2022 Maryland Legislative Update

“Of those bills, there are a handful that affect community associations that passed and will go into effect starting October 1, 2022.”

The 2022 legislative session was a busy one with the introduction of over 2,000 bills. Of those bills, there are a handful that affect community associations that passed and will go into effect starting October 1, 2022. The first of these bills is HB 107, which expands reserve study requirements statewide. Montgomery and Prince George’s Counties already had this requirement, but now all community associations in Maryland will be required to obtain reserve studies at least once every five years and budget for and fund their annual reserves in accordance with the recommendations in the reserve study. Any community association that has not obtained a replacement reserve study since October 1, 2018 will be required to do so by October 1, 2023, and then must have sufficient funds to meet the funding level recommendation in the study by the third annual budget cycle following receipt of the reserve study. The Board of Directors has the power to increase assessments in order to achieve the recommended funding level regardless of any restrictions or assessment caps in the association’s governing documents. The law also requires that any professional who prepares reserve studies must be licensed as an architect or engineer or otherwise certified by CAI or the Association of Professional Reserve Analysts and must have prepared at least thirty studies in the preceding three-year period.

The second of these bills is HB 615, which modifies Section 11-113 of the Maryland Condominium Act’s enforcement procedures for violations of the association’s governing documents. It also creates a new Section 11B-110.10 of the Maryland Homeowners Association Act, which now imposes enforcement procedures for homeowners associations starting October 1, 2022. The new law requires condominium and homeowners associations to provide notice of violation to an alleged violator, give the violator 15 days to abate the violation (increased from 10 days previously applicable only to condominiums) and the right to request a hearing before the Board of Directors within 10 days. In addition, the Board’s decision regarding the violation must be included in the Board’s meeting minutes.

The next bill is HB 40, which requires a condominium Board of Directors to disclose to its unit owners, at least 21 days prior to execution, the terms of any settlement agreement between the condominium association and the condominium developer in settlement of common element warranty claims. The bill also clarifies that Section 11-109.1 of the Maryland Condominium Act, which authorizes a Board of Directors to hold certain meetings in closed session, does not permit the Board to withhold the terms of a legal agreement that the association has entered into.

HB 157 and SB 146 prohibit a person from standing, stopping or parking a vehicle in a parking space that contains electric vehicle charging equipment if the vehicle is not actively plugged into the equipment.

HB 853 and SB 512 establish that non-stock corporations must file only the seven most recent annual reports when filing articles of revival and past-due annual reports.

The legislature also passed SB 528 (the Climate Solutions Now Act), which went into effect on June 1, 2022. This legislation is designed to reduce Statewide greenhouse emissions 60% by 2031. Among other things, it requires certain commercial and multi-family residential buildings to reduce greenhouse emissions 20% by the year 2030 and to achieve net-zero emissions by 2040. The Maryland Department of Environment (“MDE”) has been directed to develop energy performance standards and regulations by June 1, 2023, which will require the owners of these buildings to phase out the use of energy sources, such as

propane, heating oil and natural gas by 2040. Such building owners will also be required to measure and report to the MDE data about their greenhouse gas emissions on an annual basis starting in 2025. The MDE is required to include in its standards and regulations an alternate method of compliance by the payment of fees for failure to meet emissions reduction targets.

“A couple of bills that affect community associations that did not pass are HB26, which sought to create the State Board of Common Ownership Community Managers in the Maryland Department of Labor.”

A couple of bills that affect community associations that did not pass are HB26, which sought to create the State Board of Common Ownership Community Managers in the Maryland Department of Labor. This bill would have required manager licensing by the Board in order to provide management services to a community association. The bill also sought to impose a per unit/lot fee on all community associations in the state in order to fund the operations of the Board. The other bill that did not pass was HB 140, which would have increased the number of annual membership meetings from one to two, and would have required a condominium developer to appoint a unit owner Board of Directors within 30 days of conveyance of units representing 25% of the votes in the association to members of the public.

Written by Judyann Lee, Esq., McMillan Metro, PC jlee@mcmillanmetro.com

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