of making use of the second catcher. That would allow two of Alvarez, Mancini, Tavarez or a free agent to make the team.
6. Make a trade. The most discussed possibility involves the Met’s two expensive outfielders, Curtis Granderson and Jay Bruce. Of the two, Granderson best meets the Orioles’ needs for defense and speed, and he also has power. Brad Brach’s name has been floated as a possible trade chip. However, potential free agent bullpen additions to make up for the loss of Brach, like Boone Logan and Jerry Blevins, have signed elsewhere. If Brach is traded, bullpen help will likely have to come from within the organization. The addition of Granderson would be good for both the offense and defense, but it is also problematic due to the existing roster. Granderson is an everyday player in RF, and that pushes the newly-acquired Smith to the bench as a fifth outfielder, unless he beats out Kim for playing time. Once again, it would also mean no Alvarez, Mancini or Tavarez.

Interestingly, the parties had entered into a tolling agreement, which suspended the running of limitations during attempts to come to a resolution of the issues.   However, NVR successfully argued that the tolling agreement only suspended “statutes of limitations,” and did not toll a “contractual limitations period.”

(a)        Preparation and submission.—The council of unit owners shall cause to be prepared and submitted to the unit owners an annual proposed budget at least 30 days before its adoption.

(b)        Items required to be included. – The annual budget shall provide for at least the following items:

(1)  Income;

(2)  Administration;

(3)  Maintenance;

(4)  Utilities;

(5)  General expenses;

(6)  Reserves; and

(7)  Capitol items.

(c)        Adoption. – The budget shall be adopted at an open meeting of the council of unit owners or any other body to which the council of unit owners delegates responsibility for preparing and adopting the budget. 

(d)       Certain expenditures in excess of 15 percent of budgeted amount to be approved by amendment.  – Any expenditure other than those made because of additions which, if not corrected, could reasonably result in a threat to the health or safety of the unit owners for a significant risk of damage to the condominium, that would result in an increase in an amount of assessments for the current fiscal year of the condominium in excess of 15 percent of the budgeted amount previously adopted, shall be approved by an amendment to the budget adopted at a special meeting, upon not less than 10 days written notice to the council of unit owners.

(e)        Authority of counsel to obligate itself for certain expenditures unimpaired. – The adoption of a budget shall not impair the authority of the council of unit owners to obligate the council of unit owners for expenditures for any purpose consistent with any provision of this title.

(f)        Applicability to condominiums occupied and used solely for nonresidential purposes. – The provisions of this section do not apply to a condominium that is occupied and used solely for nonresidential purposes.

A Maryland appellate court has held that a design professional, who provides documents to be used by bidders on a public construction project, is protected from liability to a successful bidder for damages allegedly caused by the design professional’s negligence in preparing the design documents. In a dispute arising in the context of a public construction project involving a “design-bid-build” delivery method, the Maryland Court of Special Appeal determined that the “economic loss doctrine” absolutely precludes tort claims by contractors against design professionals on such projects where there is no direct contract between them.

Under the “economic loss doctrine,” a party cannot recover against another for negligence where there is no contract between them and the resulting harm is purely economic – that is, where there is no property damage, personal injury or the risk of personal injury.  Parties with no “contractual privity” generally owe no duties to each other in tort, such as a duty to comply with a recognized standard of care.   There is an exception, however, where the relationship between the parties is such that there is an “intimate nexus” that constitutes the equivalent of contractual privity.  In such cases, a party may owe duties to the other in tort despite the absence of a contract.

In Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP,[1] the Court of Special Appeals affirmed the dismissal of a contractor’s complaint against a design engineering firm, holding that the economic loss doctrine bars tort claims against a design professional in the absence of contractual privity, where the claims involve only economic loss.  The “privity equivalent” exception to the economic loss doctrine’s requirement of contractual privity – where an “intimate nexus” exists between the parties despite the absence of a contract — does not apply to cases involving design professionals in public construction projects.

Baltimore City contracted with a design engineering firm, Rummel Klepper & Kahl, LLP (“RK&K”) to provide design services with respect to the construction of improvements to a wastewater treatment plant.  Included within RK&K’s contract was the responsibility to produce construction drawings and other design documents for use by contractors in submitting bids for the project.   Balfour Beatty Infrastructure, Inc. (“BBI”), through its predecessor entity, was the successful bidder, and entered into a contract with the City.  Included within BBI”s responsibilities was the construction of denitrification filter cells – concrete tubs that hold wastewater that is to be treated – and related pipes and pipe support systems.

When the denitrification filter cells were tested, they were found to leak as a result of cracking in the expansion and contraction joints.  BBI claimed that the cracking resulted from alleged deficiencies in RK&K’s design.  Additionally, BBI claimed that RK&K’s design for the pipe support systems also suffered from alleged defects, and that these problems resulted in additional costs in excess of $10 million for work associated with correcting the deficiencies.

BBI sued RK&K in the Circuit Court for Baltimore City.  The Complaint contained three counts.  First it alleged professional negligence in breaching a duty to act with a reasonable degree of care, knowledge, diligence and skill ordinarily exercised by similarly situated design professionals.  Second it alleged a separate tort claim under Section 552 of the Restatement (Second) of Torts for failing to exercise reasonable care in preparing, supplying and communicating the design plans and specifications.  Finally, it alleged negligent misrepresentation, claiming that RK&K knew that the design was insufficient, but failed to warn BBI.

The Circuit Court granted RK&K’s motion to dismiss, and the Court of Special Appeals affirmed.  With regard to professional negligence, the economic loss doctrine was held to preclude BBI’s claim.  BBI argued that RK&K knew that contractors would rely on their design, and that this brought the case within the exception to the economic loss rule where the relationship between the parties involves an “intimate nexus” and thereby constitutes the equivalent of contractual privity.  However, the Court of Special Appeals declared that this exception does not apply in an action against a design professional by a contractor seeking purely economic damages on a public construction project.

With regard to BBI’s claim under Section 552 of the Restatement, the Court noted that this Section has been adopted in Maryland as satisfying the intimate nexus exception.  However, the Court determined that Section 552 did not apply in this case.  In particular, the Court emphasized that there was no pre-determined set of bidders for the project that would have identified contractors that would rely on the design documents.

As to the negligent misrepresentation claim, the Court again held the “extra-contractual concepts of duty” did not apply. There must be contractual obligations that give rise to a duty of care, or there must be damages other than purely economic loss.

Accordingly, in a public construction contract case, where a contractor asserts a claim against a design profession for negligence, Maryland law recognizes no exception to the requirement that the parties have a contractual relationship.

[1] 226 Md. App. 420, 130 A. 3d 1024 (2016).

In the Chesson case, five employees of the Baltimore Washington Conference of the United Methodist Church had complained of an odor emanating from the walls of their workplace.  An investigation found two types of mold in the walls — Aspergillus and Stachybotrys.  The employees filed claims with the Maryland Worker’s Compensation Commission, alleging medical injury as a result of “sick building syndrome.”  The Commission found that three of the five employees had suffered medical injury as result of exposure to mold, and awarded compensation.  The employer and its insurer took an appeal to the Circuit Court for Howard County, which initially held that testimony showing a causal connection between the mold exposure and the claimed illnesses would be admitted.  The employer and its insurer then took an appeal to the Court of Special Appeals, asserting that, before admitting the testimony, the Circuit Court should have held what is known as a Frye-Reed hearing, at which it is determined whether certain expert testimony will be admissible at trial where there is a question as to whether the evidence is generally accepted in the scientific community.

The Court of Special Appeals, in Montgomery Mutual Insurance Co. v. Chesson, 170 Md. App. 551 (2006), ruled that a Frye-Reed hearing was not necessary.   However, the Court of Appeals granted a petition for certiorari, and reversed the ruling, finding that a Frye-Reed hearing should have been held to determine if the medical community generally accepts the theory that mold exposure causes human illness, and whether the testifying physician’s method of diagnosis was proper.  396 Md. 12 (2006).

As a result, the Circuit Court for Howard County conducted a Frye-Reed hearing, after which it ruled that the testimony regarding a causal connection between the mold exposure and the employees’ illnesses was admissible.  The employer and its insurer then took a second appeal to the Court of Special Appeals, which reversed the decision of the Circuit Court, finding that “because there are sources that support and oppose [the testifying physician’s] theories and methodologies, and at least one that recognizes the relevant scientific field is undecided, we must conclude that [the testifying physician’s] theories and methodologies with regard to exposure to water damaged buildings, and the human health effects suffered by the [employees], are not generally accepted in the relevant scientific community.

  http://www.baltimoresun.com/news/opinion/oped/bs-ed-opening-day-20160403-story.html#nt=oft03a-1la1

http://www.baltimoresun.com/news/opinion/oped/bs-ed-republican-establishment-20160307-story.html

Each condominium, HOA and coop in Montgomery County is required to certify to the Commission that each of its board members has completed the required training, along with providing an annual report that includes the name and address of each board member, the date each member completed the training, the number of vacancies on the board, and the length of time each vacancy existed.

It should be noted that failure to complete the training course will not disqualify a board member from continuing to serve.  However, if a condominium, HOA or coop board member does not complete the mandatory education, the Commission may take legal action to enforce the training requirement.  Also, a Commission dispute resolution panel that is reviewing a dispute between a homeowner and a community association may consider a board member’s failure to complete the training in deciding the dispute.

The proposed amendment to Section 11-109(d)(4) of the Maryland Condominium Act would make clear that the right of a condominium council to sue on behalf of itself or two or more unit owners on matters affecting the condominium shall be preserved “notwithstanding any provision in the declaration, bylaws, or rules and regulations.” In other words, a developer cannot limit the council’s right to sue by including a provision in the governing documents, and any such provisions are void unenforceable.

Similarly, the proposed amendment to Section 11-109(d)(19) would establish that the right of a council of unit owners to enforce the implied warranties under Section 11-131 remains “notwithstanding any provision in the declaration, bylaws, or rules and regulations.” Accordingly, a provision in the governing documents that limits the council’s right to enforce the statutory warranties are, likewise, void and unenforceable.

Proposed new Section 11-134.1(b) would provide that any provision in the declaration, bylaws or initial contract of sale or other conveyance document shall be unenforceable if the provision (1) purports to shorten the statute of limitations applicable to any claim; (2) purports to waive the application of the “discovery rule” or other accrual date applicable to the claim; (3) requires that a claim be submitted to arbitration within a period shorter than the statute of limitations applicable to the claim; or (4) operates to prevent a unit owner or the council from asserting a claim within the applicable statute of limitations. The “discovery rule” is the rule of law that provides that a claim accrues, and the statute of limitations begins to run, when it is discovered or should have been discovered in the exercise of reasonable diligence. This prohibition would be applicable to any claim by the council or individual unit owners that alleges a failure to comply with (a) applicable building codes; (b) county-approved plans and specifications; (c) manufacturer’s installation instructions; (d) the implied warranties under Real Property Sections 10-203 and 11-131; or (e) industry standards for material and workmanship in effect when the building was constructed.

Finally, proposed new Section 11-134.1(c) would provide that any provision of a declaration, a bylaw, or initial contract of sale or other instrument of conveyance “that requires the council of unit owners to obtain a vote of unit owners as a precondition to the institution or maintenance of a lawsuit, an arbitration, a mediation, or a simialr proceeding shall be unenforceable unless the council of unit owners adopts the provision on a date following the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors.” Such a provision adopted by the unit owners shall be accomplished pursuant to a procedure that is in accordance with the requirements for amending the declaration or bylaws.

All of these proposed provisions would apply to residential condominiums only.

A similar bill passed the Maryland Senate during the 2015 legislative session, but never made it out of committee for a vote in the House. Senate and House versions introduced during the 2015 session failed to reach the floor of either chamber.

Here is a link to the full text of the bill:  http://mgaleg.maryland.gov/2016RS/bills/sb/sb0168f.pdf

http://www.baltimoresun.com/news/opinion/oped/bs-ed-murphy-dissent-20151224-story.html

In this age of soundbites and cynicism, when what passes for political discourse consists of polarizing platitudes and unctuous bromides, it is often difficult to remain mindful of the grand experiment that is the United States. Perhaps it would be useful to step back and take the time to be reminded of who we are as a people, and the manner in which we must work together in the formation of a more perfect union.

For this purpose, I suggest a few words written 71-years-ago by Frank Murphy. He may be far from a household name, but he served as Franklin Roosevelt’s attorney general before being appointed by FDR to the Supreme Court. While he would become the author of several notable majority opinions, it is what he said in a dissenting opinion that I find worthy of our reflection.

The case was Korematsu v. U.S. Fred Korematsu was a Japanese-American living in San Leandro, California in 1942 when the Roosevelt administration issued Executive Order 9066, which gave the military broad authority to designate areas from which “persons” were to be excluded, and to transport and house such excluded persons elsewhere. The order was used to ultimately force the removal of more than 100,000 “persons of Japanese ancestry” from the West Coast states to internment camps as a wartime security measure. Mr. Korematsu was among those ordered to leave his home and be relocated to an internment facility. He refused, citing the habeas corpus prohibition against unlawful detention, and his Fifth Amendment right not to be deprived of life, liberty or property without due process.

Mr. Korematsu was arrested and convicted. His conviction was affirmed on appeal, including affirmance by the nation’s highest court in a 6 to 3 vote. Writing for the majority, Justice Hugo Black emphasized that Mr. “Korematsu was not excluded from the Military Area because of hostility to him or his race. He was excluded because we are at war with the Japanese Empire, because the properly constituted military authorities feared an invasion of our West Coast and felt constrained to take proper security measures, because they decided that the military urgency of the situation demanded that all citizens of Japanese ancestry be segregated from the West Coast.”

Justice Murphy dissented from the ruling, which he felt sanctioned nothing less that “legalization of racism.” In doing so, he offered the following brief and eloquently stated defense of the ideals on which the nation was founded, and, in fact, are its reason for being: “Racial discrimination in any form and in any degree has no justifiable part whatever in our democratic way of life. It is unattractive in any setting, but it is utterly revolting among a free people who have embraced the principles set forth in the Constitution of the United States. All residents of this nation are kin in some way by blood or culture to a foreign land. Yet they are primarily and necessarily a part of the new and distinct civilization of the United States. They must, accordingly, be treated at all times as the heirs of the American experiment, and as entitled to all the rights and freedoms guaranteed by the Constitution.”

The worldwide threat of terrorism is obviously something that requires a response with our full resolve and utmost diligence. But when we are frightened into capitulation of our fundamental rights, we hand the terrorists victory over our ideals. Those rights and ideals are, after all, what, in our founding, set us apart from other nations. When we deny them to any of our citizens, we are all diminished. The benefits bequeathed to us in the Constitution come with the responsibility to maintain them for all of our people, and we must all be in that effort together.

These fundamentals of the American ideal should be a central part of our discussion of how best to maintain our security. A conversation that too often consists of bombastic appeals to the less honorable traits of human nature does our nation dishonor. Perhaps we would do well to read Justice Murphy’s words and think of who we really are.

Raymond Daniel Burke, a Baltimore native, is a principal in a downtown law firm. His email is rdburke@ober.com.

The owner of a penthouse unit sued Harborview in March 2010 for its repeated failures under the Condominium’s bylaws and Maryland law to maintain, repair, and replace the Building’s common elements, and Harborview compelled arbitration.  The unit owner won an arbitration award (“Award”) issued on November 24, 2011.  The award declared the unit unsafe for normal occupancy due to water infiltration and mold contamination, and ordered Harborview to perform work on the Building’s roof system, exterior façade, and HVAC ductwork to repair (1) defective conditions that had resulted in damage to the Unit and (2) defective conditions in the common elements throughout the entire Building.    In particular, the award ordered Harborview to replace the building’s roof system and repair its exterior façade in accordance with certain specifications contained in an engineering report – all within two years – to make the building watertight.  The exterior façade work specifically included a requirement to remove and replace all balcony railings at the building.   The arbitration award also required Harborview to pay $1,252,487 to the unit owner as compensatory damages.  This amount included $373,032 for two years of alternate living costs – the time period during which the roof system and exterior façade work was to be completed.

The Circuit Court for Baltimore City confirmed the arbitration award and entered final judgment in an order dated June 25, 2012, and required Harborview to complete the specific performance repairs by December 30, 2013.  Following an appeal by Harborview, the Maryland Court of Special Appeals affirmed the final judgment in an opinion dated October 21, 2013.

Harborview did not complete the required repairs by December 30, 2013 as ordered.  Following a three-day evidentiary hearing in May 2014, the Circuit Court found that, in additionally to failing to substantially complete the repairs on time, Harborview had also failed, and did not intend, to include the balcony railing replacement in the repair work it was then undertaking.  On July 24, 2014, the Circuit Court entered a memorandum and order finding Harborview in constructive civil contempt.  In view of the fact that the payment to the unit owner for alternative living costs had contemplated that the repairs would be completed by December 30, 2013, the Circuit Court found that alternative living expenses were continuing to accumulate.  As a sanction, and to coerce compliance, the Circuit Court ordered the following payments to be made to the unit owner:

$15,543 a month for an 18 month period of time from January 1st, 2014.  The payments were to be paid by the 25th of each month.  The arrearage since January 2014 was to be paid within 60 days.  If the work is not completed after 18 months from January 1st, 2014 the $15,543 per month shall be increased to $25,000 a month, again to be paid by the 25th of each month.  Harborview would be able to purge this contempt by completing the work as directed.

Following another appeal by Harborview, the Maryland Court of Special Appeals affirmed the contempt order in an opinion dated August 20, 2015.  Harborview had not made any of the payments directed to paid to the unit owner in the contempt order.  In an order entered on December 30, 2015, the Circuit Court entered a money judgment in the amount of $409,030.62 for amount due under the contempt order and unpaid; ordered that the remaining $200,000 due under the contempt order be accelerated and also entered as a money judgment; bringing the total money judgment against Harborview to $609,030.62.

Specifically, it is provided that the seller may elect to declare the contract void, leaving the seller the option to allow the purchaser additional time to obtain a loan commitment.  The purchaser is entitled to declare the contract void regardless of the seller’s position, upon providing the seller with written documentation from a lender evidencing the purchaser’s inability to obtain a loan in accordance with the terms of the contract.

In the event that either party properly declares the contract void, the seller must return any deposit paid, provided that the purchaser has otherwise complied with their obligations under the contract.  A deposit held by a licensed real estate broker is to be distributed in accordance with Section 17-505 of the Business & Occupations Article of the Annotated Code of Maryland

Under Section 11-135(c) of the Maryland Condominium Act, within 20 days after receiving a written request from a unit owner, the council of unit owners is required to provide a certificate containing information concerning the community that is required to be disclosed to a potential purchaser under that section of the statute.  The law presently provides that the council may charge the unit owner for its costs in furnishing the material.  The proposed legislation would limit this charge to the lesser of $175 or the actual costs.  Under Section 11B-106(b) of the Maryland Homeowners Association Act, a homeowner who is selling their property is required to furnish the potential purchaser with certain information about the community.  The proposed legislation would add a new subsection (c) to the statute that would require the homeowners association to provide that information upon request of the selling homeowner.  It would impose the same limit of the fee charged for providing required disclosure material.

The approved bill also provides for two additional fees, not to exceed $100, for an inspection of the unit, and “for ensuring completion of the inspection of the unit owner’s unit and preparation and delivery of the certificate.”  How the additional fee charged for  “the preparation and delivery of the certificate” differs from the original fee related the obligation to “furnish a certificate necessary to enable the unit owner to comply with” the disclosure requirements is somewhat of a mystery.  These same additional fees may also be charged by homeowner associations.

The big news, however, is the inclusion of the limit on liability of both councils of unit owners and homeowner associations.  As discussed in prior posts, in a unanimous opinion filed on April 30, 2012, the Maryland Court of Appeals, in the case of MRA Property Management, Inc., et al. v. Armstrong, established that provisions the Maryland Consumer Protection Act apply to the information contained in a condominium resale certificate, and a council of unit owners and property manager can be liable for unfair and deceptive trade practices if the information has a tendency to mislead the purchaser, even though they are not party to the sales contract, and even if they have otherwise complied with the condominium resale disclosure requirements contained in Section 11-135 of the Maryland Condominium Act.  The bill passed by both houses, if signed into law by the Governor, would modify this ruling, and significantly limit the council’s liability to “the amount paid for the certificate.”

The proposed legislation makes no distinction for “error and omissions” that are intentional or merely negligent.  That issue will likely have to be fought out in the courts.  The proposed new law would not, however, limit the liability of a management company for erroneous information in a resale certificate.  The versions of the bills need to be reconciled before a final approved version is produced.

Memorial Stadium’s general admission seats brought people together in the ’60s, despite racial strife

By Raymond Daniel Burke

Oct. 8, 1966, is for me, a day thick with enduring and vivid memories. It was a Saturday, the day of the first World Series game ever played in Baltimore, and I doubt that an autumn sun ever shined so brightly or felt so inviting as the one that fell that day on the baseball faithful of this town. We were nothing less than collectively giddy. In the most improbable fashion, the Orioles had beaten the favored Dodgers in the series’ first two games in Los Angeles, defeating the defending champions and their two Hall of Fame-bound pitchers on successive afternoons earlier that week.

For game three at Memorial Stadium, my brother and I had scored tickets in what typically was the general admission area of left field. A unique blend of Baltimore came together here, above the high green outfield wall, to share backless bench seats on a first-come, first-served basis. It was a relaxed place, and often one of the most racially and ethnically integrated spots in the city, providing a venue for personal observations on baseball and on life.

But on this day, all seats were reserved, and so we found ourselves half up the concrete bowl, sun-drenched and squinting toward the distant batter’s box, as Paul Blair awaited the next pitch in the fifth inning of a scoreless game. His swing made perfect contact, and the ball was launched on a soaring trajectory in our direction. As it rose, it soon became clear that it would land in our section. And so it did, just a few rows in front of us, sending the entire crowd into a state of utter exultation.

Paul Blair was the batting hero of a 1-0 win that glorious afternoon, which enabled the Orioles to go on to complete a euphoric four-game sweep of their first-ever World Series. But he was far more than that. He had arrived in 1965 from the minor leagues as a 21-year-old and claimed center field. He would remain there for 12 seasons, winning eight Gold Glove awards (and, for all of you sabermetricians, compiling a 39 WAR), while helping the Orioles become the winningest team of their era. Like several American League teams, the Orioles historically had few African-American players, and it was Paul Blair who became the team’s first homegrown black star.

During that 1966 World Series, the Maryland gubernatorial campaign was playing in the background. A hotly divided Democratic primary had been won by George P. Mahoney whose slogan — “your home is your castle, protect it” — was an obviously segregationist appeal to opponents of open housing. Just two years earlier, Alabama Gov. George Wallace had won 15 of Maryland’s 23 counties in the Democratic presidential primary with an openly segregationist platform. Racism then was by no means subtle. It was, in fact, overtly asserted, and an ever-present part of our community.

Paul Blair stepped into this racial chasm with an enormous smile and an equally broad talent. His cheerful personality and superb athleticism erased barriers that otherwise loomed imposingly over our relations. What he did on the field was simply astonishing. With an uncanny ability to chase down balls hit over his head, he played shallow, making plays on balls that routinely landed in front of other outfielders. On long flies, he would race to a spot, where he would then turn and wait for the ball he instinctively knew would arrive at that precise location. It was track-and-field physicality and principles of astrophysics combined and performed as a ballet. For baseball fans, it was a joyous spectacle.

Off the field, Paul Blair was full of humor, self-effacing and outwardly grateful for the privilege of playing Major League baseball. When he died the day after Christmas in 2013, it was a loss for both baseball and our community, and those who saw him play will never forget that smile or the graceful strides he used to turn a would-be double into just another out.

I think of him this opening day in particular against the backdrop of the racial tensions that have flared in places like Ferguson, and in light of our own police commissioner’s comments about the racially segregated communities in our city. I think of how far we have come since I sat in left field during so many games in the ’60s and how far we clearly still have to go. How some of our communities look as though the segregationists, who lost at the ballot box, may have still prevailed.

In those early days of the struggle for racial justice, when racism was as much express as implied, we found the ability to come together in the general admission area. There we were just people and baseball fans, equally fixated on the events transpiring on the heavenly expanse of lush green grass before us. And on that field, Paul Blair served up notice that talent and character could be universally embraced even in the face of inherent prejudice. It was baseball, after all, that led us toward integration. And, as a new season begins, I believe the game retains its capacity to unify us in mutual appreciation of the ability of humans to do extraordinary things, and, while doing so, allow us to see each other in entirely new way.

Raymond Daniel Burke, a Baltimore native, is a principal in a downtown law firm.

Under Section 11-135(c) of the Maryland Condominium Act, within 20 days after receiving a written request from a unit owner, the council of unit owners is required to provide a certificate containing information concerning the community that is required to be disclosed to a potential purchaser under that section of the statute.  The law presently provides that the council may charge the unit owner for its costs in furnishing the material.  The proposed legislation would limit this charge to the lesser of $175 or the actual costs.  The original bill set the had set the limit at $250, but the figure was amended before adoption.

An amendment also added language providing that, in addition to this fee, a condominium council is entitled to “a reasonable fee not to exceed $100 for an inspection of the unit owner’s unit,” and another fee, also not to exceed $100 “for ensuring completion of the inspection of the unit owner’s unit and preparation and delivery of the certificate” where delivery is made “within 14 days after a written request by a unit owner.”

But the most significant amendment by far is the inclusion of language providing that “[a]ny liability of the council of unit owners for an error or omission in the certificate shall be limited to the amount of the fees paid for the certificate.”  The language clearly would insulate the council from claims of negligence or negligent misrepresentation.  Moreover, it does not differentiate between an intentional or accidental omissions, thereby indicating that it is excusing fraud and unfair and deceptive trade practices as well.

As discussed in my prior blog post, the bill included similar provisions for homeowner associations, and similar amendments were included in the approved version.

Under Section 11-135(c) of the Maryland Condominium Act, within 20 days after receiving a written request from a unit owner, the council of unit owners is required to provide a certificate containing information concerning the community that is required to be disclosed to a potential purchaser under that section of the statute.  The law presently provides that the council may charge the unit owner for its costs in furnishing the material.  The proposed legislation would limit this charge to the lesser of $250 or the actual costs.

Under Section 11B-106(b) of the Maryland Homeowners Association Act, a homeowner who is selling their property is required to furnish the potential purchaser with certain information about the community.  The proposed legislation would add a new subsection (c) to the statute that would require the homeowners association to provide that information upon request of the selling homeowner.  It would impose the same limit of the fee charged for providing this material; i.e., the lesser of 250 or the actual cost.

The information required to be furnished in connection with the resale of a condominium unit under Section 11-135(b) of the Maryland Condominium Act is as follows:

i) A statement disclosing the effect on the proposed conveyance of any right of first refusal or other restraint on the free alienability of the unit other than any restraint created by the unit owner;

(ii) A statement setting forth the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner;

(iii) A statement of any other fees payable by the unit owners to the council of unit owners;

(iv) A statement of any capital expenditures approved by the council of unit owners planned at the time of the conveyance which are not reflected in the current operating budget disclosed under item (vi) of this item;

(v) The most recent regularly prepared balance sheet and income expense statement, if any, of the condominium;

(vi) The current operating budget of the condominium including details concerning the reserve fund for repair and replacement and its intended use, or a statement that there is no reserve fund;

(vii) A statement of any judgments against the condominium and the existence of any pending suits to which the council of unit owners is a party;

(viii) A statement generally describing any insurance policies provided for the benefit of unit owners, a notice that copies of the policies are available for inspection, stating the location at which the copies are available, and a notice that the terms of the policy prevail over the description;

(ix) A statement as to whether the council of unit owners has knowledge that any alteration or improvement to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, bylaws, or rules or regulations;

(x) A statement as to whether the council of unit owners has knowledge of any violation of the health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the condominium;

(xi) A statement of the remaining term of any leasehold estate affecting the condominium and the provisions governing any extension or renewal thereof; and

(xii) A description of any recreational or other facilities which are to be used by the unit owners or maintained by them or the council of unit owners, and a statement as to whether or not they are to be a part of the common elements;

(5) A statement by the unit owner as to whether the unit owner has knowledge:

(i) That any alteration to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, bylaws, or rules and regulations;

(ii) Of any violation of the health or building codes with respect to the unit or the limited common elements assigned to the unit; and

(iii) That the unit is subject to an extended lease under § 11-137 of this title or under local law, and if so, a copy of the lease must be provided; and

(6) A written notice of the unit owner’s responsibility for the council of unit owners’ property insurance deductible and the amount of the deductible.

The information required to be furnished in connection with the resale of a property that is subject to a homeowners association under Section 11B-106(b) of the Maryland Condominium Act is as follows:

(1) A statement as to whether the lot is located within a development;

(2) (i) The current monthly fees or assessments imposed by the homeowners association upon the lot;

(ii) The total amount of fees, assessments, and other charges imposed by the homeowners association upon the lot during the prior fiscal year of the homeowners association; and

(iii) A statement of whether any of the fees, assessments, or other charges against the lot are delinquent;

(3) The name, address, and telephone number of the management agent of the homeowners association, or other officer or agent authorized by the homeowners association to provide to members of the public, information regarding the homeowners association and the development, or a statement that no agent or officer is presently so authorized by the homeowners association;

(4) A statement as to whether the owner has actual knowledge of:

(i) The existence of any unsatisfied judgments or pending lawsuits against the homeowners association; and

(ii) Any pending claims, covenant violations actions, or notices of default against the lot; and

(5) A copy of:

(i) The articles of incorporation, the declaration, and all recorded covenants and restrictions of the primary development, and of other related developments to the extent reasonably available, to which the purchaser shall become obligated on becoming an owner of the lot, including a statement that these obligations are enforceable against an owner’s tenants, if applicable; and

(ii) The bylaws and rules of the primary development, and of other related developments to the extent reasonably available, to which the purchaser shall become obligated on becoming an owner of the lot, including a statement that these obligations are enforceable against an owner and the owner’s tenants, if applicable.

http://www.baltimoresun.com/news/opinion/oped/bs-ed-mikulski-intern-20150307-story.html

The proposed amendment to Section 11-109(d)(4) of the Maryland Condominium Act would make clear that the right of a condominium council to sue on behalf of itself or two or more unit owners on matters affecting the condominium shall be preserved “notwithstanding any provision in the declaration, bylaws, or rules and regulations.” In other words, a developer cannot limit the council’s right to sue by including a provision in the governing documents, and any such provisions are void unenforceable.

Similarly, the proposed amendment to Section 11-109(d)(19) would establish that the right of a council of unit owners to enforce the implied warranties under Section 11-131 remains “notwithstanding any provision in the declaration, bylaws, or rules and regulations.” Accordingly, a provision in the governing documents that limits the council’s right to enforce the statutory warranties are, likewise, void and unenforceable.

Proposed new Section 11-134.1(b) would provide that any provision in the declaration, bylaws or initial contract of sale or other conveyance document shall be unenforceable if the provision (1) purports to shorten the statute of limitations applicable to any claim; (2) purports to waive the application of the “discovery rule” or other accrual date applicable to the claim; (3) requires that a claim be submitted to arbitration within a period shorter than the statute of limitations applicable to the claim; or (4) operates to prevent a unit owner or the council from asserting a claim within the applicable statute of limitations. The “discovery rule” is the rule of law that provides that a claim accrues, and the statute of limitations begins to run, when it is discovered or should have been discovered in the exercise of reasonable diligence. This prohibition would be applicable to any claim by the council or individual unit owners that alleges a failure to comply with (a) applicable building codes; (b) county-approved plans and specifications; (c) manufacturer’s installation instructions; or (d) other applicable construction industry standards.

Finally, proposed new Section 11-134.1(c) would provide that any provision of a declaration, a bylaw, or initial contract of sale or other instrument of conveyance “that requires the council of unit owners to obtain a vote of unit owners as a precondition to the institution or maintenance of a lawsuit, an arbitration, a mediation, or a simialr proceeding shall be unenforceable unless the council of unit owners adopts the provision on a date following the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors.” Such a provision adopted by the unit owners shall be accomplished pursuant to a procedure that is in accordance with the requirements for amending the declaration or bylaws.

A similar bill passed the Maryland Senate during the 2014 legislative session, but never made it out of committee for a vote in the House.

All of these proprosed provisions apply only to residential condominiums.

Section 11-111 mandates that each unit owner must receive a copy of any proposed rule or regulation.  The notice must inform the unit owners that they are entitled to submit written comments on the proposed rule, and must provide the proposed effective date of the proposed rule.  Before the condominium’s board or other governing body votes on a proposed rule, there must be an open opening at which unit owners, or their tenants, can comment on the proposed rule.  A written notice for such a meeting must be received by the unit owners at least 15 days prior to the meeting date.

Their must be a quorum of the condominium’s board or other governing body present at the meeting, and adoption of the proposed rule requires a majority vote. The rule becomes final unless, within 15 days of the vote,  at least 15 percent ofthe unit owners file a petition for a special meeting on the rule.  In that case, the unit owners must again receive 15 days written notice of the special meeting.  If the meeting is attended by a quorum of all unit owners, the unit owners present are entitled to vote to disapprove the proposed rule.  The rule is disapproved if 50 percent of the unit owners present at the special meeting disapprove the rule, and those owners represent 33 percent of the total votes in the condominium.

The precise language of the statute is contained in Section 11-109.2(d):  “Any expenditure made other than those made because of conditions which, if not corrected, could reasonably result in a threat to the health of safety of the unit owners or a significant risk of damage to the condominium, that would result in an increase in an amount of assessments for the current fiscal year of the condominium in excess of 15 percent of the budgeted amount previously adopted, shall be approved by an amendment to the budget adopted at a special meeting, upon not less than 10 days written notice to the council of unit owners.”

This requirement does not apply to commercial condominiums.

http://www.baltimoresun.com/news/opinion/oped/bs-ed-mckenzie-elliott-20140805,0,422079.story

“Ober Kaler’s practice is co-chaired by John Morkan and the ‘honest and intelligent’ Joseph Kovars, with a further 16 lawyers spread across its Baltimore and Washington DC offices giving the firm a national scope. Most of its recent work has been government related, such as advising public authorities on heavy highway construction, or assisting private sector clients on government bid protests and PPP projects. Universities and colleges have been a stable client base, though the firm serves all industry sectors, with a strong emphasis on contentious matters. The ‘excellent construction litigation department’ represents private owners in building and construction defect claims, and acts for developers, public authorities, and construction companies. Raymond Burke is ‘an expert among experts in his field’, and has special knowledge of condominium association litigation. The firm is acting as counsel to the US Department of Justice, Antitrust Division andothers regarding the review and analysis of the design and construction of an $850m expansion of a Mexican brewery. It also defended Diamond State Port Corporation in a dispute brought by the contractor arising from alleged breach of contract in connection with the rehabilitation of berth four at the Port of Wilmington. Firm chair John Wolf and Barbara Werther are additional key contacts.”

Raymond Daniel Burke Selected for Maryland Super Lawyers 2014

Prominent Construction Attorney Ranks Among State’s Super Lawyers for Eighth Consecutive Year

BALTIMORE: June 19, 2014. The law firm Ober|Kaler announced today that, for the eighth consecutive year, principal Raymond Daniel Burke has been selected for inclusion in Maryland Super Lawyers 2014 in the Construction Litigation category.  Mr. Burke has been selected every year since Super Lawyer rankings were created in 2007. He is one of the region’s top construction and real estate development lawyers, and has more than thirty years of experience in matters relating to condominium and other multi-use development matters.

Some of his more notable cases include the Grey Rock Flats and Grey Rock Villas condominiums in Pikesville, Green Haven Condominium in Bel Air, Fairway Courtyards in Woodstock, the Club at McDonough Township in Owings Mills, Esprit Condominium in Germantown, and several of the Sea Colony high-rises in Bethany Beach.

Mr. Burke is the author of a popular legal blog: condobaker.wpengine.com. He is a frequent speaker at programs hosted by Lorman Education Services and National Business Institute and is a featured Opinion/Commentary writer with The Sun. He is an author of a chapter in in the Maryland Construction Law Deskbook published by the Construction Law Section of the Maryland Bar Association. Active in professional and community groups, Mr. Burke is an alumnus of Leadership Baltimore County and former chair of the Metropolitan Leadership Conference. He is a member of the American and Maryland State Bar Associations’ Sections on Litigation, Construction Law and Business Law.

Mr. Burke holds degrees from the University of Maryland School of Law (J.D., 1978) and The Johns Hopkins University (B.A., 1974). He is a resident of Monkton, Maryland.

About Ober|Kaler

Ober|Kaler is a national law firm providing integrated regulatory, transactional, and litigation services to financial, health care, construction, and other business organizations. The firm has more than 125 attorneys, and offices in Baltimore, Washington, D.C. and Falls Church.

Common element warranties in condominiums created prior to October 1, 2010 are always governed by the original provision, regardless of when the unit owners took control.  Common element warranties in condominiums created after October 1, 2010 may be governed by either the original provision or the amendment.  If three years after transfer of title to the first unit is later than two years after the unit owners take control, the original provision applies.  If, however, two years after the unit owners take control is later than three years after transfer of title to the first unit, the amendment applies.

Section 11-131(d) provides for “an implied warranty on the common elements from developer to the council of unit owners,” that is also expressly in addition to the implied warranties provided in Section 10-203. Like the warranty on the units, this common element warranty is also applicable only to specific components, consisting of “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural components.” The reference to “external and supporting walls” encompasses not only the wall framing members, but cladding systems as well. The inclusion of “structural components” broadens the application of the warranty to any common element component that is part of the building’s structure and framing, as well as community amenities that have a structural capacity, such as paving, pools, sport courts, curbs, steps and sidewalks, and drainage areas. Arguably, the specification of these components as being subject to the common element warranty requires that such components be defined as part of the common elements in any condominium regime. Otherwise, the full scope of the Legislature’s intent in providing the warranty could be negated by excluding some of these components from inclusion in the common elements. Indeed, the statute presumes that these specified components will be among the common element in every condominium.

The common element warranty provides “that the developer is responsible for correcting any defect in materials or workmanship, and that the specified common elements are within acceptable industry standards in effect when the building was constructed.”

It is important to note that notice of a defect must be given to the developer during the warranty period, so identifying the proper time during which the warranty is in effect is pertinent to satisfying the notice requirement.

The original claim concerned the failure of the council of unit owners to correct defects in the common elements of the roof, exterior façade and HVAC system.  These defects were alleged to have permitted water intrusion through the exterior envelope and into the Plaintiff’s unit, resulting in damage to building components, interior finishes and furnishings and other personal property, along with microbial contamination, which rendered the unit uninhabitable.

The case was tried over five days before a three-judge arbitration panel in September 2011.  In November 2011, the arbitration panel awarded the Plaintiff cash damages in the amount of $1,252,487, representing the cost to repair damage to the unit and to remediate the environmental contamination, along with alternative living expenses and other related costs.  The panel also issued a specific performance award directing the Condominium to undertake an identified scope of work to repair to the roof, exterior façade and HVAC system. The panel ordered that the HVAC repairs be completed within 60 days, and that the remaining building repairs be completed within two years

On June 5, 2012, the Circuit Court for Baltimore City confirmed the arbitration award in its entirety, and a judgment was entered ordering the common element repairs to be completed by December 30. 2013.  The condominium took an appeal to the Maryland Court of Special Appeals, which affirmed the decision in an opinion dated July 1, 2013.  A subsequent petition for certiorari by the condominium to have the case considered by the Maryland Court of Appeals was denied.

Although the condominium commenced repairs, the project remains significantly incomplete beyond the court-mandated deadline.

Senate Bill 274 would have required that residential property managers for condominiums, cooperatives and homewoner associations be registered with the Maryland Department of Licensing and Regulation.  Unlike House Bill 10, which called for a licensing process, the Senate proposal would have the Department issue registration certificates that would be renewed every two years.  An applicant, in addition to paying a registration fee, would be requried to identify all of the communities that they mangage, and certify that they are covered by fidelity insurance.  The Department would be authorized to establish other requirements for registrants, and to investigate complaints alleging a failure to comply with the applicable provisions, or refer complaints to the State’s Attorney’s Office..  Failures to comply could result in misdemeanor and fine.

House Bill 10 would have amended the Business Occupations and Professions Article of the Maryland Annotated Code to create a State Board of Common Ownership Community Managers in the Department of Licensing and Regulation to issue licenses to the managers of “common ownership communities.  Such a license would be required before any individual would be permitted to provide property management services to communities in the State.  Applicants would be required to complete a training program and pass an examination, along with paying a licensing fee.  The licenses would be issued for two years, and would be renewable upon submission of a renewal applciation and fee.

The House bill would have also required that any property manager entering into a contract to provide management services to a condominium, cooperative or homeowners association file proof of a fidelity bond, theft insurance, or other comparable written insurance as may be required by the proposed State Board of Common Ownership Community Managers.  The bond or insurance would be required to provide coverage in the lesser amount of $2 million or the highest aggregate amount of the operating and reserve balances of the community under the contract during the prior three months.

The proposed new law would also have precluded limits on the rights of condominium councils or individual unit owners to bring claims relating to an alleged failure of the developer to comply with building codes, county approved plans and specifications, product manufacturer’s installation instructions, and other construction industry standards.  Both the Senate and House bills  proposed the enactment of new Section 11-134.1 in the Maryland Condominium Act, and prohibit provisions designed to prevent the filing of a claim within the applicable period of limitations or prevent claims from accruing pursuant to the “discovery rule.”  The new law would have also precluded provisions requiring a vote of the unit owners approving the initiation of a claim, unless such a requirement is adopted after the unit owners assume control of the community from the developer.

Presently, Section 11B-106 of the Maryland Homeowners Association Act provides that certain information be provided to a prospective purchaser in the community, and that specific information be included in the contract of sale.  The new law, as proposed by both houses, would require that, within twenty days of receiving a written request from the selling owner, the homeowners association must provide the information necessary for the owner to comply with the disclosure requirements.

As noted above, both bills would also limits the fee that could be charged to the owner for preparing the information to the actual cost up to a maximum amount, and would impose that same limit in charges by condominium councils of unit owners for furnishing the re-sale disclosure information they are required to provide under Section 11-135 of the Maryland Condominium Act.

The specific items and information required to be provided in connection with re-sale of a unit would remain the same as presently contained in Section 11-135(a) without change.  However, when a seller submits a written request to the council of unit owners for the required information to be disclosed to a purchaser, the council would have only seven days, rather than the current 20 days, to provide the disclosure information.  The seven-day period in which the purchaser can rescind the contract after receipt of this information would remain the same.

The bill would also amend Section 11-135 to require that the purchaser be “given notice of any changes in the mandatory fees and payments exceeding 10% of the amount previously stated to exist and any other substantial and material amendments to the disclosures after they become known to the seller.”  In other words, the seller must be apprised of significant changes in the disclosure information that occurs after it is originally provided to them.  The purchaser would have three days following receipt of the revised information to cancel the contract.

If information that is required to be disclosed in not provided at least seven days before the contract is entered into, the purchaser would have seven days to rescind the contract after the information is received.

Disclosure requirements for condominiums with less seven units would now be codified in a new Section 11-135.1, with the same changes provided for larger condominiums.

With regard to the initial sale of new condominium units, the bill would amend Section 11-126 to require a developer to also give “notice of any changes in the mandatory fees and payments exceeding 10% of the amount previously stated to exist and any other substantial and material amendments to the public offering statement after they become known to the vendor.”  A purchaser would have a new right of rescission within three days of receiving any such revised information.

As with re-sales, if information that is required to be disclosed in not provided at least seven days before the contract is entered into, the purchaser would have seven days to rescind the contract after the information is received.

Under the proposed law, “financial hardship” means:  (1) a reduction in household income that exceeds 50%; (2) an increase in household expenses of more than 33%; (3) the death of the unit owner or their spouse; (4) a change in location of the unit owner’s permanent employment, or permanent employment of the unit owner’s spouse, 100 miles of more from the unit; (5) military deployment of 12 months or more of the unit owner or their spouse; or (6) divorce of the unit owner.

The request for waiver must be made in writing, and include evidence that (1) the unit owner meets one of the definitions of “financial hardship;” (2) the unit is the owner’s primary residence; (3) the unit owner was a resident of Maryland at the time of the “financial hardship;” and (4) the appraised value of the unit is less than 90% of the amount owed.

The bill proposes that the process for granting or denying a request for waiver must be included in the declaration, bylaws, or rules of the condominium.  Condominium’s in existence before October 1, 2014, when the law is proposed to take effect, must amend its declaration, bylaws or rules for this purpose by April 1, 2015.

Where a condominium denies a request for waiver, the new would require that notice of the denial be provided to the unit owner, including the specific reasons for the denial.

However, a companion bill in the House of Delegates, HB 259 received an unfavorable vote in the House Environmental Matters Committee.  It remains to be seen whether compromise between the two houses on a joint bill can be accomplished.

The proposed amendment to Section 11-109(d)(4) of the Maryland Condominium Act would make clear that the right of a condominium council to sue on behalf of itself or two or more unit owners on matters affecting the condominium shall be preserved “notwithstanding any provision in the declaration, bylaws, or rules and regulations.”  In other words, a developer cannot limit the council’s right to sue by including a provision in the governing documents, and any such provisions are void unenforceable.

Similarly, the proposed amendment to Section 11-109(d)(19) would establish that the right of a council of unit owners to enforce the implied warranties under Section 11-131 remains “notwithstanding any provision in the declaration, bylaws, or rules and regulations.”  Accordingly, a provision in the governing documents that limits the council’s right to enforce the statutory warranties are, likewise, void and unenforceable.

Proposed new Section 11-134.1(b) would provide that any provision in the declaration, bylaws or initial contract of sale or other conveyance document shall be unenforceable if the provision (1) purports to shorten the statute of limitations applicable to any claim; (2) purports to waive the application of the “discovery rule” or other accrual date applicable to the claim; (3) requires that a claim be submitted to arbitration within a period shorter than the statute of limitations applicable to the claim; or (4) operates to prevent a unit owner or the council from asserting a claim within the applicable statute of limitations.  The “discovery rule” is the rule of law that provides that a claim accrues, and the statute of limitations begins to run, when it is discovered or should have been discovered in the exercise of reasonable diligence.  This prohibition would be applicable to any claim by the council or individual unit owners that alleges a failure to comply with (a) applicable building codes; (b) county-approved plans and specifications; (c) manufacturer’s installation instructions; or (d) other applicable construction industry standards.

Finally, proposed new Section 11-134.1(c) would provide that any provision of a declaration, a bylaw, or initial contract of sale or other instrument of conveyance “that requires the council of unit owners to obtain a vote of unit owners as a precondition to the institution or maintenance of a lawsuit, an arbitration, a mediation, or a simialr proceeding shall be unenforceable unless the council of unit owners adopts the provision on a date following the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors.”  Such a provision adopted by the unit owners shall be accomplished pursuant to a procedure that is in accordance with the requirements for amending the declaration or bylaws.

All of these proprosed provisions apply only to residential condominiums.

During the 2009 legislative session, the Maryland General Assembly took action on the issue in direct response to two Court of Appeals decision concerning the allocation of responsibilities for property damage between a condominium council and the individual unit owners.  The revised law established that the condominium master insurance policy must cover all of the building elements, including the units, except for improvements installed in the unit by the owners after construction.  However, where the damage originates in a unit, that unit owner is responsible for any insurance deductible under the council’s policy, up to a maximum of $5,000.  The new law amended Section 108.1 to make it specifically subject to the provisions of Section 11-114.  It then amended Section 11-114 to make clear that the council of unit owners is required to maintain insurance “[f]or property and casualty losses to the common elements and the units, exclusive of improvements and betterments installed in the units by the unit owners other than the developer.”  The amended law also imposes the deductible requirement on any individual owner in whose unit the damage originates, regardless of whether the bylaws so provide, up to a maximum of $5,000. Otherwise, the deductible remains a common expense.  The result is that condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents.  If damage originates in the unit, the owner is responsible for the insurance deductible up to a maximum of $5,000.

The walk home from school is what I remember most.  It should have been a lighthearted schoolboy stroll for a sixth grader on a cloudy and mild Friday in late November, filled with visions of the weekend ahead and the long Thanksgiving holiday just a few days away.  Instead, it was a mournful plodding along a route I had walked daily, yet, on that afternoon, my surroundings seemed somehow alien.  The remnants of crisp fallen leaves crackling under foot served as constant reminders that, with each step, my childhood was palpably draining out of me and being left behind to evaporate into memory. I felt it tug at me as I trudged forward, but I dared not turn around to take one final look, for fear of the heartbreak the sight would surely induce.  Better to keep my eyes ahead and march on stoically into the inevitable that would be all too vividly displayed on my home’s television screen.

            It is not my intent to make more of John F. Kennedy than he was, or imbue him with some idealized cloak of perfection.  But if you were of a certain impressionable age, and disposed to dream of the grand things you and your compatriots might accomplish, President Kennedy was a charming catalyst for youthful imagination.  The sickly Boston boy had who spent so many weeks in bed devouring history books grew up to demonstrate that knowledge was cool, words could be used powerfully, and  intellect offered the path to changing the world.  The child of privilege, who became a genuine war hero in the same theater where my own father had served, showed us that service to others and to county is honorable and gives meaning to who we are as a people.

Commentators often make reference to the inspiration found in the challenges that he spoke of in his eloquent inaugural address, but for me, the clincher came a few months later when he asked us to commit ourselves to sending astronauts to the moon before the decade was out.  It was a proposal that was stunningly outlandish, totally unfathomable, and absolutely wonderful.  We had found someone who was leading, not just forward, but into a future of possibilities that were limited only by the breath of our imagination, intelligence and determination.

On consecutive days in June 1963, President Kennedy gave two speeches that defined for many of us the role of our generation in the future to come.  Delivering the commencement address at American University, the President made the case for eradicating the threat of nuclear war from the world and maintaining peace, which, he noted, is, “in the last analysis, basically a matter of human rights: the right to live out our lives without fear of devastation; the right to breathe air as nature provided it; the right of future generations to a healthy existence.”  In doing so, he reminded us that “we all inhabit this small planet.  We all breathe the same air.  We all cherish our children’s futures.  And we are all mortal.”

The following night, speaking from the White House, the President announced that he would submit a civil rights act to Congress.  Addressing what he deemed “a moral issue” and one “as old as the scriptures,” he implored us all to examine our conscience about the events that had been occurring throughout the south, and then asked the simple question of “who among us would be content to have the color of their skin changed and stand in” the place of a black American.  With that, he had made it self-evident that segregation was as immoral as it was unconstitutional.

The power of those two speeches enlisted us as dedicated foot soldiers in the causes of peace, and the final removal of the stain of racial injustice from our nation’s character.  It was heady stuff that had the capacity to fill a young life with profound meaning and purpose. All things seemed possible if we only followed his call.  We were literally going to the moon and beyond.

            As I walked home that day in brooding and stunned silence, trying to comprehend the unimaginable, hope and possibility had been replaced in my mind with rage and despair.  The late afternoon shadows hammered at my heart and fell across the familiar streets like a foreboding shroud.  I passed through my neighborhood as if seeing it for the last time.  All of those innocent rights of passage I had experienced there, that had so comfortably formed the fabric of everyday life, seemed just faded memories that terrible afternoon.  Everything was different.  Everything had changed.  The simplicity and security of all that I had come to know and trust had been obliterated in an instant in Dallas.

Both the Maryland Senate and House of Delegates passed similar bills, but the House version had included cooperative housing corporations within the scope of the legislation.  The bills were reconciled in committee, with cooperatives being eliminated in accordance with the Senate version.  Late amendments added “reasonable costs,” and provided that costs and fees not exceed the amount of the principal amount of the unpaid assessment.  The legislation expressly provides that these provisions do not preclude the use of other means to enforce a lien other than foreclosure.  Accordingly, suits for money judgments can still be pursued.  The Governor signed the bill on May 16, 2013.  The law expressly provides that it is “to apply only prospectively and may not be applied or interpreted to have any effect on or application to any lien filed before the effective date.”

The Court of Appeals expressly held that such medical theories are not generally accepted as reliable in the scientifc community, and, therefore, do not meet the Maryland criteria for the admissibility of scientifc evidence as established in Reed v. State, 283 Md. 374 (1978) and Frye v. United States, 293 F. 1013 (1923), which has become known in Maryland as the Frye-Reed standard.  The Court further concluded that, in fact, the scientific community is uncertain as to the techniques and conclusions of the practitioner of differenetial diagnosis in this case.

Mold exposure in damp buildings has become an increasing subject of litigation over the last decade. Much of the litigation involves damage to building components as a result of microbial growth, and the protocols that are required for its safe removal, which arises primarily from the recognition that molds are allergins that can effect the heath of certain individuals.  It is widely recognized that susceptible building occupants can experience various allergic-type symptoms when exposed to damp building conditions, and individuals with pre-existing respiratory conditiions or immune dificiencies can sometime develop respiratory disease.  However, while the need to take specific precautions when dealing with mold contamination is accepted,  litigation related to medical illness has been controversial due to the difficulties of establishing a causal connection between the symptoms and the exposure.  The Maryland Court of Appeals has now determined that, in Maryland, such a connection cannot be established through the use of differential diagnosis techniques.

Both the Maryland Senate and House of Delegates passed similar bills, but the House version had included cooperative housing corporations within the scope of the legislation.  The bills were reconciled in committee, with cooperatives being eliminated in accordance with the Senate version.  Late amendments added “reasonable costs,” and provided that costs and fees not exceed the amount of the principal amount of the unpaid assessment.  The legislation expressly provides that these provisions do not preclude the use of other means to enforce a lien other than foreclosure.  Accordingly, suits for money judgments can still be pursued.

Previously,  a condominium’s board of directors could meet in closed session only for the following purposes:  (1) Discussion of matters pertaining to employees and personnel; (2) protection of privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) consultation with legal counsel on legal matters; (4) consultation with staff personnel, consultants, attorneys, board members, or other persons in connection with pending or potential litigation or other legal matters; (5) investigative proceedings concerning possible or actual criminal misconduct; (6) complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) discussion of individual owner assessment accounts.  The new provision expands this to include discussion of a “business transaction in the negotitation stage,” which may be broadly interpreted.  Additionally, the new law indicates that the board has discretion to determine “if disclosure could adversely afftect the economic interests of the council of unit owners.”

The meeting to elect a board independent of the developer must occur with 60 days from the date that units representing 50 percent of the total votes in the condominium have been conveyed by the developer, unless a lesser percentage is specified in the condominium’s governing documents.  Before the meeting, the developer is also required to provide notice to each unit owner that the required percentage of units has been sold, along with the date, time and place of the meeting.  Within 30 days following the meeting, the developer is required to provide the materials identified above.

By Raymond Daniel Burke

Major League Baseball’s suspension of 13 players in its most recent attempt to address the use of performance enhancing drugs, including an unprecedented 211-game suspension of its highest paid player, Alex Rodriguez, is a welcome sign that the game is serious about re-establishing the legitimacy of player accomplishments  The importance of such vigilance cannot be overestimated in a game where statistical comparison serves as a generational bond, and the integrity of those statistics is the adhesive that gives meaning to the experiences shared across time that are the game’s narrative.  That magical capacity of the game to link generations was vividly on display one night in Baltimore during the fabled 1961 season.

We went to Memorial Stadium that September on a school night to be witness to what was known as “the chase.”  There were just 11 games left in the season when the Yankees arrived in Baltimore for a four-game series, and Roger Maris had amassed a staggering 58 homeruns.  Only three players in history had ever hit that many in a single season – Babe Ruth, Jimmie Foxx and Hank Greenberg.  Ruth was the undisputed homerun champion, having hit 59 in 1921 and reached the unthinkable plateau of 60 in 1927.  Maris was just 26-years-old, and, as the long season wore on, suffered through the agonizing stress brought on by the unremitting media attention given to his pursuit of the game’s most hallowed record held by 20^th Century America’s most mythical and beloved sports hero.

            Maris had failed to homer in either game of the series opening double-header, and we settled into our seats for the third game in anticipation of perhaps being part of history.  He had lined out to right field in his first at bat, but, in the third inning, his now familiar swing fully engaged a Milt Pappas pitch, and sent it high into the air.  There was little doubt about the result from the instant Maris made contact.  His 59^th homerun sailed over the high green wall and into the right field stands.  We had witnessed and shared a golden moment in a truly magical season.

Six days later, we watched on television as Maris hit his 60^th homerun in New York against Orioles pitcher Jack Fisher.  He would, of course, hit his 61^st on the season’s final game.  His detractors would assert that he had the advantage of having played in baseball’s first expansion season, with eight more games and a pitching talent pool arguably depleted by the addition of two teams.  But it is abundantly clear that Roger Maris had attained an athletic accomplish that was nothing short of amazing and worthy of nothing less than respectful admiration.  The same cannot be said for those who have since challenged and surpassed his record.

In the history of baseball, only 26 players have hit 50 or more homeruns in a season, and those 26 have done so a combined 42 times, 18 of which occurred during the 75 seasons from 1920 to 1924.  The remaining 24 occurred in just 13 seasons from 1995 to 2007.  It is no coincidence that this was the height of the PED era, and many of these totals preceded effective testing.  Indeed, the six greatest single season homerun totals, all attained by just three players – Barry Bonds, Mark McGuire and Sammy Sosa — occurred in a span of only four seasons from 1998 to 2001   It is also no coincidence that baseball was without a commissioner for six years following Faye Vincent’s resignation in 1992, and it was during this leadership vacuum that players’ bodies began to bulk up along with their homerun totals.  In fact, baseball was, for far too long, utterly negligent in its protection of the integrity of the game’s records.  Caught up in the financial rewards generated by the farce that was the McGwire-Sosa homerun race of 1998, the owners and players turned a blind eye to a cancer that was rendering meaningless its most cherished asset – the magnificent performances of the players in an unfathomably difficult and demanding sport.  The problem that baseball had brought on itself was simply that one could no longer tell which accomplishments were truly remarkable and which were the products of pharmaceutical enhancement.

This sad history makes all players suspect, and subjects each achievement to uncertainty.  Baseball should be fully celebrating achievements of its young stars instead of allowing those achievements to be subject to even the slightest suspicion.  Although a more rigorous testing program has helped clean-up the game, the drug industry is always busy trying to stay a step ahead of the testing protocols.  When players, with the financial means to seek the best medical care, are visiting a so-called anti-aging clinic in Florida run by a guy with no legitimate medical training, it is evident that the only way the sport can cleanse itself is to make the penalty for PED use so severe that it is not worth the risk.  When Melky Cabrera is suspended for 50 games, and then immediately signs a two- year contract for $8 million per season, it is apparent that the penalties are not a meaningful deterrence.

The latest suspensions are a hopeful effort in the cause of baseball regaining its glory. If the owners and players commit to a program of sufficient penalties that will fundamentally eradicate this stain on the game, they have the potential to reap the benefits of being part of a new golden age, where players’ accomplishments are celebrated and admired in the shared joy that this beautiful game is so capable of bestowing on its fans.  And there can again be truly magical nights like the one we experienced in September 1961.

_____________________________________________________________________________

http://www.baltimoresun.com/news/opinion/oped/bs-ed-maris-record-20130811,0,149506.story

Also, I was quoted by Candy Crowley on CNN’s State of the Union show yesterday, during a discussion with Ernie Banks and Ken Burns.  Here is the link:

http://sotu.blogs.cnn.com/2013/08/11/the-future-of-americas-favorite-pastime/

Homeowner associations are not mentioned in the bill, and would not benefit from its provisions.  That exclusion has the potential to become a source of debate.  The bill  has been referred to the House Committee on Tranportation and Infrastructure.

http://www.wbal.com/article/101110/12/What-Freedoms-Do-We-Have%3f

http://www.wbal.com/article/101072/10/template-marylandsnewsnow/150-Years-Later-Have-We-Lost-Our-Liberty

In an age of surveillance, has government of the people perished?

Even with all of the monuments, markers and preserved artillery pieces, the pastoral calm of south central Pennsylvania still dominates the battlefield where some 160,000 Americans clashed in the continent’s most epic and consequential military confrontation.  The familiar images from three raging days of furious and deadly battle for America’s soul still stand in stark contrast to the undeniable tranquility of the setting.  Yet it was here that the union was most famously preserved, and where Abraham Lincoln, in his eloquent address, ultimately challenged the nation to establish a new birth of freedom based on its founding ideals of liberty and equality.  During this week’s 150^th commemoration of the battle, we could all do well to be mindful of Lincoln’s call for resolve that Gettysburg’s dead shall not have died in vain.

Today we find that the National Security Agency, dedicated to the collection and analysis of foreign communications, has routinely engaged in covert surveillance of the American public’s phone and internet usage.  That it took a criminal act to reveal this is demonstrative of how little “government by the people” was involved in the development of this policy.  It was conceived and carried-out entirely in secret and apart from the deliberations of a democratic republic, and was thus undiscoverable in the normal processes of government.

We are told that this was all done in the name of national security; that intercepted private communications are not read except as part of reacting to a cognizable threat; that a secret court must approve surveillance; that there is meaningful Congressional and administrative oversight; that legitimate terrorist threats were thwarted by virtue of these measures: and, fact, harm was done to our security from the program’s revelation.  All of that may or may not be so, but how are we ever to know?  The process of verifying any of those assertions would itself violate the program’s necessary secrecy.  Indeed, the very fact of such a secret domestic spying program is wholly contrary to the fundamental precepts of government acting only through the will of the governed.

And so we have a conundrum.  The program cannot operate unless we are willing to relinquish, not only our personal privacy, but our say in how our government operates.  We are asked to acknowledge the permissibility of the creation and operation of a government program entirely beyond the purview of the American people.  And we are only asked for that acknowledgement because of the sordid circumstances in which it came to light.  We were, in fact, never supposed to know.

 We should, therefore, be asking ourselves if the perceived threat justifies such a significant alteration of the role of the American people in governing themselves. Clearly we are being required to give up strict adherence to the Fourth Amendment’s prohibition on unreasonable searches and seizures, which means intrusions without the approval of a court. While a secret court ostensibly serves that purpose, the fact that it operates in secret is an anathema to the rudimentary concept of  a court of justice, where judges and officials are chosen by the people or their representatives, and where proceedings are open a subject to review.  The further fact that the court rarely, if ever, turns down a request for surveillance further obscures its authority as a purported protector of constitutional rights.

Perhaps more significant is very idea of a government program that received no vetting whatsoever through the democratic process.  Essentially, we are simply asked to trust the administrators of the surveillance to take care to protect our privacy.  In other words, we need not worry our pretty little heads about those complex national security issues.  It is all being taken care of by a dedicated, impartial and fully incorruptible government that knows what is best for us.

The terrorist threat is obviously something that requires a response with our full resolve and utmost diligence.  But is it not the loss of our liberty that is the ultimate terrorist goal?  Do they not wish to frighten us into capitulation of our fundamental rights?  Could it be that in the breath and scope of our response we are handing the terrorists what amounts to a partial victory?  Those are questions worthy of debate in our republic.  If we determine that it is necessary to give up rights, we should do so knowingly.  That is the heavy burden that our forbears bequeathed to us in the Constitution.  It is also a great strength that sets us apart from other nations.

Fifty years ago, when we marked the Gettysburg centennial, we were still fighting a very significant part of of the Civil War.  That spring, in the name of public safety, Bull Connor, the Commissioner of Public Safety for Birmingham, Alabama, unleashed dogs and had fire hoses turned on peaceful civil rights demonstrators.  People gave their supreme efforts, and, in some cases, their lives to establish that such injustice, in the name of security, never be visited upon Americans because of the color of their skin.  But the preservation of the rights of a free people requires constant vigilance.  It requires our never-ending engagement.

There is much power given to those with the authority to act in the name of safety and security.  Like all powers, it is subject to corruption and abuse.  We have built a system in which we attempt to minimize corruption of power through the oversight of the people.  If we are asked to subject ourselves to invasions of privacy in the name of national security, we should first have the meaningful discourse necessary to give the maximum assurance that the program is conducted in the best interests of the public.  Otherwise, we have surrendered rights in ignorance and silence.  We should not find out about an abridgement of constitutional rights in the manner in which this program was disclosed.  We should not relinquish rights in ignorance and silence. As the dead at Gettysburg should have taught us, remaining a free people is not for the faint of heart.  As Lincoln admonished us, it is something about which we must be fully resolved.

As condominium boards and property managers should well know, Section 11-135 of the Maryland Condominium Act imposes a duty on councils of unit owners to provide unit purchasers with a resale certificate whenever a unit is being re-sold.   These include the disclosure of fees payable, approved capital expenditures, balance sheets, and a detailed operating budget showing any reserve fund for maintenance and reserves.  It also requires “[a] statement as to whether the council of unit owners has knowledge of any violation of the health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the condominium.”  All of this is intended to give potential buyers a reasonable understanding of the condition of the common elements, and the maintenance, repair and replacement costs that they may incur if they purchase a unit.  It recognizes that purchaser of a condominium unit, unlike the buyer of an individual home,  purchases not only a unit, but an undivided percentage interest in the common elements, and cannot be expected to undertake an inspection of all of those building components.  Accordingly, where condominium councils have had information about building conditions that require correction, such as in transition studies and engineering reports, the best course has been to disclose that information to potential purchasers to avoid a claim that they withheld material facts relevant to an informed purchase decision.

Then along came the Maryland Court of Appeals decision in MRA Property Management, Inc. v. Armstrong,  426 Md. 83, 43 A. 3d 397 (2012).   While the issue was not actually before the Court, it, nevertheless, took the unusual step of considering the question of what constitutes knowledge of a code violation so as to require disclosure.  In a footnote, the Court opined that the disclosure requirement involves only “charged violations;” that is, only violations as to which a formal violation notice has been issued by the code authority.  It can certainly be argued that “knowledge” of a code violation includes knowing that a deviation from a code requirement exists, such as in the form of an engineer’s report, and that such information is highly relevant to a consideration of what maintenance and repair costs may confront the unit purchaser.  However, the Court’s voluntary discussion of this issue, while only dicta, certainly indicates the direction and narrow reading of the statute the Court may take if the issue were to be placed squarely before it.

The Court in the MRA case was primarily concerned with whether a misleading resale certificate could provide the basis for a claimed violation of the Maryland Consumer Protection Act.  It held that the statutory duty to provide disclosure information required under Section 11-135 of the Condominium Act “sufficiently implicated [the council and the property manager] in the entire transaction so as to impose liability under the Consumer Protection Act.”  Specifically with regard to the disclosure  code violations, the Court was clear in pointing at that the issue as not part of the basis on which judgment had been entered in the trial court, and, therefore, was not at issue on appeal.  In fact, the Court expressly noted that the claimants had abandoned the issue of known but uncharged code violations in the lower court.  Despite this, the Court went on to declare what it would rule if the issue were before, concluding that “it is knowledge of of a charged violation thereof, rather than the conduct underlying the violation, that requires disclosure under Section 11-135(a)(4)(x).  Because they were never issued a notice of any such violations, MRA and the Association could not have violated Section 11-135(a)(4)(x).”

In support of this conclusion, the Court cited its prior decision in Swinson v. Lords Landing Village Condominium, 360 Md. 462, 758 A. 2d 1008 (2000).  In that case, the buyer claimed that the condominium had improperly failed to disclose violations of the Prince George’s County Housing Code that had been issued by the County.  The Court held that, because the statute referred only to disclosure of violations of the health and building code, and not housing code violations, a resale certificate is not required to disclose housing code violations.  That case, however, did not address the issue of whether knowledge of a health or building code violation required disclosure in the absence of a violation notice having been issued, and does not directly support the conclusion reached in the MRA case footnote.

The MRA decision did expressly note that, at oral argument, counsel for the claimants “conceded that a condominium association’s omission of conditions amounting to a potential, but not charged, building code violation would not violate the Condominium Act.  The quoted language from the oral argument demonstrates that counsel at least conceded that, in the absence of a violation notice having been issued, the condominium could “technically comply” with statute by stating that there were no “known” code violations.  All of this, however, seems to miss the point.  The resale disclosure provisions are intended to provide condominium unit purchasers with meaningful information with regard to the expenses that can reasonably expect to face if they complete the purchase.  Knowledge that code violations exist, through an engineering report or otherwise, regardless of whether a citation has been issued, could be highly relevant to determining what maintenance costs the unit owners can expect in the coming years.  In the MRA case, there was evidence that the council knew of building leakage and potential repair costs well before the complaining unit owners purchased their units.

The issue of whether knowledge of potential assessments for repairs should be disclosed to potential condominium unit buyers took the form of legislation when House Bill 23 was introduced in the Maryland General Assembly during the 2013 session.  It would have required information concerning “potential” special assessments to be included in resale contracts for both condominium units  and properties subject to  a homeowners association. The proposed legislation would have amended Section 11-135 of the Maryland Condominium Act, as well as Section 11B-106 of the Maryland Homeowners Association Act, to require that any resale contract include a notice of “any potential special assessment that is referenced within the preceding 12 months in” (1) the agenda or minutes of any meeting of the board of directors of a condominium, or the governing body of a homeowners association; or (2) a vote at a meeting of a condominium’s council of unit owners or a homeowners association.  As proposed, the new requirement would apply to a mere reference to the possibility of a special assessment, and not to just actual special assessment proposals or enactments.  However, the the bill never got out of committee by the time the session ended.

Shortly thereafter, the Maryland Court of Special Appeals issued an unreported opinion in the case of Clark v. Zalco Realty, Inc, No. 0277, Sept. Term 2012.  That case concerned claimed misrepresentations in a condominium resale certificate concerning the source and extent of water leakage into the unit.  It was alleged that the council had failed disclose information contained in an engineer’s report, failed to disclose knowledge of past leakage, and failed to reveal that it intended to replace the building’s roof.  The suit included a claim that that the conditions amounted to code violations that were required to be disclosed under Section 11-135 of the Condominium Act.  The Court, relying directly on the non-binding dicta of the Court of Appeals in the MRA case, held that the council must have first received “notice or citation from an official enforcement agency” before it was required to disclose the violation in a resale certificate.  While this opinion, because it was designated as unreported, cannot be cited or serve as binding precedent, it nevertheless reinforces the notion the only code violations that must be disclosed in a resale certificate are those that have been cited by the local code authority.

This begs the question of whether a council of unit owners can withhold information from qualified professionals that identifies the presence of a code violation.  Moreover, if that knowledge includes the need for repairs and potential costs, is it not pertinent information with regard to the accuracy and reliability of the financial disclosures being made?  If the council knows, from, for example, an engineers report, that repairs will ultimately be required to building conditions, including code violations, and also know the costs that will be associated with those repairs, is such knowledge the type of disclosure intended by Section 11-135?  These matters must be carefully considered by condominium councils and their property managers when they develop the content of resale certificates.

The new Section would have precluded provisions that (1) shorten the statute of limitations applicable to any claim; (2) waive application of “the discovery rule” as to when claims accrue; or (3) require that that claims be submitted to arbitration within a time shorter than the applicable statute of limitations.  Additionally, any provision requiring the council of unit owners to obtain a vote of unit owners, the approval of the developer, or the approval of any non-unit owners as a precondition to the institution of a claim would be unenforceable unless adopted by the council of unit owners after the unit owners other than the developer obtain control of a majority of the board of directors.  The House version, HB 1167, failed in the Environmental Matters Committee.

Under the Senate bill, within 180 days after the election of  a majority of the board or governing body that is unaffiliated with the developer, such contracts previously entered into by the developer could be terminated on 30 days notice to the contractor.  Under current law, only developer contracts for utility services and communications systems may be terminated, but there is no limit on when that action must be taken by the independent governing body.  The provision that termination take place within 180 days of the election of an independent governing body would have been a new requirement.  the legislation received an unfavorable vote in the House Judicial Proceedings Committee.

The legislation proposed the creation of a nine-member “State Board of Common Ownership Community Managers” in the Maryland Department of Labor, Licensing and Regulation.  A license from the Board would be required in order to provide property management services to a common ownership community.  Applicants would be required to complete a training program and pass an examination.  Licenses would be renewable every two years.  The Board would have the power to deny, suspend or revoke licenses for various wrongful acts, and impose monetary penalties for misconduct.  Licensees would be required to to provide a fidelity bond or other insurance in the lesser amount of $2,000,000 or the aggregate amount of operating reserve balances of all communities that they manage.  There is also provision for a  limited license could be issued to persons providing management services under the supervision of a licensed manager.  The bill would require  all condominiums,  cooperatives and  homeowners associations to annually register with the Board and identify any licensed community manager.  A prior version of the bill had proposed to limit the registration requirement to larger communities, but that limitation was deleted from the final version.

Similar legislation was being considered in in the Senate as SB 794, but never got out of the Judicial Proceedings Committee.

Presently, a condominium’s board of directors may meet in closed session for the following purposes:  (1) Discussion of matters pertaining to employees and personnel; (2) protection of privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) consultation with legal counsel on legal matters; (4) consultation with staff personnel, consultants, attorneys, board members, or other persons in connection with pending or potential litigation or other legal matters; (5) investigative proceedings concerning possible or actual criminal misconduct; (6) complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) discussion of individual owner assessment accounts.

Both the Maryland Senate and House of Delegates passed similar bills, but the House version had included cooperative housing corporations within the scope of the legislation.  The bills were reconciled in committee, with cooperatives being eliminated in accordance with the Senate version.  Late amendments added “reasonable costs,” and provided that costs and fees not exceed the amount of the principal amount of the unpaid assessment.  The legislation expressly provides that these provisions do not preclude the use of other means to enforce a lien other than foreclosure.  Accordingly, suits for money judgments can still be pursued.  The Governor signed the bill on May 16, 2013, and it will become effective on October 1, 2013.  The law expressly provides that it is “to apply only prospectively and may not be applied or interpreted to have any effect on or application to any lien filed before the effective date.”

Both the Senate and House of Delegates had previously passed similar bills, but the House version had included cooperative housing corporations within the scope of the legislation.  The bills were reconciled in committee, with cooperatives being eliminated in accordance with the Senate version.  Late amendments added “reasonable costs,” and provided that costs and fees not exceed the amount of the principal amount of the unpaid assessment.  The legislation expressly provides that these provisions do not preclude the use of other means to enforce a lien other than foreclosure.  Accordingly, suits for money judgments can still be pursued.

The legislation is in reaction to circumstances in which attorney’s fees amount to substantial portion of the amount clauimed to be owing and forming the basis for monetary judgment actions and the imposition of liens.  Both Bills would add new Section 11-110 to the Maryland Condominium Act and new Section 117.1 to the Maryland Homeowners Association Act, and create a rebuttable presumption that attorney’s fees claimed are reasonable which could be challenged by a homeowner.  In any action in which all or substantially all of the claimed amount is attorney’s fees, the Maryland Contract Lien Act would not apply.  In other words, there would be no right to obtain a lien in the absence of first obtaining a money judment.

            April, in these parts, is irresistibly transformative.  Vibrant life and color rise up and relentlessly overwhelm a drab winter’s landscape, inspiring notions in the human heart of renewal and redemption.  And with it comes another baseball season, and all its manifestations of new beginnings and the grand possibilities that await in the lush green days ahead.

            So it was supposed to be 45 years ago.  1968 had dawned with the stunning reports of the Tet Offensive, a sobering reality that stretched deep into March, concluding with a sitting president declining to seek re-election, and bringing to us a reluctant familiarity with places called Khe Sanh, Hue, Lang Vei  and My Lai.  Our weariness longed for April’s explosion of daffodils, bright green leaves, and baseball.

            But the traditional month of promise had hardly begun when news arrived that Dr. Martin Luther King, Jr. had been assassinated while standing on the balcony of Memphis hotel.  It was a dagger to the heart of the struggle for equality and justice, and our city erupted in an explosion of long accumulated frustration.  We suddenly found ourselves in a warzone of riots and fire bombings that played out against the imposition of a general curfew enforced by uniformed soldiers, leaving us gripped by varying degrees of fear, anger and disbelief.  Many businesses and neighborhoods would never be the same.

            When it was mostly over, we ventured out cautiously and curiously past the smoldering ruble of mangled storefronts, which stood in stark contrast to the spring weather and peaceful calm of Holy Week and spring break.  The Orioles opened play at Memorial Stadium almost immediately after the decrease in violence with a victory over the Oakland As, a win tempered by the palpable discomfort we now felt as we passed along our own streets.

            Only a few short weeks later, with the riot fires fresh in our minds, Senator Robert Kennedy was also felled by an assassin’s bullet, his calls for social justice an end to poverty seemingly having also taken the blow the left him lying on a hotel floor. As we moved toward summer, it was as though madness had become the rule of the day.

            It is somehow fitting that, amidst all this turmoil and uncertainty, a figure should appear on the local stage who would profoundly impact this community’s self-image and confidence.  During the All Star break, the Orioles fired manager Hank Bauer, and replaced him with a relatively unknown coach named Earl Weaver.  The franchise that had astonished the baseball world by sweeping the Los Angeles Dodgers to win the 1966 World Series had staggered through 1967 to finish nine games under .500.  The team that began play in those troubling days of 1968 had been frustratingly inconsistent.  By mid-season, they were over .500, but ten-and-a-half games out of first place.

Enter Earl Weaver, the diminutive firebrand who had spent 19 years as a minor league player or manager before reaching the major league coaching staff with a pronounced chip on his shoulder.  He could be unapologetically antagonistic, bellicose and profane, but, above all, he was supremely confident in his abilities, obsessively rigorous in his dedication to fundamentals, and unwaveringly passionate about the game and his players.  He was a superb match for the town that would come to embrace him.

The record is an undeniably amazing one.  That ‘68 team won 91 games and finished in second place.  During the following 15 seasons, Mr. Weaver’s teams finished first or second 13 more times.  They won 90 games 11 more times, and 100 games 5 times, securing 7 division championships, 5 pennants and a World Series.  He had talented players, but he made them better.  In fact, he used the entire roster in a way that maximized every player’s ability to contribute to a winning team.  Consoling and criticizing as necessary, he motivated them to become greater than the sum of their parts.

The new Section would preclude provisions that (1) shorten the statute of limitations applicable to any claim; (2) waive application of “the discovery rule” as to when claims accrue; (3) operated to prevent the filing of a claim within the applicable period of limitations or (4) require that that claims be submitted to arbitration within a time shorter than the applicable statute of limitations.  Additionally, any provision requiring the council of unit owners to obtain a vote of unit owners, the approval of the developer, or the approval of any non-unit owners as a precondition to the institution of a claim would be unenforceable unless adopted by the council of unit owners after the unit owners other than the developer obtain control of a majority of the board of directors.

Similar legislation is pending in the House of Delegates as HB 1141.

Under the bill, within 180 days after the election of  a majority of the board or governing body that is unaffiliated with the developer, such contracts previously entered into by the developer could be terminated on 30 days notice to the contractor.  Under current law, only developer contracts for utility services and communications systems may be terminated, but there is no limit on when that action must be taken by the independent governing body.  The legislation will now go to the House of Delegates.

Under Section 11-110(d) of the Maryland Condominium Act, payments of assessments, along with interest, late charges and attorney’s fees, may be enforced by the council of unit owners against a delinquent unit owner by the imposition of a lien on the unit under the provisions of the Maryland Contract Lien Act.  It further provides that a suit for a money judgment may also be maintained by the Council.  The Maryland Contract Lien Act provides for the imposition of a lien on property as the result of a breach of contract.  In the context of a condominium, the contract at issue is the obligation of each unit owner to pay their allocated share of the common expenses.  Such a lien may be foreclosed in the same manner as mortgages or deeds of trust.  Under the current provisions of Section 14-204(b) of the Maryland Contract Lien Act, “suit for any deficiency following foreclosure may be maintained in the same proceeding,” meaning in the foreclosure proceeding; “and suit for monetary damages may be maintained without waiving any lien securing the same,” meaning that a separate suit for damage does not preclude commencement of a foreclosure proceeding.  However, it has been unclear whether a suit for monetary damages may include costs and attorney’s fees that would be permissible in a foreclosure proceeding.  Moreover, it was unclear whether a suit for monetary damage can be brought after foreclosure.

The legislation deletes the above quoted language from Section 14-204(b) of the Maryland Contract Lien Act, and adds  new language stating that the party entitled to enforce the lien “may bring suit for a monetary judgment for the lien amount, plus costs and attorney’s fees, without foreclosing on the property subject to the lien.”  It further would provide that, if the lien has been foreclosed, the person entitled to enforce the lien may “maintain a suit in the foreclosure proceeding for a monetary judgment for any deficiency amount, plus costs and attorney’s fees,” or may “bring a separate suit for a monetary judgment for an deficiency amount, plus costs and attorney’s fees.”  Accordingly, the bill  makes clear that a suit for money damages for unpaid assessments, along with costs and fees,  can be brought regardless of whether a foreclosure proceeding has been instituted or completed; and, in the event of foreclosure, such a suit can be maintained for any deficiency after foreclosure either in the foreclosure action or as a separate suit.

Cooperatives were originally included in the House bill, but were deleted in the final version.  Both versions add new provisions to Section 14-204 of the Maryland Contract Lien Act that would prevent lien foreclosures based on amounts due for fines imposed by the association, along with any attorney’s fees related to recovering the fines.  The House version also expressly provides that foreclosures based on delinquent assessments may include related costs and attorney’s fees.  The two bills will now have to be reconciled in conference committee.

It proposes the creation of a nine-member “State Board of Common Ownership Community Managers” in the Maryland Department of Labor, Licensing and Regulation.  A license from the Board would be required in order to provide property management services to a common ownership community.  Applicants would be required to complete a training program and pass an examination.  Licenses would be renewable every two years.  The Board would have the power to deny, suspend or revoke licenses for various wrongful acts, and impose monetary penalties for misconduct.  Licensees would be required to to provide a fidelity bond or other insurance in the lesser amount of $2,000,000 or the aggregate amount of operating reserve balances of all communities that they manage.  There is also provision for a  limited license could be issued to persons providing management services under the supervision of a licensed manager.

The bill would require  all condominiums,  cooperatives and  homeowners associations to annually register with the Board and identify any licensed community manager.  A prior version of the bill had proposed to limit the registration requirement to larger communities, but that limitation was deleted from the final version.

A resident of a community who provides property management services without compensation would be exempt from the licensing and regulatory requirements.  Similar legislation is being considered in in the Maryland Senate as SB 794.

Presently, a condominium’s board of directors may meet in closed session for the following purposes:  (1) Discussion of matters pertaining to employees and personnel; (2) protection of privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) consultation with legal counsel on legal matters; (4) consultation with staff personnel, consultants, attorneys, board members, or other persons in connection with pending or potential litigation or other legal matters; (5) investigative proceedings concerning possible or actual criminal misconduct; (6) complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) discussion of individual owner assessment accounts.

Under the proposed amendment, within 180 days after the election of  a majority of the board or governing body that is unaffiliated with the developer, such contracts previously entered into by the developer could be terminated on 30 days notice to the contractor.  Under current law, only developer contracts for utility services and communications systems may be terminated, but there is no limit on when that action must be taken by the independent governing body.  The provision that termination take place within 180 days of the election of an independent governing body is a new requirement.

Licensing and regulation of property managers – SB 794

Precluding limits on causes of action – SB 167

Limiting liens to delinquent assessments and not fine – SB 161

Resale notice of potential special assessment – SB 176

Closed meetings to consider business transactions – SB 197

The new Section would apply to any action in which the council of unit owners seeks to (1) recover attorney’s fees from an owner; (2) impose a lien on a unit based on a unit owner’s failure to pay regular or special assessments; or enforce a non-monetary violation of the declaration, bylaws, or governing documents.  It is expressly provided that there would be a rebuttable presumption that the attorney’s fees claims are reasonable in relation to the controversy.  A unit owner, or a court on its own initiative, may challenge that rebuttal presumption, at which point the council of unit owners would have the burden of proving the reasonableness of the attorney’s fees by a preponderance of the evidence.  The bill would also provide that, where all or substantially all of a claimed amount is for attorney’s fees, the Maryland Contract Lien Act will not apply.  Instead, that claim would have to be enforced like any other claim without a right to impose a lien.

A “financial event” is defined as (1) a reduction in household income by more than 50%; (2) an increase in household expenses of 33% or more: (3) death of a unit owner or their spouse; (4) a change in location of the unit owner’s or spouse’s permanent place of employment that is 50 miles or further from the unit; (5) military deployment of the unit owner or their spouse for 12 months or more; or (6) divorce of the unit owner.

A unit owner seeking to qualify would be required to submit a written request to the condominium’s governing body with evidence that (1) they had experienced a financial event; (2) the unit is their primary residence; (3) they were a resident of Maryland at the time of the financial event; and (4) the appraised value of the unit is less than 90% of the amount that is owed on it.

Exceptions to rental restrictions under this proposal would be for a period of three years.

The new Section would preclude provisions that (1) shorten the statute of limitations applicable to any claim; (2) waive application of “the discovery rule” as to when claims accrue; or (3) require that that claims be submitted to arbitration within a time shorter than the applicable statute of limitations.  Additionally, any provision requiring the council of unit owners to obtain a vote of unit owners, the approval of the developer, or the approval of any non-unit owners as a precondition to the institution of a claim would be unenforceable unless adopted by the council of unit owners after the unit owners other than the developer obtain control of a majority of the board of directors.

In addition to advertising requirements prior to a foreclosure sale, the debtor would have a right to cure the default by paying the amount due plus costs up to one day prior to the sale.  On request, the debtor or their attorney, within a reasonable time would be entitled to receive the amount necessary to cure the default and instructions for delivering payment.  The bill also provides that a cause of action for failure to comply with these provisions may be brought any time up to three years after ratification of the sale.

Pursuant to Section 11-110(d) of the Maryland Condominium Act, payments of assessments, along with interest, late charges and attorney’s fees, may be enforced by the council of unit owners against a delinquent unit owner by the imposition of a lien on the unit under the provisions of the Maryland Contract Lien Act.  It further provides that a suit for a money judgment may also be maintained by the Council.  The Maryland Contract Lien Act provides for the imposition of a lien on property as the result of a breach of contract.  In the context of a condominium, the contract at issue is the obligation of each unit owner to pay their allocated share of the common expenses.  Such a lien may be foreclosed in the same manner as mortgages or deeds of trust.  Under the current provisions of Section 14-204(b) of the Maryland Contract Lien Act, “suit for any deficiency following foreclosure may be maintained in the same proceeding,” meaning in the foreclosure proceeding; “and suit for monetary damages may be maintained without waiving any lien securing the same,” meaning that a separate suit for damage does not preclude commencement of a foreclosure proceeding.  However, it has been unclear whether a suit for monetary damages may include costs and attorney’s fees that would be permissible in a foreclosure proceeding.  Moreover, it was unclear whether a suit for monetary damage can be brought after foreclosure.

House Bill 628 would delete the above quoted language from Section 14-204(b) of the Maryland Contract Lien Act.  The proposed new language would provide that the party entitled to enforce the lien “may bring suit for a monetary judgment for the lien amount, plus costs and attorney’s fees, without foreclosing on the property subject to the lien.”  It further would provide that, if the lien has been foreclosed, the person entitled to enforce the lien may “maintain a suit in the foreclosure proceeding for a monetary judgment for any deficiency amount, plus costs and attorney’s fees,” or may “bring a separate suit for a monetary judgment for an deficiency amount, plus costs and attorney’s fees.”  Accordingly, the proposed change would make clear that a suit for money damages for unpaid assessments, along with costs and fees,  can be brought regardless of whether a foreclosure proceeding has been instituted or completed; and, in the event of foreclosure, such a suit can be maintained for any deficiency after foreclosure either in the foreclosure action or as a separate suit.

The bill would require  a condominium or cooperative with 11 or more units, and a homeowners association with 31 or more units to annually register with the Board and identify its licensed community manager.

A resident of a community who provides property management services without compensation would be exempt from the licensing and regulatory requirements.

It appears that the intent of the bill is to prevent foreclosure on liens that arise entirely from failure to pay fines that have been imposed by the community.  However, the failure to define the term “fine” may leave it open to broader interpretation.   For example, in the absence of a definition of fine, it could be asserted that late charges that are added for unpaid assessments constitute a form of “fine,” and, therefore, may not be included in the lien foreclosure amount.  Such an argument is strengthened by the fact that the bill also does not define delinquent monthly or special assessments as including any interest and late charges incurred.

Additionally, the attorney’s fees that are precluded are only those that are “related to recovering the fines.”  Accordingly,the inclusion of attorney’s fees arising from recovering assessments would continue to be permitted.  But, if it is argued that  late charges are fines that are added to delinquent assessments are “fines” that may not be included, some related attorney’s fees would be precluded as well.

Presently, a condominium’s board of directors may meet in closed session for the following purposes:  (1) Discussion of matters pertaining to employees and personnel; (2) protection of privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) consultation with legal counsel on legal matters; (4) consultation with staff personnel, consultants, attorneys, board members, or other persons in connection with pending or potential litigation or other legal matters; (5) investigative proceedings concerning possible or actual criminal misconduct; (6) complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) discussion of individual owner assessment accounts.

The spectacular playoff run that brings the Ravens to this week’s Super Bowl rightfully has the City literally and figuratively aglow in purple.  Of course, there are those who will assert that it is only a game, and there are far more pressing issues that should rightfully occupy the local headlines.  It is true that it is just a game.  As in many ways game day is just another afternoon.  But sometimes it is more than could have ever been imagined.

Consider Christmas Eve 1977.  On that Saturday, the Baltimore Colts and Oakland Raiders met at Memorial Stadium in an epic and exhausting double overtime playoff game that featured seven consecutive lead-changing scores.  In the second overtime quarter, the assembled congregation rose to its feet in unison, holding its collective breath as Colts’ receiver, Raymond Chester, slipped behind the Raiders’ secondary.  The pass from quarterback Bert Jones, hobbling with a toe injury and struggling to set his feet, fell just beyond Chester’s grasp.  As the ball landed harmlessly on the mangled turf, the crowd sunk back into its seats, having endured yet another of that afternoon’s many juxtaposed moments of euphoria and chagrin.

            It all ended suddenly and stunningly when Raiders’ quarterback, Ken Stabler, connected with Dave Casper for a ten-yard game winning touchdown.  As the disappointed throng filed out of the stadium late that afternoon, the holidays waited to embrace us and sooth our sorrow.  And we had the further comfort of feeling assured that there would be other days when we would have the chance to rejoice in the winning score.  After all, the Colts had been in playoffs three straight years, and seemed to be maturing together in time to embark on long run of success.  We maintained our pride and our hopes.  Except, of course, that it was not to be.  There would not be such a day again for a very long time.

            The story is well known.  Ownership that never understood the sanctified place the Colts held in the psyche of Baltimore drove a wedge between the team and its fans, and mismanaged it into a winless laughing stock that was rejected by its own number one draft pick.  The hostilities culminated in the unannounced departure of the team – the colors, the logo and the history all disappearing under cover of the darkness of a snowy March night in 1984.

            Of course it is just a game.  But the twelve years that followed without football in Baltimore were devastating to a region that has long battled its inferiority complex as the train stop between Philadelphia and Washington.  A city with identity issues.  One that was held under martial law during the Civil War, but was truly neither northern nor southern. A hard scrabble working town in the shadow of its sophisticated neighbors.  The Colts had given us recognition on the national stage, and we had embraced them with the fervor of one who longs to have reason to hold his head up high and to believe in his possibilities.  They were an extension of who we were as a community.  Colts’ games were like Sunday services were worshipers gathered in a horseshoe-shaped cathedral.  We expressed our character as Colts fans, and they were our inspiration, not just as a sports team, but for what we could be as a people.  It was more than just a game that was taken away.

            That Saturday in 1977 was another Christmas Eve; another football game; another roller coaster of playoff excitement.  And it was the last time it would happen for a generation.  It would be 23 years before the next playoff game was played in Baltimore.  Nearly a quarter century without our football team on the national stage.  Without a day of that unique shared pride, anxiety, glee and anguish that we so cavalierly expected to soon enjoy again that long ago December.

Such claims are often supported by a medical analysis known as differential diagnosis, which as been used by physicians to attribute various medical symptoms to inhalation of mold in water-damaged buildings.  Rather than demonstrating a specific exposure to a specific mold resulting in a specific reaction,  differential diagnosis uses a process that “rules out” or “rules in” possible causes of symptoms a patient is experiencing to determine that their symptoms are related to exposure to mold.  Differential diagnosis has been frequently used to show an association between exposure to mold in wet buildings and certain human health effects.  As was previously reported on this blog, in its opinion in the case of Montgomery Mutual Insurance Co. v. Chesson, the Maryland Court of Special Appeals held that this method is not sufficiently accepted in the scientific community so as to be used as a basis for medical testimony in mold cases.  The Court of Special Appeals reversed a trial court ruling that found such medical testimony to be reliable and admissible.  Maryland’s highest court, the Court of Appeals, has now agreed to review and rule on this issue.  Chesson v. Montgomery Mutual Insurance Co., Case No. 97, Sept. Term 2012.

The arbitration trial team represented Penthouse 4C, LLC (the plaintiff and owner of the almost 5,000 square foot condominium unit) against 100 Harborview Drive Council of Unit Owners (the defendant and party responsible for maintaining the common elements of the high-rise building).  James W. Ancel, Sr. (the sole member of Penthouse 4C, LLC and, in practical effect, the owner of the unit) lived at the condominium through mid-August of 2011, when he was forced to move out because of mold contamination that had rendered his unit unsafe for normal occupancy.

Penthouse 4C, though its sole member, Mr. Ancel, had asked the Council for almost two years to fix the water infiltration and mold contamination problems in the unit, which were caused by defects in the building’s roof system, exterior façade, and HVAC ductwork – all common elements of the condominium.  As a unit owner in a condominium regime, Penthouse 4C had no ability or authority to fix the defects in these common elements; instead, the Council was solely responsible to maintain the common elements pursuant to the requirements set forth in the condominium’s bylaws and the Maryland Condominium Act.  When the Council refused to fulfill its contractual and statutory obligations, Penthouse 4C filed suit in the Circuit Court for Baltimore City.  The Circuit Court then stayed the case for arbitration, as required by the condominium’s bylaws.

During a week-long arbitration trial held at Ober|Kaler’s offices in downtown Baltimore before the Honorable Dana M. Levitz, the Honorable Paul E. Alpert, and the Honorable Dale R. Cathell, Penthouse 4C presented evidence to establish that water leaks and mold contamination arising from defects in the building’s roof system, exterior façade, and HVAC ductwork were causing property damage and unabated mold growth throughout the unit.  Penthouse 4C also presented evidence to establish that the Council was negligent and had breached its obligations to adequately fund reserves to maintain the condominium’s common elements.

Penthouse 4C presented evidence of defects in the building’s roof system, exterior façade, and HVAC ductwork through the testimony and expert reports of Mr. Ancel (who is the owner of James W. Ancel, Inc. – a highly successful construction company) and professional engineers from Becht Engineering BT, Inc. and Simpson Gumpertz & Heger Inc.  Penthouse 4C presented evidence of mold contamination through the testimony and/or expert reports of industrial hygienists from Compliance Environmental International, Inc. and Penniman & Browne, Inc.  Penthouse 4C presented evidence of the cost to remediate the mold contamination and repair the water damage in the unit through the testimony and expert reports of Mr. Ancel and the president of Roy Kirby & Sons, Inc.  Finally, Penthouse 4C presented evidence of the Council’s failure to adequately fund reserves to maintain the common elements through the testimony of Rachel M. Hess – an attorney with the law firm of Winegrad, Hess, Friedman & Levitt, LLC, who is an expert in Maryland condominium law.

The Council, meanwhile, defended the case though the testimony and/or experts reports of a professional engineer, the condominium building’s engineer, three industrial hygienists, a mold remediation specialist, a cost of repair estimator, an expert on the standard of care for condominium associations, and the Council’s president.  The Council argued that it met the standard of care for maintaining the condominium’s common elements, that it adequately funded the condominium’s reserves, that the unit had normal levels of mold, and that the cost to repair any water damage in the unit was at most $53,118.23.

In the ensuing arbitration award, the majority panel of Judge Levitz and Judge Alpert found that “there are numerous defects allowing water to infiltrate into [the unit].”  The majority panel also found that the unit “cannot be said to be safe for normal occupancy” because of “water damage, mold growth, and mold deposition” and that a “remediation protocol must be followed to correct the problems.”  Based on its findings, the majority panel awarded Penthouse 4C “the sum of $1,252,487 as compensatory damages suffered as a result of the Council’s negligence and breach of their contractual obligations.”  The majority panel also ordered the Council to replace the building’s roof system, repair its exterior façade, clean its HVAC ductwork, and insulate its rooftop exterior HVAC ductwork – work that is valued at approximately $6 million.

The Council immediately filed a motion with the arbitration panel to request a modification of the award, which was denied.  The Council then filed a petition in the Circuit Court for Baltimore City to vacate in part and modify in part the award, which was also denied.  The Circuit Court confirmed the award and entered it as a final judgment earlier this year.  To date, Penthouse 4C has collected the full money judgment portion of the award from the Council: $1,252,487.  The Council has until December 30, 2013 to complete the specific performance requirements set forth in the award (replacing the building’s roof system, repairing the exterior façade, etc.).  The Council, though, has appealed the Circuit Court’s decision to confirm the award.  The appeal is currently pending in the Maryland Court of Special Appeals.

Baltimore’s Fifth Regiment Armory is a good place to start for some perspective on the recent presidential election. Within its gray stone walls, the tumultuous 1912 Democratic National Convention played a major scene in the political drama that resulted in an incumbent president not only being defeated, but finishing third in the national election. The dynamics that led to such an extraordinary result are lessons that apply to any analysis of an election involving a sitting president.

We are beset daily with opinions as to why Mitt Romney managed to win only one swing state against an incumbent presiding over an underwhelming economy. Many analysts point to the failure of the Republican Party to come to terms with the nation’s shifting demographics. Others go so far as to bemoan a perceived rejection of traditional free enterprise values in favor of an entitlement mentality. All of these theories, however, could benefit from a dose of history.

Of the 30 presidential elections during the last 120 years, 19 involved a sitting president nominated by his party to continue in office, including four instances in which a vice president had succeeded to office during the prior term. In only five of those elections was the incumbent defeated in the general election, and each of those cases — unlike this year’s election — shared several of certain factors that are instructive as to the circumstances under which the electorate will turn a sitting president out of office. These include an imperiled economy, a crisis detrimental to trust and confidence, highly charged issues, the dominating presence of a strong personality, a challenge for the nomination, and/or a third-party candidacy. Also, in each case, there was either a compellingly stated message of reform or circumstances that provided a clear recognition that reform was needed.

In the election of 1912, issues included the state of the Progressive agenda that had been promoted by former President Theodore Roosevelt and mostly abandoned by President William Howard Taft, along with the matters of trusts, tariffs and women’s suffrage. Roosevelt, the strongest political personality of his day, challenged Taft for the Republican nomination, and after his delegates were denied credentials at the national convention in Chicago, he and his supporters bolted and formed a third party. Meanwhile, in Baltimore, Woodrow Wilson won the Democratic nomination on the 46th ballot, announcing an aggressive agenda dubbed the New Freedom. Roosevelt countered with an equally well-articulated Progressive program known as the New Nationalism. The Republican split led to Wilson’s election, with Roosevelt’s third-party candidacy finishing second.

The other defeats of incumbents involved similarly unique circumstances. In 1932, the nation was in the midst of the economic and social devastation of the Great Depression. The New Deal platform of the ever-optimistic and jaunty Franklin Roosevelt resonated in the trouncing of Herbert Hoover.

The election of 1976 was dominated by a polarizing personality who was not even a candidate. Richard Nixon’s resignation propelled Gerald Ford into office, and the dark specter of the Watergate scandal loomed large over the country. That Mr. Ford had become vice president only because Spiro Agnew had also resigned in disgrace did not help, nor did Ronald Reagan’s challenge for the nomination. Jimmy Carter claimed the mantle of an outsider and reformer and rode the prevalent distrust of Washington to a narrow victory.

Four years later, Mr. Carter found himself besieged by inflation, the lingering effects of the Arab oil embargo, and the nightly broadcast images of Americans held captive in Iran. After beating back a formidable primary challenge by Ted Kennedy, he faced the optimistic and buoyant Ronald Reagan, along with John Anderson‘s independent campaign. Reagan’s confidently stated pledge to reinvigorate the American economy and strengthen its military made Mr. Carter a one-term president.

In 1992, George H.W. Bush, presiding over a sluggish economy, faced the hard-charging Bill Clinton, who promised fundamental changes in the nation’s economy and an alteration of priorities. Mr. Clinton’s charisma and message that he represented change, coupled with a third-party candidacy in the person of Ross Perot, helped ensure Mr. Bush’s defeat.

This year, Mitt Romney talked about change but failed to offer a clear agenda that represented a recognizable break with the past. Most informed voters surely recognized that they had heard the promised magical benefits of tax cuts before. In fact, the policy was very recently in place during the administration of George W. Bush, and helped turn a $290 billion budget surplus into a $455 billion deficit, while nearly doubling the national debt from $5.6 trillion to more than $10 trillion. Mr. Romney’s assertions that he would reduce spending and close tax loopholes (without meaningful specifics), along with promised defense increases, prevented his ever gaining the credible high ground in the economic conversation. Bill Clinton’s retort that “it’s arithmetic” probably rang truer with voters than anything offered by the billions of dollars spent on political advertising.

While this year presented an economy still in slow recovery from its 2008 collapse, the other factors present in past presidential defeats were clearly lacking. President Barack Obama had no primary challenge, nor was there any thorny third-party candidacy. He was spared blame for the economic collapse, while being able to take credit for slow but undeniable growth. No charismatic personality dominated the agenda, and the challenger never offered an inspirational program of truly new ideas that signaled a compelling reason for change.

These facts, more than any theories about the rise to prominence of some entitlement-dependent mass bent on turning America into Europe, provide the basis for why the country decided to stay with the guy in office.

The Court in the MRA case was primarily concerned with whether a misleading resale certificate could provide the basis for a claimed violation of the Maryland Consumer Protection Act.  It held  that the statutory duties to provide the disclosure information required under Section 11-135 of the Condominium Act, “sufficiently implicated [the council and the property manager] in the entire transaction so as to impose liability under the Consumer Protection Act.”  Specifically with regard to the disclosure  code violations, the Court was clear in pointing at that the issue as not part of the basis on which judgment had been entered in the trial court, and, therefore, was not at issue on appeal.  In fact, the Court expressly noted that the claimants had abandoned the issue of known but uncharged code violations in the lower court.  Despite this, the Court went on to declare what it would rule if the issue were before, concluding that “it is knowledge of of a charged violation thereof, rather than the conduct underlying the violation, that requires disclosure under Section 11-135(a)(4)(x).  Because they were never issued a notice of any such violations, MRA and the Association could not have violated Section 11-135(a)(4)(x).”

In support of this conclusion, the Court cited its prior decision in Swinson v. Lords Landing Village Condominium, 360 Md. 462, 758 A. 2d 1008 (2000).  In that case, the buyer claimed that the condominium had improperly failed to disclose violations of the Prince George’s County Housing Code that had been issued by the County.  The Court held that, because the statute referred only to disclosure of violations of the health and building code, and not housing code violations, a resale certificate is not required to disclose housing code violations.  That case, however, did not address the issue of whether knowledge of a health or building code violation required disclosure in the absence of a violation notice having been issued, and does not directly support the conclusion reached in the MRA case footnote.

The MRA decision did expressly note that, at oral argument, counsel for the claimants “conceded that a condominium association’s omission of conditions amounting to a potential, but not charged, building code violation would not violate the Condominium Act.  The quoted language from the oral argument demonstrates that counsel at least conceded that, in the absence of a violation notice having been issued, the condominium could “technically comply” with statute by stating that there were no “known” code violations.  All of this, however, seems to miss the point.  The resale disclosure provisions are intended to provide condominium unit purchasers with meaningful information with regard to the expenses that can reasonably expect to face if they complete the purchase.  Knowledge that code violations exist, through an engineering report or otherwise, regardless of whether a citation has been issued, could be highly relevant to determining what maintenance costs the unit owners can expect in the coming years.  The clarification of this issue  may be something that will be taken up in the legislature.

The case was tried over five days before a three-judge arbitration panel in September 2011.  In November 2011, the arbitration panel awarded the Plaintiff cash damages in the amount of $1,252,487, representing the cost to repair damage to the unit and to remediate the environmental contamination, along with alternative living expenses and other related costs.  The panel also issued a specific performance award directing the Condominium to undertake an identified scope of work to repair to the roof, exterior façade and HVAC system.  The value of the repair is approximately $5,000.000.  The panel ordered that the HVAC repairs be completed within 60 days, and that the remaining building repairs be completed by December 2013.

On June 5, 2012, the Circuit Court for Baltimore City confirmed the arbitration award in its entirety, and a judgment was entered.  Those of you who are interested are welcome to click the “Read More” tab to review the case details that follow:

Penthouse 4C, LLC (“PH4C”) is a limited liability company organized under the laws of Maryland, and the owner of the penthouse condominium unit at Harborview.  James W. Ancel, Sr. purchased 100% of the membership interest in the PH4C in April of 2007.  At that time, Mr. Ancel became the sole member of PH4C and the primary resident of the Unit.   On March 9, 2010, PH4C filed a Complaint for Specific Performance and Damages in the Circuit Court for Baltimore City relating to Condominium’s failure to perform duties required by the By-Laws of 100 Harborview Drive Condominium and Maryland law, including the failure to repair and maintain the common elements of the Condominium.  The claim concerned water intrusion and other damages to the Unit arising from defects in common element components, including the roof, exterior façade and HVAC system.  It was alleged that, as a result of transition studies and other information, the Condominium had long been aware of building deficiencies, but had not acted properly in responding to these issues.

On June 18, 2010, the Court ordered that the “case BE and the same IS HEREBY stayed as to all Defendants for arbitration pursuant to the parties’ arbitration agreement under the By-Laws of 100 Harborview Condominium.”

The arbitration agreement referenced by the Court in its June 4, 2010 Order is found in Article XV, Section 2 of the By-Laws: “If there be any dispute, concerning rules and regulations or any other matter related to the condominium, between the Council … and any unit owner … the same shall be submitted to arbitration in accordance with Section 3 of this Article XV.”  Article XV, Section 3(a) prescribes the procedure for selecting an arbitration panel: “Each of the two parties to the dispute or disagreement shall appoint one (1) arbitrator, the two arbitrators thus appointed shall, within fifteen (15) days after the second of them is appointed, jointly appoint a disinterested, mature and competent person as the third impartial arbitrator ….”

Following the Court’s June 4, 2010 Order, and pursuant to the arbitration agreement in the By-Laws, the parties conducted a private arbitration before an arbitration panel consisting of retired Maryland jurists, the Honorable Dana M. Levitz, the Honorable Paul E. Alpert, and the Honorable Dale R. Cathell.  Before the trial, PH4C filed a First Amended Complaint for Specific Performance and Damages, which included the allegation that Mr. Ancel had been forced to vacate the unit as a result of the water damage and environmental contamination.  The Amended Complaint requested that Defendant be specifically ordered to correct the maintenance failures in a workmanlike manner, using appropriate means and methods.  The Amended Complaint also alleged that the Condominium’s breach of contract and negligence have caused PH4C to suffer “direct and consequential” damages, including but not limited to “loss of value of Unit, payment for the installation and monthly service fees of a security system, exposure to uninhabitable and dangerous living conditions, including exposure to mold spores, removal and correction of mold issues arising, and payment of Council fees that have not been used for its intended purpose.”

The case was heard by the arbitration panel during five days in September 2011.  Numerous experts were called by both sides, including structural and environmental engineers.  Following the trial, the parties were required to submit Proposed Findings of Fact and Conclusions of Law, after which the arbitration panel heard closing arguments from counsel in October 2011.  On November 24, 2011, the majority of the arbitration panel issued its award.  It then found that “[b]ecause of the conditions on PH 4C – water damage, mold growth, and mold deposition, the unit cannot be said to be safe for normal occupancy and a remediation protocol must be followed to correct the problems.”   As a result, the panel awarded PH4C “the sum of $1,252,487.00 as compensatory damages suffered as a result of the Condominium’s negligence and breach of their contractual obligations.”  The panel also ordered and awarded relief to PH4C on its claim for specific performance, as follows.

“The Council must clean the rooftop HVAC unit and the ductwork from those units, through the elevator lobbies on each floor of the building in accordance with the National Air Duct Cleaners Association (NADCA) standards.  The rooftop [exterior ductwork] must be fully insulated.  The work must be completed within 60 days.

 The Council must replace the building’s roof system and repair the exterior facade and other matters in accordance with page 18 of the CSG’s report of August 18, 2009.  The work must be completed within 2 years.”

 PH4C sought to have the arbitration award confirmed by the Circuit Court for Baltimore City, and the Condominium moved to have the award vacated in part and/or modified in part.  The Circuit Court heard oral argument in March 2012, and, on June 5, 2012, issued a Memorandum Opinion in which it denied the Condominium’s request to vacate or modify the arbitration award, and confirmed the award in its entirety.  Pursuant to the Court’s confirming the award, judgment was entered embodying the terms of the arbitration award, giving the arbitration ruling the effect of a court ordered judgment.

The only difference between the two versions was that the House bill provided an exception for condominiums sold by the developer “as is” and without warranties.  This is peculiar since the Condominium Act warranties under Section 11-131 cannot be excluded or modified.  Both versions provided an exception for non-residential condominiums.  We will see if the legislation is renewed at the next session.

The victim in the underlaying case was Dominic Solesky, a 10-year-old boy who in 2007 was mauled by a pit bull.  Solesky was seriously injured in the attack, requiring five hours of surgery, including repair of his severed femoral artery.  He spent seventeen days in the pediatric intensive care unit, had additional surgeries, and spent a year in rehabilitation.  In 2008, his parents filed a complaint seeking money damages against the dog’s owners and their landlord, alleging negligence and strict liability.  The dog’s owners subsequently declared bankruptcy.  At trial, the court ruled that there was insufficient evidence that the landlord knew of the vicious nature of the dog.  In 2011, the Court of Special Appeals reversed the lower court’s decision. The landlord’s insurer appealed to Maryland’s highest court.

In modifying Maryland common law of liability relating to attacks by pit bulls and pit bull-mixes, the Court of Appeals concluded that “because of its aggressive and vicious nature…pit bulls and cross-bred pit bulls are inherently dangerous” and went on to “impose greater duties by reducing the standards necessary to hold owners and others liable for the attacks of their pit bulls.”

Stay tuned for developments as the issue is reconsidered.

For most individuals, the purchase of a new house or condominium unit is the largest investment that they will have ever made.  Moreover, that investment is also a home and place of refuge and relaxation that they share with family and friends.  Few things, therefore, have the potential to be more disturbing than the discovery of construction defect issues that diminish both the enjoyment of the home and its value.  For that reason, new home purchasers inMarylandare afforded various protections in the form of statutory warranties.  They also may receive specific warranties from the seller as part of their purchase agreement.  Additionally, homebuyers may have other statutory and common law rights of action that arise as a result of construction deficiencies.  However, none of these possible remedies provides a certain or easy path to relief.  All such claims are governed by strict statutes of limitations that require considerable diligence or order to preserve the intended benefits.  Pursuing claims is also an expensive and often protracted process that, in addition to the retention of capable legal counsel, also requires the involvement of building consultants who can identify defects, recommend repairs, and offer opinion evidence to support the claim.

This program is intended to shed some light on the issues that confront associations and homeowners when attempting to pursue construction defect remedies, as well as the liability and exposure that effects developers and builders.  It will offer important information for condominium and homewoner associations, unit owners, property managers, developers, builders and contractors.  The is no cost to attend the program.  Here is the link from which you can sign up:

http://www.ober.com/news_events/1836-condominium-new-home-warranties-rights-action

In this case, 23 purchasers of units at Tomes Landing Condominium in Cecil County sued the Council and the condominium’s management company for alleged misleading resale certificates.  The certificates included and operating budget, and stated that there were no known violations of the building or health codes.  Under Section 11-135 of the Condominium Act, the operating budget, including details of the reserve fund for repair and replacement, and knowledge of any health or building code violation, must be disclosed to a prospective unit purchaser.  The subject units were purchased between January 5, 2000 and October 8, 2004.  In December 2004, the owners were notified of a special assessment to fund a $3,921,838 repair project to correct building defects.  An August 1999 Replacement Reserve Study that identified problems with the condominium’s retaining walls had not been disclosed to the owners prior to the purchase of their units.  The suit included a claim that this failure to disclose constituted an unfair and deceptive trade practice under the Consumer Protection Act.  The trial court found that the resale certificate information, as a matter of law, had a tendency to mislead consumers in violation of the Act, and entered summary judgment in favor of the purchasers.  Rather than proceed to trial on the issue of damages, the parties stipulated to a total of $1 million in damages, and the condominium and managing agent took an appeal.

The Court of Appeals granted certiorari before the Court of  Special Appeals ruled, and held in it prior opinion that, while the entry of summary judgment was improper, the unit owners had produced sufficient evidence that, if accepted by the trier of fact, “was sufficient to establish that [the council and management] had utterly failed to comply with the disclosure obligation imposed upon them by Section 11-135(a)(4)(x).”  The failure to meet that disclosure obligation tends to deceive the purchaser, and amounts to an unfair and deceptive trade practice under the Consumer Protection Act.

The unit owners request for reconsider asked  the Court to (1) clarify that a violation of the Consumer Protection Act can occur even if there has not also been a violation of the Condominium Act; and  (2) modify the opinion to address the issue of whether a misrepresentation can occur by virtue of the inclusion of allegedly misleading information in the condominium’s operating budgets as opposed to the resale certificate.  The management company’s request for reconsideration focused on the issue of whether a condominium is required to disclose a building or health code violation in a resale certificate if there has been no violation citation issued by the code enforcement agency.

The new opinion makes clear that a violation of Consumer Protection Act can occur if the operating budgets provided with the condominium resale certificate were deceptive within the meaning of the Consumer Protection Act.   The Court specifically held that the Maryland Condominium Act requires disclosures, while the Consumer Protection Act mandates that those disclosures not be deceptive.”  Accordingly, because the operating budget, including details concerning the reserve fund for repair and replacement, must be disclosed under Section 11-135 of the Condominium Act, if that information is deceptive, it can constitute a violation of the Consumer Protection Act.

On the facts of this case, the Court held that whether the operating budget was deceptive within the meaning of the Consumer Protection Act could not be determined as a matter of law, and, therefore, the entry of summary judgment by the trial court was improper.  As a result, the case was remanded to the trial court for further proceedings.

As to the issue of whether a condominium is required to disclose a building or health code violation in a resale certificate if there has been no violation citation issued by the code enforcement agency, the Court found that this was not a basis for the entry of summary judgment by the trial court, and, accordingly, the issue was not before the Court on appeal.  The Court further noted that counsel for the unit purchasers had abandoned the issue.  Nevertheless, in a footnote, the Court stated that , if it were required to consider the issue, it would hold that the “knowledge” required by the statute is “knowledge of a charged violation.”

Here is a link to the opinion: http://www.ober.com/files/mrapropmgmt-2007.pdf.

            Section 11-131(c) of the Condominium Act provides “an implied warranty on an individual unit from a developer to a unit owner” that is expressly in addition to the warranties provided by Section 10-203.  Indeed, the Court of Appeals has held that the Title 10 warranties and the condominium warranties under Title 11 run concurrently, and aggrieved purchasers may proceed under either or both.  This additional implied warranty is limited to specifically identified components, commences with the transfer of title to that particular unit, and extends for a period of one year.  The warranty makes the developer “responsible for correcting any defects in materials or workmanship in the construction of walls, ceilings, floors, and heating and air conditioning systems in the unit,” and further warrants that “the heating and air conditioning systems have been installed in accordance with acceptable industry standards.  The stated standards are “[t]hat the heating system is warranted to maintain a 70°F temperature inside” and “[t]hat the air conditioning system is warranted to maintain a 78°F temperature inside” when the outdoor temperature and winds are “at design conditions established by the Energy Conservation Standards Act … or those established by the political subdivision” in which the condominium is located.  This establishes what is, essentially, a strict liability standard; i.e., if the existence of a defect is proven, the developer is responsible for damages consisting of the cost of correction.

            Section 11-131(d) provides for “an implied warranty on the common elements from developer to the council of unit owners,” that is also expressly in addition to the implied warranties provided in Section 10-203.  Like the warranty on the units, this common element warranty is also applicable only to specific components, consisting of “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural components.”  The reference to “external and supporting walls” encompasses not only the wall framing members, but cladding systems as well.  The inclusion of “structural components” broadens the application of the warranty to any common element component that is part of the building’s structure and framing, as well as community amenities that have a structural capacity, such as paving, pools, sport courts, curbs, steps and sidewalks, and drainage areas.  Arguably, the specification of these components as being subject to the common element warranty requires that such components be defined as part of the common elements in any condominium regime.  Otherwise, the full scope of the Legislature’s intent in providing the warranty could be negated by excluding some of these components from inclusion in the common elements.  Indeed, the statute presumes that these specified components will be among the common element in every condominium.

            The common element warranty provides “that the developer is responsible for correcting any defect in materials or workmanship, and that the specified common elements are within acceptable industry standards in effect when the building was constructed.”  Like the warranty on the unit, this is a strict liability standard that applies once a defect is demonstrated.

            The common element warranty “commences with the first transfer of title to a unit owner.”  As to any common element “not completed at the first transfer of title,” the warranty commences “with the completion of that element or with its availability for use by all unit owners, whichever occurs later.”  The warranty generally extends for a period of three years from the date of commencement.  However, this provision gave rise to problems in enforcing the warranty in circumstances where a majority of the units, and, therefore, a majority of the condominium’s board of directors, remain in the control of the developer for an extended period of time.  As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of 3 years, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.”

            Significantly, a suit for enforcement of the common element warranty may only be brought by the council of unit owners, and is not actionable by an individual or group of individual unit owners.  Nevertheless, if the council of unit owners is controlled by the developer, and the time for filing a claim may expire, it is arguable that unit owners may be entitled to preserve the claim by acting on behalf of themselves and all unit owners.

            Both the warranty on the units and the common element warranty are subject to a prerequisite notice requirement that is not applicable to the implied warranties under Section 10-203.  In order to be enforced, the Condominium Act warranties require that notice of any defect must be given to the developer “within the warranty period.”  Suit for enforcement must be brought within one year of the end of the warranty period.  Accordingly, as to the warranty on the unit, this creates a maximum period of two years from the date of possession for bringing a claim.  As to the common element warranty, the maximum period is four years in the event that the three-year warranty is applicable, or, if the two-year warranty is applicable, a maximum period of two years from the date that the independent unit owner board of directors is elected.

            It is important to note that the Section 10-203 implied warranties, as they apply to condominiums, and the Section 11-131 implied warranties have separate and distinct periods of limitations.  In Antigua Condominium Ass’n. v. Melba Investors Atlantic, Inc., the Court of Appeals held that the Title 10 warranties applied to newly constructed condominiums independent of Title 11, and therefore, limitations for condominium claims under Section 10-203 are governed by the two year period of limitations established in Section 10-204.

            Unlike the Title 10 warranties, the Title 11 condominium warranties “may not be excluded or modified” by any action or written document.  This recognizes that a condominium purchaser is buying an interest in the common elements of a building, or perhaps a number of buildings, and is not have the same ability as a purchaser of an individual home to inspect the entire premises.  Therefore, the condominium warranties apply regardless of any agreement to exclude them or modify the content.  However, the Title 11 condominium warranties are expressly limited so as not to apply “to any defects caused through the abuse or failure to perform maintenance by a unit owner or the council of unit owners,” and are also inapplicable to non-residential condominium regimes.

            These implied warranties may only be excluded or modified with respect to completed improvements, and only by a written document, signed by the purchaser, that sets for the full text of the warranty and shows the exact exclusions or modifications:

                        Neither words in the contract of sale, nor the deed, nor merger of the contract of sale into the deed is effective to exclude or modify and implied warranty.  However, if the contract of sale pertains to an improvement then completed, an implied warranty may be excluded or modified wholly or partially by written instrument, signed by the purchaser, setting forth in detail the warranty to be excluded or modified, the consent of the purchaser to exclusion or modification, and the terms of the new agreement with respect to it.

            The implied warranties run for “one year after delivery [of the deed] or after the taking of possession by the original purchaser, whichever occurs first,” except that “where the dwelling is not complete at the time of delivery of the deed, one year from the date of completion or taking of possession by the original purchaser, whichever occurs first.”  Additionally, “[i]n the case of structural defects,” the warranties run for “2 years after the date of completion, delivery, or taking of possession, whichever occurs first.”  The warranties do not expire in the event of a subsequent sale by the original purchaser.

            In the event of a defect that constitutes a breach of these warranties, “the court may award legal or equitable relief, or both, as justice requires.”  An action for breach of the warranties “shall be commenced with two years after the defect was discovered or should have been discovered, or within two years after expiration of the warranty, whichever occurs first.”  Accordingly, this creates a maximum period in which a claim must be brought of three years after taking possession, and four years in case of structural defects.  However, the period may be shorter if it is demonstrated that the defect was, or should have been, discovered at a date earlier than the end of the warranty.  Indeed, if the issue should have been observed at the time of possession, the two year period for filing a claim would begin immediately, regardless of whether it involves a structural defect.

            In Starfish Condominium Ass’n v. Yorkridge Service Corp., the Court of Appeals held that the Title 10 warranties were applicable to newly constructed condominium units and, importantly, also to the common elements.  Significantly, it ruled that “one or more of the original purchasing unit owners in the condominium could directly have sued for breach of §10-203 implied warranties as to the common elements and could have sought the entire damages to the common elements.”  This is true even where the claims of some unit owners might be time-barred.  Additionally, it was held that the action could also be brought by the council of unit owners in its representative capacity of two or more unit owners with viable claims.

This proposed requirement also would apply to cooperative housing corporations.  It would not apply to any condominium or homeowners association in which four or fewer units or lots.  It also would not apply to condominiums in which three months worth of gross annual assessments is less than $3,000, or homeowners associations in which three months of gross annual assessments is less than $2,500.  The bill was assigned to the Environmental Matters Committee.

In this case, 23 purchasers of units at Tomes Landing Condominium in Cecil County sued the Condominium Council and the condominium’s management company for alleged misleading resale certificates.  The certificates stated that there were no know violations of the building or health codes.  The subject units were purchased between January 5, 2000 and October 8, 2004.  In December 2004, the owners were notified of a special assessment to fund a $3,921,838 repair project to correct building defects.  An August 1999 Replacement Reserve Study that identified problems with the condominium’s retaining walls had not been disclosed to the owners prior to the purchase of their units.  The suit included a claim that this failure to disclose constituted an unfair and deceptive trade practice under the Consumer Protection Act.  The trial court found that the resale certificate information, as a matter of law, had a tendency to mislead consumers in violation of the Act, and entered summary judgment in favor of the purchasers.  Rather than proceed to trial on the issue of damages, the parties stipulated to a total of $1 million in damages, and the condominium and managing agent took an appeal.

The Court of Appeals granted certiorari before the Court of  Special Appeals ruled, and held that, while the entry of summary judgment was improper, the unit owners had produced sufficient evidence that, if accepted by the trier of fact, “was sufficient to establish that [the council and management] had utterly failed to comply with the disclosure obligation imposed upon them by Section 11-135(a)(4)(x).”  The failure to meet that disclosure obligation tends to deceive the purchaser, and amounts to an unfair and deceptive trade practice under the Consumer Protection Act.

The unit owners asked for reconsider seeking to have the Court (1) clarify that a violation of the Consumer Protection Act can occur even if there has not also been a violation of the Condominium Act; and  (2) modify the opinion to address the issue of whether a misrepresentation can occur by virtue of the inclusion of allegedly misleading information in the condominium’s operating budgets as opposed to the resale certificate.

The management company’s request for reconsideration focuses on the issue of whether a condominium is required to disclose a building or health code violation in a resale certificate if there has been no violation citation issued by the code enforcement agency.

Stay tuned for more on this as the motions for reconsideration are heard and ruled upon.

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In this case, 23 purchasers of units at Tomes Landing Condominium in Cecil County sued the Condominium Council and the management company for alleged misleading resale certificates.  The certificates stated that there were no know violations of the building or health codes.  The subject units were purchased between January 5, 2000 and October 8, 2004.  In December 2004, the owners were notified of a special assessment to fund a $3,921,838 repair project to correct building defects.  An August 1999 Replacement Reserve Study that identified problems with the condominium’s retaining walls had not been disclosed to the owners prior to the purchase of their units.  The suit included a claim that this failure to disclose constituted an unfair and deceptive trade practice under the Consumer Protection Act.  The trial court found that the resale certificate information, as a matter of law, had a tendency to mislead consumers in violation of the Act, and entered summary judgment in favor of the purchasers.  Rather than proceed to trial on the issue of damages, the parties stipulated to a total of $1 million in damages, and the condominium and managing agent took an appeal.

The Court of Appeals granted certiorari before the Court of  Special Appeals ruled, and held that, while the entry of summary judgment was improper, the unit owners had produced sufficient evidence that, if accepted by the trier of fact, “was sufficient to establish that [the council and management] had utterly failed to comply with the disclosure obligation imposed upon them by Section 11-135(a)(4)(x).”  The failure to meet that disclosure obligation tends to deceive the purchaser, and amounts to an unfair and deceptive trade practice under the Consumer Protection Act.

In reaching is decision on the application of the Consumer Protection Act, the Court cited and quoted from a publication of mine, Raymond Daniel Burke, Kathleen M. Elmore and Cynthia Hitt Kent, Developing and Managing Condominium and Homeowners’ Associations, National Business Institute (2007), in which I wrote:  “Md. Com. Law Code Ann. Sec. 13-408(a) establishes a private cause of action for damages sustained as a result of an act prohibited by the Consumer Protection Act.  The Act is specifically applicable to ‘consumer realty,’ and, accordingly, representations made in connection with the sale of real property may constitute unfair and deceptive trade practices where they are misleading.”

 The complaint filed on behalf of the unit owner included a cause of action under the Maryland Consumer Protection Act, which provides for the award of attorney’s fees.  The Court accepted our argument that, because the damages that can be awarded under the Consumer Protection Act could not be awarded in arbitration, the Consumer Protection Act claim was not subject to the arbitration agreement, and can proceed in Court before a jury.

In the case of Avalon Court Six, in addition to the fact that the council of unit owners had the duty to maintain the common elements, its board of directors had the exclusive right to bring a suit relating to the common elements.  Suit was filed against the developer in August 2006.   However, it was held that the claim was not filed within the applicable statute of limitations.  The Circuit Court for Baltimore County found that the council’s board of directors was on notice of the existence of defects in the common elements, at the latest, in June 2002 when it received responses to a memorandum sent to all owners by its property manager requesting information concerning water leaks.  As a result, the Circuit Court held that the general three-year period of limitations expired in June 2005.  It was found, in fact, that the board did not retain an engineering firm to undertake a proper investigation of leakage until September 2005.  The report of that investigation was received in December 2005.

Unable to recover from the developer or its insurer, in order to effectuate the necessary repairs, increased assessments and special assessments were imposed on the unit owners.  In January 2008, a group of individual unit owners filed suit against the council for the board’s failure to maintain the common elements by pursuing a timely claim against the developer.  The unit owners claimed damages in the form of the increased and special assessments.  The condominium’s insurer provided a defense to this action through the board of director’s liability policy.  The Circuit Court for Baltimore County entered summary judgment in favor of the council, finding that the individual owners had no right of action against the council, and/or that suit was filed too late, since the owner knew of the defects in 2002.  I was then retained to pursue an appeal from this ruling.

In an opinion filed on August 17, 2011 in Case No. 0485, Sept. Term 2009, the Court of Special Appeals reversed, expressly holding that the individual unit owners have a right of action against the council of unit owners for the board’s failure to properly execute its duty to pursue a timely claim against the developer for defects in the common elements.  It also found that their action had been timely filed.  This is the first Maryland appellate decision recognizing the right of individual condominium unit owners to file suit where the board of directors has failed to pursue a timely claim relating to defects in the common elements.

Section 11-131(c) of the Condominium Act provides “an implied warranty on an individual unit from a developer to a unit owner” that is expressly in addition to the warranties provided by Section 10-203. Indeed, the Court of Appeals has held that the Title 10 warranties and the condominium warranties under Title 11 run concurrently, and aggrieved purchasers may proceed under either or both. This additional implied warranty is limited to specifically identified components, commences with the transfer of title to that particular unit, and extends for a period of one year. The warranty makes the developer “responsible for correcting any defects in materials or workmanship in the construction of walls, ceilings, floors, and heating and air conditioning systems in the unit,” and further warrants that “the heating and air conditioning systems have been installed in accordance with acceptable industry standards.” The stated standards are “[t]hat the heating system is warranted to maintain a 70°F temperature inside” and “[t]hat the air conditioning system is warranted to maintain a 78°F temperature inside” when the outdoor temperature and winds are “at design conditions established by the Energy Conservation Standards Act … or those established by the political subdivision” in which the condominium is located. This establishes what is, essentially, a strict liability standard; i.e., if the existence of a defect is proven, the developer is responsible for damages consisting of the cost of correction.

Section 11-131(d) provides for “an implied warranty on the common elements from developer to the council of unit owners,” that is also expressly in addition to the implied warranties provided in Section 10-203. Like the warranty on the units, this common element warranty is also applicable only to specific components, consisting of “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural components.” The reference to “external and supporting walls” encompasses not only the wall framing members, but cladding systems as well. The inclusion of “structural components” broadens the application of the warranty to any common element component that is part of the building’s structure and framing, as well as community amenities that have a structural capacity, such as paving, pools, sport courts, curbs, steps and sidewalks, and drainage areas. Arguably, the specification of these components as being subject to the common element warranty requires that such components be defined as part of the common elements in any condominium regime. Otherwise, the full scope of the Legislature’s intent in providing the warranty could be negated by excluding some of these components from inclusion in the common elements. Indeed, the statute presumes that these specified components will be among the common element in every condominium.

The common element warranty provides “that the developer is responsible for correcting any defect in materials or workmanship, and that the specified common elements are within acceptable industry standards in effect when the building was constructed.” Like the warranty on the unit, this is a strict liability standard that applies once a defect is demonstrated.

The common element warranty “commences with the first transfer of title to a unit owner.” As to any common element “not completed at the first transfer of title,” the warranty commences “with the completion of that element or with its availability for use by all unit owners, whichever occurs later.” The warranty generally extends for a period of three years from the date of commencement. However, this provision gave rise to problems in enforcing the warranty in circumstances where a majority of the units, and, therefore, a majority of the condominium’s board of directors, remain in the control of the developer for an extended period of time. As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of 3 years, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.”

Significantly, a suit for enforcement of the common element warranty may only be brought by the council of unit owners, and is not actionable by an individual or group of individual unit owners. Nevertheless, if the council of unit owners is controlled by the developer, and the time for filing a claim may expire, it is arguable that unit owners may be entitled to preserve the claim by acting on behalf of themselves and all unit owners.

Both the warranty on the units and the common element warranty are subject to a prerequisite notice requirement that is not applicable to the implied warranties under Section 10-203. In order to be enforced, the Condominium Act warranties require that notice of any defect must be given to the developer “within the warranty period.” Suit for enforcement must be brought within one year of the end of the warranty period. Accordingly, as to the warranty on the unit, this creates a maximum period of two years from the date of possession for bringing a claim. As to the common element warranty, the maximum period is four years in the event that the three-year warranty is applicable, or, if the two-year warranty is applicable, a maximum period of two years from the date that the independent unit owner board of directors is elected.

It is important to note that the Section 10-203 implied warranties, as they apply to condominiums, and the Section 11-131 implied warranties have separate and distinct periods of limitations. In Antigua Condominium Ass’n. v. Melba Investors Atlantic, Inc., the Court of Appeals held that the Title 10 warranties applied to newly constructed condominiums independent of Title 11, and therefore, limitations for condominium claims under Section 10-203 are governed by the two year period of limitations established in Section 10-204.

Unlike the Title 10 warranties, the Title 11 condominium warranties “may not be excluded or modified” by any action or written document. This recognizes that a condominium purchaser is buying an interest in the common elements of a building, or perhaps a number of buildings, and is not have the same ability as a purchaser of an individual home to inspect the entire premises. Therefore, the condominium warranties apply regardless of any agreement to exclude them or modify the content. However, the Title 11 condominium warranties are expressly limited so as not to apply “to any defects caused through the abuse or failure to perform maintenance by a unit owner or the council of unit owners,” and are also inapplicable to non-residential condominium regimes.

Under current law, a purchaser of a new condominium unit has an absolute right to rescind their sales contract within 15 days after receiving the documents and information required to be provided to all new condominium purchasers.  The purchaser is not required to state any reasons for the rescission.  Section 11-126(b) contains the long list of materials that must be furnished to a new condominium purchaser, which are normally part of the Public Offering Statement for the condominium.  Under Section 11-126(d), the material provided cannot be amended “without the approval of the purchaser if the amendment would affect materially the rights of purchaser.  There is are exceptions for amendments required by a governmental authority or public utility, or “if the amendment is made as result of actions beyond the control of the vendor or in the ordinary course of affairs of the council of unit owners.”   In the event of an amendment, the purchaser has a right to rescind the contract with 5 days of receipt of the amendment.

Under the new law, purchaser maintain their right to rescind after receiving the required documents, and may still do so without stating a reason.  However, a purchaser seeking to rescind after an amendment of the documents must state reasons in writing showing that (1) that they have approval right; that is, that the amendment is not within one of the exceptions that do not require purchaser approval; and (2) that “the amendment affects materially and adversely the rights of the purchaser.

The original bill proposed a priority for six months of assessments in accordance with the recommendation of the 2006 Maryland Task Force on Common Ownership Communities, but that provision was amended to four months.  An amendment also added the $1,200 cap.

The new law also amends Section 11B-117 of the Homeowners Association Act to provide the same four month priority for unpaid assessments due to homeowner associations.  The same limits applicable to condominium assessments apply; that is, assessments are capped at $1,200; only the principal amount of regular assessments receives a priority; the homeowners association must provide requested written information to the lender; and the priority is applicable to only mortgages and deeds of trust recorded after October 1, 2011.

Recognizing that restrictions on leasing are common in condominium communities, and are intended to promote stable property values, on March 18, 2011, the FHA issued a waiver.  The waiver, which runs for a period of one year, removes “lease” from the definition of conveyance contained in the regulation.  Accordingly, mortgages on condominiums with lease restrictions will qualify for FHA financing until March 18, 2012.  The following requirements are applicable:

     All leases must be in writing and subject to the declaration and by-laws of the condominium project.

     The condominium association may request and receive a copy of the sublease or rental agreement.

     The condominium association may not require that a prospective tenant be approved by the condominium association and/or its agent(s), including, but not limited to, meeting creditworthy standards.

     The condominium association may request the name(s) of all tenants, including the tenant’s family members who will occupy the unit.

     Unit owners are prohibited from leasing their units for an initial period of less than 30 days.

     The condominium association may establish a maximum allowable lease term, e.g., six months, twelve months, etc.

     The condominium association may establish a maximum number of rental units within the project; however, the percentage of rental units may not exceed the current FHA condominium project owner-occupancy requirement.  (The FHA requires that at least 50% of units be owner-occupied).

The Senate bill, which is sponsored by Senators Mathias and Manno, has been referred to the Judical Proceedings Committee, and the House bill, which is sponsored by Delegates Conway, Arora, Bobo, Braveboy, Cullison, Frush, Kramer and Nieman, has been referred to the Environmental Matters Committee.

The 2006 Maryland Task Force on Common Ownership Communities recommended that delinquent assessements receive a priority lien for six months of assessments, late fees, attorney fees, and cost of collection.  During the 2010 session of the General Assembly, the House passed a bill providing for a four month assessment priority.  That bill also required that each unit owner post a two-month security deposit, so that the association would have the benefit of a six month cushion.  The security deposit requirement was criticized by some as placing an undue burden on homeowners.  The bill evenually died in the Senate.

Condominium and homeowner associations continue to be impacted by the recession and depressed real estate values.  Unit owners who are unable to keep up with their mortgage payments often become delinquent in their fee assessment payments as well.  This, of course, damages the association, whose ability to operate is entirely dependent upon timely payment of assessments by all unit owners.  And even when an association pursues all of it available statutory remedies, including placing a lien on the unit, the properties are usually subject to a mortgages, home equity lines, and other secured loans from banks and lending institutions that have first priority.  This prevents the association from foreclosing and taking ownership for purposes of selling the unit.    But a further complication arises when the lender holding the superior lien fails to move forward with it own foreclosure on such properties.

When lenders assume ownership of properties through foreclosure, they become responsible to the association for assessements applicable to the unit from the time that they take title.  Essentially, the lender becomes the unit owner.  However, not all lenders who are entitled to foreclose on a property proceed with foreclosure.  In some cases, the lenders are waiting for the market to improve, or simply are carrying too many troubled properties to take on more.  Whatever the reason, they can avoid the responsibilites of ownership by simply not going forward with foreclosure.  When this happens, and the delinquent unit owner has vacated the unit, the association is left to deal with a vacant property wand no one responsible  for paying its share of association expenses.

According to the Community Associations Institute, a large percentage  of lender-owned homes are not making timely assessment payments.  Add to those the vacant units where the lender has failed to take ownership, and the number of non-paying units becomes staggering.  In some jurisdictions, the problem is so acute that the legal community has been called upon to find creative ways to address it.  One method is an action to “quiet title.”  Such actions can generally be brought by any person or entity with constructive possession of a property under color of title or claim against another person or entity claiming title through, for example a lien.  A condominium or homeowners association with a lien on a unit for unpaid assessment may qualify as holding a sufficient claim of possession so as to be entitled to bring such an action.  The suit is intended to remove any cloud on the title and resolve disputes as to ownership interest.

Arguably, such a suit could require the lender to either move forward with foreclosure or release its claim and allow the association to take title.  In some places, this process has come to be called “the mortgage terminator,” and particular attention has been given to a case involving a Miami condominium unit in which Citibank held the mortgage.  The condominium association, which had a lien on the unit for unpaid assessments, sued when Citibank failed to move forward with foreclosure.  The parties reached a settlement that reportedly allowed the association to take title.

A Maryland statute, Md. Real Prop. Code Ann. Sec. 14-108, specifically provides for “quiet title” actions.  The right lawyer may be able to utilize this procedure to either force lenders to foreclose, take title, and begin paying assessments, or to give up their claim to the property and allow the association to foreclose on its lien.

Section 11-131(c) provides “an implied warranty on an individual unit from a developer to a unit owner” that is expressly in addition to the warranties provided by Section 10-203. This addition implied warranty is limited to specifically identified components, commences with the transfer of title to that particular unit, and extends for a period of one year. The warranty makes the developer “responsible for correcting any defects in materials or workmanship in the construction of walls, ceilings, floors, and heating and air conditioning systems in the unit,” and further warrants that “the heating and air conditioning systems have been installed in accordance with acceptable industry standards.” The stated standards are “[t]hat the heating system is warranted to maintain a 70°F temperature inside” and “[t]hat the air conditioning system is warranted to maintain a 78°F temperature inside” when the outdoor temperature and winds are “at design conditions established by the Energy Conservation Standards Act … or those established by the political subdivision” in which the condominium is located.

 In 1999, the Dhawans contracted for the construction of a new townhome in the King Farm community along the I-270 corridor in Montgomery County, which they had built to their requirements, including a finished basement level. They moved into the completed home in April 2000.   In August 2006, the Dhawans noticed a musty odor from behind a cabinet in the finished basement level of their home.   After removing the cabinet system they discovered that a section of wall had been severely damaged by water intrusion.   Subsequent investigations revealed water damage in other areas of the basement, and further demonstrated that the moisture intrusion had resulted in extensive microbial growth and mold contamination.   It was ultimately discovered that one of the exterior walls had been improperly constructed with the use of untreated wood framing below grade, and that interior grade drywall had been used as exterior sheathing. Additionally, it was learned that the patio slab outside of the basement entrance had been improperly installed below the level of the floor slab.

Evidence as to code violations and deviations from industry standards was presented on the Dhawans’ behalf through a structural engineer, who also provided a repair specification.   Evidence of microbial contamination was presented through an environmental engineer, who established a protocol for the mold remediation component of the repair.   A contractor provided pricing for both the structural repairs and environmental remediation.   After a four day jury trial before The Honorable Ronald B. Rubin in the Circuit Court for Montgomery County in Rockville, a six member jury found for the Dhawans on all three counts, and awarded compensatory damages of $104,429.59, and, under the CPA, $121,143.39 in legal fees, for a total jury award of $225,572.98. In addition to the legal fees, the award included compensation for (1) loss of use of a portion of the home; (2) the cost of temporary repairs already undertaken; (3) the cost of interim mold remediation; (4) the cost of a permanent repair; (5) the cost of a final mold remediation and validation; and (5) the costs of the structural and environmental engineering investigations. The last item was based on a finding that the Dhawans were entitled to recover, as consequential damages, their expert expenses relating to the engineering investigation, the identification of the defects, and development of repair specifications and remediation protocol.

 As to the CPA, the jury found that Churchill had knowledge of code violations, deviations from industry standards, and deviations from the project drawings prior to the sale of the home, and that the failure to disclose those facts constituted unfair and deceptive trade practices within the meaning of the Act.   The jury was also charged with finding when the CPA claim had accrued for limitations purposes.   The CPA claim was not part of the original claim, but was added by amendment after additional defects were discovered. In particular, while a contractor was determining how much exterior siding needed to be removed for purposes of establishing the cost of repair, it was revealed that the improper interior grade drywall was used as an exterior sheathing for the entire height of one wall of the house, and was not limited to only the basement level.   The Defendant was compelled to acknowledge that it would have been aware of those conditions during construction, but moved for summary judgment as to the CPA claim on the ground that the Plaintiffs should have investigated and discovered the additional defects after the original defects appeared. The jury found that the CPA had not accrued as to those conditions until they were discovered by the Dhawans’ contractor.

 The CPA provides that reasonable attorney’s fees may be awarded for a private cause of action under the Act.   The jury awarded all legal fees that had been billed for the case.  It further advised that it wished to award legal fees for services that had not yet been billed, including the time involved in the trial.   As a result, it was determined my firm could submit to the Court additional invoices, following the trial, for services rendered since the last invoice presented to the jury.   Judge Rubin considered these supplemental invoices, and at a hearing on December 16, 2010, entered an order awarding additional legal fees in the amount of $182,176.02, for a total legal fee award of $303,319.41, bringing the total judgment award to $407,749.00.

 The case was originally filed in 2007, but was the subject of an appeal after the Circuit Court granted the Defendant’s motion to stay the case in favor of arbitration under a warranty policy that had been issued in connection with the sale of the house, despite the fact that the warranty company had already determined that there was no coverage under the policy for the claimed defects.  I have written about lack of coverage under such warranty policies in previous posts.   The Court of Special Appeals ruled that the warranty policy offered no coverage for and was inapplicable to the defects alleged by the Dhawans, held that the parties were not required to arbitrate under the policy, and remanded the case to the Circuit Court.   The motion and appeal process consumed more than two years of the litigation process, resulting in considerable legal fees.

In response to various comments and questions some of you have been kind enough to share on this blog, I am going to be authoring a series of posts that address some of these issues, as they relate to condominium and new home warranties, homeowner association warranties, seller’s warranties, contract claims,  and common law causes of action.  These matters will be addressed from the standpoint of both associations and individual owners.  In the meantime, if there are any issues along these lines that are of particular interest, please feel free to send a comment.

Like all housing, the sales of condominiums have been significantly impacted by the state of the housing market. Also effecting sales are new rules and regulations applicable to government backed loans, as well as those adopted by conventional lenders. In particular, new requirements for FHA financing directly concern condominium sales. As of February 1, 2010, the FHA now requires that an entire condominium project be FHA approved, discontinuing the prior “spot approval” for the sale individual units. Significantly, these regulations preclude FHA financing where 15% or more of the units are delinquent in paying fees and assessments. Additionally, only 50% of the units in a project may receive FHA financing, and that ratio will be reduced to 30% after 2010.

HUD Section 234(c) of the National Housing Act provides for government insurance to lenders against losses on mortgage loans for purchase or refinance of condominium units. Condominium projects often had FHA approval at the time they were constructed and units were first offered for sale by the developer. If not, there was previously a “spot approval” process for the financing of sales of individual condominium units. As of February, however, the entire condominium must be an FHA approved project. Unless a project is already on the approved list, the condominium must apply for approval in order for FHA financing to be offered in connection with unit sales.

In order to apply, existing condominium must meet certain eligibility guidelines:

  –  The Council of Unit Owners must have a completed the HUD questionnaire.

   – The condominium must be completed, with no on-going or anticipated addition of common elements, units or other facilities.

   – At least 50% of the units must be owner occupied.

   – No more than 15% of the units may be delinquent for more than thirty days with respect to the payment of fees and assessments.

   – FHA insurance will be available to only 50% of loans in any Condominium until December 31, 2010, after which this limit will decrease to 30%.

   – The Council of Unit Owners’ insurance premiums and deductibles must be included as part of the annual operating budget.

   – The condominium must secure fidelity coverage in an amount equal to three months aggregate assessments plus reserve funds.

  –  The condominium’s insurance policy must cover 100% of the replacement cost exclusive of the land.There may not be any litigation, other than that related to assessment collection. However, the FHA will, on a case by case basis, consider requests for exemptions for pending litigation.

   – The condominium must not be a party to litigation, except for that related to the collection of delinquent assessments.  However, a request for an exemption for pending litigation will be considered on a case by case basis.

   – The condominium may not permit daily rentals.

Once approval is obtained, it is good for two years. Any community that is unsure as to whether it is on the approved list, or wishes to obtain information on applying for approval, should contact the local HUD office. Condominiums in Maryland can contact the Baltimore field office at The City Crescent Building, 10 South Howard Street, Fifth Floor, Baltimore, Maryland 21201, 410-962-2520. Condominiums in Montgomery and Prince George’s Counties can also contact the Washington field office at 820 First Street, NE, Suite 300, Washington, D.C. 20002, 202-275-9200.

A final note on pending litigation: The involvement of a condominium in litigation, except that relating to the collection of delinquent assessments, is always an issue in connection with financing for sales or refinancing of units. This is true for conventional loans, as well as government backed financing. However, commercial lenders and HUD will make exceptions, provided that they are given with sufficient information on the nature of the law suit, and its anticipated duration and outcome.

       The Maryland General Assembly passed House Bill 620, which, if signed into law by the Governor, will take effect on October 1, 2010. The newly enacted law will expand common element and common area warranty protections in condominiums and homeowners associations beyond the period of a developer’s control. It extends the implied condominium common element warranty, by providing that the warranty run for two years from the election of the first board of directors controlled by the unit owners. Similarly, it provides that the implied warranty on homeowner association common areas be extended to run for two years from the election of the first governing body controlled by the homeowners. It also requires that the common elements identified in a condominium declaration be consistent with those components that are specified as being subject to the common element warranty provisions under the Maryland Condominium Act. The Legislature did not, however, pass the proposed Residential Sustainability Act that would have provided some limited relief to condominiums and homeowners associations where foreclosure sales do not result in sufficient funds to cover unpaid association assessments.

Section 11-131(d) of the Maryland Condominium Act provides that there is an implied warranty on certain specified components of the common elements; namely, “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements.” An issue and potential loophole arose, however, whenever a condominium declaration identified these components, or any part of them, as being included within the units rather than the common elements. The new enactment amends Section 11-103(a)(4) of the Condominium Act, which concerns the required content of a condominium declaration, for all condominiums created on or after October 1, 2010. New subsection (4)(ii) provides that “the description of the common elements shall include the” same five components listed in Section 11-131(d), “to the extent that the improvements are shared by or serve more than one unit or serve any portion of the common elements.” This ensures that developers cannot use the declaration to define these specified components as part of the units, and thereby avoid the intent of the law that these components be subject to the common element implied warranty, provided that the components serve more than one unit or serve the common elements. Additionally, the new subsection provides that “the description and designation of the common elements … may not be amended until after the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners.” This prevents the developer from modifying the definition of common elements during the period of time that it controls the condominium’s board of directors.

With regard to the common element warranty itself, Section 11-131(d)(3) of the Condominium Act presently provides that the warranty “commences with the first transfer of title to a unit owner,” and “extends for a period of 3 years.” For common elements not completed as of the first transfer of title, the three years commences “with completion of that element or with its availability for use by all unit owners, whichever occurs later.” In many instances, however, unless condominium units sell quickly, the developer can maintain control of a majority of the council of unit owners for several years; sometimes even until after the three-year warranty has expired. The new enactment is intended to address this. It retains the provision that the warranty extends for a period of 3 years from the first transfer of title to a unit owner, or, with respect to an incomplete element, from its completion or availability for use, whichever is later; but also provides that the warranty may run for “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, which ever occurs later.” As a result, developers who maintain control of a majority of the units for the first several years cannot avoid responsibility for the common element warranty, because the unit owners will still have at least a two year warranty from the time they assume majority control.

As to the homeowner association warranty, Section 11B-110(a) of the Maryland Homeowners Association Act now provides that there is an implied warranty on improvements to the common area, which runs for a period of one year. It “begins with the first transfer of title to a lot to a member of the public by the vendor of the lot.” For improvements not completed at the time of the first transfer of title, the warranty commences “with the completion of the improvement or with it availability for use by lot owners, whichever occurs later.” As in the case of the condominium common element warranty, this meant that a developer that maintains majority control of the association could avoid the warranty obligation. The new enactment make two significant changes. First, it extends the warranty from one to two years, commencing with the first transfer of title to a lot, or, with regard to an improvement not completed at the time of first transfer, from its completion or availability for use, whichever is later. Additionally, it also amends Section 11B-110(a)(3) to provide that the warranty may also commence “2 years from the date on which the lot owners, other than the declarant and its affiliates, first elect a controlling majority of the members of the governing body of the homeowners association,” if this would result in a later date for commencement of the warranty period.

House Bill 842, known as the Residential Association Sustainability Act of 2010, would have provided that a specified portion of a lien on a condominium unit or lot in a homeowners association, would, in certain circumstances, have a priority over any future first mortgage or deed of trust recorded after October 1, 2010. This was intended to assist condominiums and homeowners associations that have been left with unpaid assessments, despite having obtained a lien on the property, where the proceeds of a foreclosure sale are exhausted by the outstanding mortgage debt. This measure was defeated.

            The common element warranty under Md. Real Prop. Code §11-131(d) provides that “the developer is responsible for correcting any defect in materials or workmanship” in certain specified common element components, and warrants “that the specified common elements are within acceptable industry standards in effect when the building was constructed.”  The applicable components identified in the statute are “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements.”

            The warranty runs for three years.  However, it “commences with the first transfer of title to a unit owner.”  Accordingly, if the first unit owner purchaser in the complex took title three years before a subsequent purchaser, the warranty would have expired before the subsequent purchase, and would no longer be of any effect.

            The only circumstances which cause the three-year warranty to commence at a date later than the date the first purchaser took title is where any portion of the common elements has not been completed at the time of the first closing.  In that event, the three-year warranty commences “with the completion of that element, or with its availability for use by all owners, whichever occurs later.”  This is particularly applicable in mult-building projects that are built in phases.  As each new building is completed, a new three-year warranty commences on the specified common elements that are part of the new building.  Nevertheless, the original three-year warranty that arose when the first purchaser in the community took title is still the warranty that is applicable to the earlier completed portions of the complex.

            As a result of this, it is entirely possible to purchase in a condominium community and receive the benefit of the three-year common element warranty on only some of the buildings.  Moreover, a warranty that commences upon completion of a later building, rather than at the time the first title passed to a unit, can still expire before subsequent purchasers join the community.  Depending on the size of the community and the phases of construction, a subsequent purchaser could buy into a community in which the three-year common element warranty has expired as to some, most, or all of the buildings.

            That does not mean, however, that later purchasers are entirely without warranty protection for common element defects.  The Maryland statute expressly provides that the three-year common element warranty “is in addition to the implied warranties set forth in §10-203 of” the Real Estate Code.  The §10-203 warranties are applicable to every sale of a new home in Maryland, including condominiums, unless they have been contractually excluded or modified in accordance with the statute’s requirements.  These are broad general warranties that provide that the new home, when delivered, is (1) free from faulty materials; (2) constructed according to sound engineering standards; (3) constructed in a workmanlike manner; and (4) fit for habitation.  The Maryland Court of Appeals has expressly held that, in the case of newly purchased condominium unit, the §10-203 warranties apply to both the unit and the common elements, because each owner acquires an undivided ownership in the common elements as well as ownership of their individual unit.  Starfish Condominium Association v. Yorkridge Service Corp., 295 Md. 693, 458 A.2d 805 (1983).

            Unlike the three-year common element warranty that is enforceable only by the council of unit owners, the §10-203 warranties are personal to each unit owner, and commence when each unit owner takes title, without regard to when an original purchaser took title, or when a common element component was completed.  Additionally, they are not limited to the specified common elements identified in §11-131, but, instead, apply to all of the common elements without limitation.  However, the §10-203 warranties run for only one year, except as to structural defects, in which case there is a two-year warranty.

            An action by the council of unit owners to enforce the three-year warranty must be brought within one year of the expiration of the warranty.  Significantly, such a claim cannot be made unless notice of the defect was given to the developer while the warranty was applicable and before it expired.  An action by a unit owner, or by the council acting on behalf of two or more unit owners, under the §10-203 warranties must be brought “within two years after the defect was discovered or should have been discovered or within two years after the expiration of the warranty, whichever occurs first.”  There is no requirement that notice first be given to the developer during the warranty period.

            Purchasers of new condominiums should be certain that they understand the status of the three-year common element warranty at the time of their purchase.  They need to know when title passed to the first unit owner in the community.  They also need to determine if the common elements were built in phases or if any portions were completed and available for use at varying times.  Otherwise, they could find that the warranty they believe they had no longer exists.

            Captain’s Galley became a memorable project, not only because it was one of the first in Maryland to incorporate the LEED rating into the contract documents, but because it became one of first anywhere to result in litigation arising, in part, from the general contractor’s alleged failure to comply with the environmental design standards.  In the suit filed in the Circuit Court for Somerset County, the developer, along with other claims, sought damages for the loss of the tax credits as a consequence of the alleged failure of the building to meet the contractually specified LEED standards.

            As the contractual adoption of environmentally related requirements becomes more common, as the result of increasing financial incentives, market forces driven by sustainable building benefits, and government mandates, issues as to whether the finished produce comports with the applicable standards will surely follow.  Potential liability flowing from green building standards can be expected to become an increasingly important issue in everything from the clarity of design documents, to inspection and supervision responsibilities, to standards of care, to insurance coverage, to warranty obligations, to the propriety of the certification procedure.

           The LEED rating system established by the U.S. Green Building Council is the best known and contains the most often cited criteria for sustainable building development.  Its credit system covers a wide range of design and construction procedures, and is intended to promote buildings that are both environmentally responsible and provide a healthy environment for occupants.  Site credits promote such activities as managing storm water by reducing runoff and conserving natural vegetation, providing alternative transportation, reducing light pollution.  Water efficiency credits can be earned by creating a water efficient landscape, adopting innovative wastewater technologies, and reducing overall water usage.  Energy credits are aimed at controlling energy waste, atmospheric conditions, and building impact through such methods as on-site renewable energy and enhanced refrigerant management.  Materials credits encourage the use of renewable, recycled and recyclable components.  And indoor air quality credits apply to such categories as ventilation, monitoring, the use of low-emitting materials, thermal comfort, and the availability of daylight and views.

            Another widely recognized program, Green Globes, sponsored by the Green Building Initiative, which establishes a rating and certification system through an assessment protocol, software tools, and use of profession assessors in the categories of energy, indoor environment, site impact, water, resources, emissions, and environmental management.

            A project that intends to meet any of the LEED or Golden Globes requirements must have both specificity in the contract documents, and qualified construction oversight and supervision.  The consequences of non-compliance can be enormous, especially if the applicable standards are used to determine (1) the availability of a tax credit; (2) comply with a government mandate; or (3) form the basis for the project’s ultimate marketing and representations as to product that will be delivered.

            There is also the growing prospect of more government mandated compliance.  Last year, the Maryland General Assembly passed legislation which adopted environmental requirements for new state buildings and public schools, and utilizes both LEED and Golden Globes standards.  This will result in new contractual obligations and performance standards for contractors involved in state construction.

            Finally, the positive image and desirability of sustainable construction continues to grow.  From companies wanting to offer competitive work environments to employees, to owners seeking energy efficiency, to simple consumer environmental awareness, market forces are pushing the green building revolution.  With that comes the potential for liability based on new and evolving standards of due diligence in ensuring that the design and construction are as green as intended.

            In 1990, the Maryland General Assembly enacted legislation allowing new home builders to offer “new home warranty security plans,” and set certain minimum warranty requirements.  Md. Real Prop. Code Ann. §10-601 et seq.  Builders were authorized to participate in a security plan offered by a warranty company.

            For the first year, the law requires, at a minimum, that the plan provide that “the new home is free from any defects in materials and workmanship.”  This appears to offer some special benefit, but it really does not.  In practice, most of these warranty plans provide that the builder, not the warranty company, is responsible for correcting defects during the first year.  But this obligation already exists by virtue of Md. Real Prop. Code Ann. §10-203, which requires a warranty that all new homes are (1) free of faulty materials; (2) constructed according to sound engineering standards; (3) constructed in a workmanlike manner; and (4) fit for habitation.  This statutory new home warranty runs for one year for defects in general, and two years for structural defects.

            Condominium purchasers receive further statutory warranties in addition to those provided to all new home purchasers.  Under Section 11-131 of the Maryland Condominium Act, every new condominium unit is also warranted for one year against “any defects in materials or workmanship in the construction of walls, ceilings, floors, and heating and air conditioning systems;” and it is further warranted that the heating and air conditioning systems will meet certain performance standards for maintaining temperature.  And the significant portions of the common elements of a condominium, including “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural elements” are warranted by law for three years from the transfer of title to the first unit in the complex.

            The warranty plan law also requires that, for two years, there be a warranty against “any defect in the electrical, plumbing, heating, cooling, and ventilating systems.”  However, it is expressly provided that, if the mechanical “appliance, fixtures, and items of equipment” are covered by a manufacturer’s warranty, the warranty plan coverage “may not exceed the length and scope of the warranty offered by the manufacturer.”  In reality therefore, the warranty plans offer no coverage beyond the applicable manufacturer’s warranties that the homeowner would be entitled to in any event.  Moreover, like the first year coverage, most warranty policies make this two-obligation for mechanical systems the responsibility of the builder, and there is no coverage available from the warranty company itself.

            Finally, the warranty plan law provides that there must be coverage for five years providing that “the new home is free from any structural defect.”  However, a “structural defect” is defined as “any defect in the load-bearing portions of a new home that adversely affects its load-bearing function to the extent that the home becomes or is in serious danger of becoming unsafe, unsanitary, or otherwise uninhabitable.”  In other words, it has to be a condition that should cause the homeowner to run for their lives.

            Warranty companies have generally extended this coverage to ten years; giving rise to the common reference to ten-year policies.  But, as a practical matter, the coverage is quite limited.  In addition to the extreme nature of the condition that must exist to establish “a structural defect,” typical policies exclude coverage for building code violations.  It is difficult to envision a set of circumstances in which a significant structural defect could exist without the applicable building code having been violated.  Most warranty plan policies contain many more exclusions that preclude coverage even where the defective condition rises to the level of a “structural defect” as defined.  These include exclusion of specific building components which the policies choose to define as non-structural.

            New home buyers, therefore, should be very cautious with the extent to which they place confidence in builder warranty plans.  Special attention should be given to the specific terms of the applicable coverage so that the buyer has a clear understanding of whether the warranty plan truly offers any meaningful benefit.

Section 11-114 of the Maryland Condominium Act has long imposed a specific duty on a council of unit owners to maintain “[p]roperty insurance on the common elements and units, exclusive of improvements and betterments installed in the units by unit owners,” along with general liability insurance.  In response to this requirement, it was common practice for councils of unit owners to obtain insurance coverage for all elements of the condominium as originally constructed by the developer, including the units, with individual unit owners insuring improvements to the unit not provided by the developer, along with insuring personal property in the unit.

Section 11-114 also provided that any deductible applicable under the property insurance policy was a common expense of the condominium, regardless of whether the cause of the damage originated in the common elements or an individual unit.  However, it authorized that the condominium’s bylaws could provide for a unit owner to be responsible for the deductible, if the cause of the damage originated in their unit, but only up to a maximum, initially of $1,000, and then increased to$5,000 by a 2008 amendment.

Then along came the Court of Appeals decision in Anderson v. Council of Unit Owners of the Gables in Tuckerman Condominium, 404 Md. 560 (2008)..  The Court granted certiorari to consider two consolidated cases, one arising at The Gables on Tuckerman Condominium in Rockville, and the other at the Bridgeport Condominium in Laurel.  In the Rockville case, a leaking water heater within a unit had caused damage to the unit, without damage to any other unit or the common elements.  In the Laurel case, a kitchen grease fire caused the sprinkler system to activate, damaging the unit, but, again, causing no damage to other units or the structure.  In both cases, the unit owners sued the condominium council to recover the costs of repair.

Interpreting Section 11-114, the Court of Appeals noted that Section 11-108.1 of the Condominium Act provides that, unless otherwise specified in the declaration or bylaws, “the council of unit owners is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of his unit.”  It ruled that the council’s insurance requirements under Section 11-114 applied “only to damage sustained to the common elements or the structure of the condominium.”  Specifically, it found that, while Section 11-114 provided that each unit owner was an insured person under the council’s policy, each owner is “insured under the master policy only as to his or her collective undivided interest in the entire condominium property,” and it is “not meant to insure each owner’s property or individual unit.”

Accordingly, the Court held that the council of unit owners was not required to repair or replace property of an individual owner after any casualty loss. The significant impact of the decision was that it meant that Section 11-114 applied only to “damaged property owned by the owners collectively,” and the council was not responsible for insuring or repairing any portion of an individual unit, regardless of the origin of the cause of the property damage; that is, regardless of whether the cause originated in the common elements or the unit.  Damage to an individual unit would then become the sole responsibility of that unit owner in all circumstances, and they would be compelled to obtain their own insurance to protect against loss.

This turned what had been customary practice on its head, and prompted the legislature to intervene.  The new law amends Section 108.1 to make it specifically subject to the provisions of Section 11-114.  It then amends Section 11-114 to make clear that the council of unit owners is required to maintain insurance “[f]or property and casualty losses to the common elements and the units, exclusive of improvements and betterments installed in the units by the unit owners other than the developer.” The new law also imposes the deductible requirement on any individual owner in whose unit the damage originates, regardless of whether the bylaws so provide, up to a maximum of $5,000.  Otherwise, the deductible remains a common expense.

The result is that condominium master policies must cover property damage to all of the condominium structure, including both the common elements and units as originally constructed and finished by the developer, with the unit owners providing individual insurance for their improvements and personal contents.  If damage originates in the unit, the owner is responsible for the insurance deductible up to a maximum of $5,000.  The new law also requires that condominium annually notify each unit owner of the deductible responsibility and the amount of the deductible, and further requires that public offering statements notify potential buyers of the unit owner’s responsibility for the insurance deductible.

It should be remembered, however, that, because the council is responsible for maintenance and condition of the common elements, where a common element defect, such as a water leak, is the source of damage to an individual unit and property, the council is responsible for the consequential damages to the unit and its contents.

It is important to first understand the condominium form of ownership.  The purchaser buys a unit that is owned in the same way that an individual home would be owned, but also receives an ownership interest, in common with all other owners, in the common elements of the complex.  Each owner’s property, therefore, includes all of the common elements in addition to their unit.  This means that maintenance and repair issues in the common elements effect the value, maintainability, and useful life of every owner’s property.

Moreover, all owners, by virtue of their membership in the council of unit owners, are responsible for the maintenance, repair, and replacement of all of the common element components.  And any unit owner, because of their ownership rights in the common elements, may compel the association to properly maintain the common elements and correct any defects.

This ownership and related responsibility applies no matter how many buildings might be involved, or how far removed any common element component might be from any given unit.  Indeed, the fact that large buildings or multiple buildings may be involved in a condominium project  means that common element maintenance and repair issues are often much more problematic and considerably more expensive than those that would ever be confronted by an individual homeowner.

Additionally, Maryland law requires that condominium owners, at the time of resale, disclose to prospective purchasers any knowledge of conditions in any part of the condominium that constitute violations of applicable building codes.  Accordingly, defective conditions in the common elements have a direct bearing on the marketability of an individual unit.

As a result of these factors, building problems in condominiums are a matter that can neither be taken lightly nor ignored, because they effect every owner’s interests and can potentially have enormous financial consequences.

To properly protect themselves, condominium owners need to understand the construction of their buildings.  This is necessary even in the absence of specific problems, because condominiums are statutorily required to establish annual budgets for maintenance and replacement reserves.  Initial budgets established by the developer are often kept low in order to allow for lower annual fees that are attractive to purchasers.  The unit owners need to develop their own realistic figures for maintenance and reserves, and must become familiar with their buildings in order to understand the proper maintenance required and the anticipated useful life of the various components.

In doing so, condominium owners also need to become aware of any defective conditions not in compliance with codes, contract documents, and industry standards.  Such issues must be corrected if the condominium council is to meet its responsibilities to the owners, and, if inherent in original construction, may be conditions that the developer is responsible for correcting under warranty and common law obligations.  To preserve and pursue any such claims against the developer, the association must know what defects exist, what constitutes a proper method of repair, and the cost of such repair.

In order to gain the information necessary to intelligently maintain the project, as well as identify conditions for which the developer may be responsible, condominiums must engage appropriate consultants.  A transition study of the property should be undertaken at the time the owners assume responsibility for the complex from the developer.  Such studies establish valid figures for annual maintenance and reserves, and identify conditions that are defective or call for further investigation.

Where problems become apparent, whether by virtue of a transition study or unit owner experience, a forensic engineering investigation should be undertaken so that the true nature of the conditions can be properly identified and an appropriate repair specified.  The resulting engineering report also forms the basis for supporting any claim for damages that might be pursued against the developer.

And it is important to be mindful that time is of the essence with respect to preserving claims against the developer.  Warranties are of limited duration, and common law claims do not accrue upon actual knowledge, but, instead, commence when the property owner, in the exercise of reasonable diligence, should have been on notice of the need to investigate.

Condominium ownership offers many benefits, but being absolutely carefree is not one of them.  Only a diligent and informed unit owner can protect themselves from undue expense and unwanted aggravation.

Several states have established task forces to study mold and its effect on buildings and indoor air quality.  However, the intelligent dialogue required for the development of proper standards for mold exposure and remediation has, in large part, been drowned out by extreme voices.  On the one hand are those who summarily dismiss the issue as the fabricated product of a conspiracy between tort lawyers and a developing cottage industry of mold remediation consultants.  On the other are those readily prepared to broadly attribute a wide variety of medical conditions to the unhealthy environment of “sick buildings.” 

While it is true that mold is an ancient life form that has, throughout history, been the constant companion of humanity, its recent prominence as an indoor health issue is explained by two features of modern building techniques – the use of materials containing high concentrations of cellulose and other fibers upon which molds feed, and the employment of insulating materials and methods that restrict ventilation.  Given the inviting food source provided by present day building material, all that is required for vigorous mold growth and amplification is the presence of water and a building assembly that prevents the moisture from escaping or drying out.

One need not establish any causal connection between the presence of mold and health issues in order to recognize the need for proper mold removal.  Indeed, putting health matters entirely aside, molds deteriorate the building materials on which they feed, necessitating the repair of affected components.  Where structural elements are involved, this can become a matter of building stability as well as function.  Additionally because of the manner in which they digest materials, molds give off undesirable odors and diminish aesthetic appearance, thereby degrading the indoor environment and decreasing property values.

While the precise health consequences of indoor mold exposure remain the subject of study and debate, particularly as to the effect of its production of mycotoxins, it is undisputed that molds are recognized allergens and reproduce by means of airborne spores.  A portion of the population will have some allergic response to certain molds.  This may manifest itself as rhinitis, sinusitis or asthma, and highly sensitive individuals, and those with pre-existing respiratory problems, may develop more serious symptoms.  Additionally, persons with severely compromised immune systems may be a risk for fungal infections form some pathogenic molds.

Buildings do not have mold problems unless they have water problems.  Accordingly, building exterior envelopes and plumbing and mechanical systems need to be designed, constructed and maintained in a manner that protects vulnerable components form moisture.  Moreover, once water intrusion results in mold growth, the water source must be eliminated and methodologies need to be in place for mold removal.

In the absence of statutory regulation, various industry guidelines that have been used to govern the scope of mold remediation projects, including the Environmental Protection Agency’s Guideline on Mold Remediation in Schools and Commercial Buildings.  In general, it is recognized that hard and non-porous surfaces can usually be cleaned, while absorbent or porous materials, such as wallboard, carpet, and ceilings may require replacement.

Historically, insurance claims for mold were permitted under property damage insurance policies where the infestation arose from the intrusion of rain water as a result of storms, or the discharge of water, steam, or condensation from plumbing or mechanical systems.  However, as mold related claims have increased, insurers throughout the country have sought to exclude mold from property damage coverage.  In mid-2003, the Maryland Insurance Commissioner reversed a ruling by his predecessor, and made mold exclusions permissible.  Where mold exclusions are applicable, coverage is only available through the purchase of separate policies or endorsements.

The deterioration of building components, the diminishment of indoor environmental quality and aesthetics, and the potential for allergic reactions and other health consequences provide reason enough to adopt policies that promote the elimination of sources of indoor mold and provide a protocol for the removal of mold growth.

Rather than allow extremists to define the debate, the more reasoned approach is to adopt standards that ensure watertight buildings, identify unacceptable levels of mold contamination, and establish reasonable remediation criteria that allow its removal while minimizing the spread of the airborne spores.  To do otherwise merely perpetuates the current uncertainties and hyperbole, while the costs to property owners continue to accumulate.

Until such standards are in place, property owners need to be mindful of the potential for harm to their investment from water intrusion and mold.  It should be part of any due diligence checklist.  Where problems occur, competent professionals should be engaged to properly identify the source of the moisture and develop specifications for an effective repair, as well as to determine the need for and appropriate scope of any mold remediation program.

Condominiums are, of course, a unique form of real property ownership, in which the purchaser buys a unit that they own in fee simple as they would own an individual home. Additionally, the condominium purchaser also obtains an undivided ownership interest in the common elements of the complex, which they own in common with all of the other unit owners. By virtue of this ownership interest, all unit owners are responsible for the maintenance, upkeep, and, if necessary, repair of the common element components. The extent of their responsibility is established by a percentage share allocated in the condominium documents, which usually is a function of the size of their individual unit. The important fact to remember, however, is that every unit owner has an ownership interest, and corresponding responsibility, for all of the common elements throughout all of the complex, no matter how many buildings might be involved, or how far removed the common elements may be from any individual unit.

For that reason, it is significant that the Maryland Condominium Act establishes a three year common element warranty, which makes the developer responsible for correcting any defect in materials or workmanship in the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems and any other structural elements of the condominium, and must warrant that those components are within acceptable industry standards in effect when the building was constructed. This is in addition to a warranty on components of the individual unit, as well as other statutory warranties that apply to all new housing, including condominiums. The warranty furnishes a means by which condominium unit owners may obtain correction of defective conditions that, because of the components involved and the fact that the conditions may exist throughout a large complex, could otherwise result in costly repairs.

Nevertheless, there are several aspects of the common element warranty that are highly problematic, not the least of which is the fact that the three-year period commences upon the first transfer of title to a unit owner. That means that, for all but the very first purchaser of a unit in a condominium complex, the three year warranty is already running at the time of each purchase, and any unit owner purchasing more than three years after the first purchase in the complex takes an ownership interest in the common elements after the statutory warranty has already expired.

The statute does provide that, for common elements not completed at the time of the first sale of a unit, the warranty does not commence until completion of that element or its availability for use by all of the unit owners. This results in the possibility of several different three year periods being applicable within a given condominium, as well as the likelihood that the warranty may have expired for some common elements while remaining viable as to others.

A further complication arises from the fact that condominiums are governed by a council of unit owners, which is the legal entity comprised of all of the individual unit owners. Until a majority of the units in a condominium complex are sold, the council is under the control of the developer. Only after more than fifty percent of the units have been sold do the unit owners themselves take control of the condominium. Accordingly, because the common element warranty runs to the benefit of the council of unit owners, and not to any individual unit owner, the warranty is running during a substantial period of time when the unit owner purchasers have no ability to require that the council undertake an investigation of the condition of the common elements, let alone enforce the provisions of the statutory warranty.

Additionally, while the statute provides for a one-year period after expiration of the warranty in which a claim can be made, it also requires that notice of any defect be given to the developer within the three-year warranty period. As a result, the unit owners need full knowledge and understanding of the condition of the common elements within the three year warranty in order to be able to provide the required notice that is a prerequisite to pursuing a warranty claim.

For all of these reasons, unit owners need to exercise due diligence if they intend to preserve their rights to enforce the common element warranty. A first order of business before the warranty expires should be for the unit owners to undertake an adequate engineering investigation of the common elements that will identify any conditions that are not within accepted industry standards. Such transition studies are necessary in any event so that the unit owners can establish the proper budgets required by law for maintenance and reserves. When done properly, the investigation may also save the unit owners a huge bill for repairs by alerting them to matters for which the developer should be responsible under the warranty.

It is important to first understand the condominium form of ownership. The purchaser buys a unit that is owned in the same way that an individual home would be owned, but also receives an ownership interest, in common with all other owners, in the common elements of the complex. Each owner’s property, therefore, includes all of the common elements in addition to their unit. This means that maintenance and repair issues in the common elements effect the value, maintainability, and useful life of every owner’s property.

Moreover, all owners, by virtue of their membership in the council of unit owners, are responsible for the maintenance, repair, and replacement of all of the common element components. And any unit owner, because of their ownership rights in the common elements, may compel the association to properly maintain the common elements and correct any defects.

This ownership and related responsibility applies no matter how many buildings might be involved, or how far removed any common element component might be from any given unit. Indeed, the fact that large buildings or multiple buildings may be involved in a condominium project means that common element maintenance and repair issues are often much more problematic and considerably more expensive than those that would ever be confronted by an individual homeowner.

Additionally, Maryland law requires that condominium owners, at the time of resale, disclose to prospective purchasers any knowledge of conditions in any part of the condominium that constitute violations of applicable building codes. Accordingly, defective conditions in the common elements have a direct bearing on the marketability of an individual unit.

As a result of these factors, building problems in condominiums are a matter that can neither be taken lightly nor ignored, because they effect every owner’s interests and can potentially have enormous financial consequences.

To properly protect themselves, condominium owners need to understand the construction of their buildings. This is necessary even in the absence of specific problems, because condominiums are statutorily required to establish annual budgets for maintenance and replacement reserves. Initial budgets established by the developer are often kept low in order to allow for lower annual fees that are attractive to purchasers. The unit owners need to develop their own realistic figures for maintenance and reserves, and must become familiar with their buildings in order to understand the proper maintenance required and the anticipated useful life of the various components.

In doing so, condominium owners also need to become aware of any defective conditions not in compliance with codes, contract documents, and industry standards. Such issues must be corrected if the condominium council is to meet its responsibilities to the owners, and, if inherent in original construction, may be conditions that the developer is responsible for correcting under warranty and common law obligations. To preserve and pursue any such claims against the developer, the association must know what defects exist, what constitutes a proper method of repair, and the cost of such repair.

In order to gain the information necessary to intelligently maintain the project, as well as identify conditions for which the developer may be responsible, condominiums must engage appropriate consultants. A transition study of the property should be undertaken at the time the owners assume responsibility for the complex from the developer. Such studies establish valid figures for annual maintenance and reserves, and identify conditions that are defective or call for further investigation.

Where problems become apparent, whether by virtue of a transition study or unit owner experience, a forensic engineering investigation should be undertaken so that the true nature of the conditions can be properly identified and an appropriate repair specified. The resulting engineering report also forms the basis for supporting any claim for damages that might be pursued against the developer.

And it is important to be mindful that time is of the essence with respect to preserving claims against the developer. Warranties are of limited duration, and common law claims do not accrue upon actual knowledge, but, instead, commence when the property owner, in the exercise of reasonable diligence, should have been on notice of the need to investigate.

Condominium ownership offers many benefits, but being absolutely carefree is not one of them. Only a diligent and informed unit owner can protect themselves from undue expense and unwanted aggravation.

In the years since that first construction defect case, I have litigated, and tried many more equally complex matters, and have resolved still more by other means of dispute resolution. Because condominiums are usually large multi-family housing complexes, they are much more like commercial buildings than they are typical housing, and the impact of design and construction issues are multiplied by the sheer size of the project. As a result, the consequences of failure to act diligently and properly have the potential to be enormous and prohibitively expensive.

This blog is devoted to the things that I have learned from these experiences that can benefit condominium owners, homeowner associations, and property managers in dealing with their ownership and maintenance responsibilities, as well as the means by which developers, designers, builders, and contractors can produce residential projects that do not become a source of liability and unhappy customers. I look forward to our discussions.