Chapter 10B. Common Ownership Communities.

ensure proper establishment and operation of homeowners' associations, condominium associations, and cooperative housing corporations;

promote education, public awareness and association membership understanding of the rights and obligations of living in a common ownership community;

reduce the number and divisiveness of disputes, and encourage informal resolution of disputes;

maintain property values and quality of life in these communities;

assist and oversee in the development of coordinated community and government policies, programs, and services which support these communities; and

prevent potential public financial liability for repair or replacement of common ownership community facilities.

a residential development subject to a declaration enforced by a homeowners’ association, as those terms are used in state law;

a residential condominium, as that term is used in state law; and

a cooperative housing project, as that term is used in state law.

The County Executive must appoint, subject to confirmation by the Council, a Commission on Common Ownership Communities. The Commission consists of 15 voting members.

Designees of the County Council (if the Council selects a designee), Planning Board, Department of Environmental Protection, Department of Permitting Services, Department of Transportation, and Department of Housing and Community Affairs are ex-officio nonvoting members of the Commission.

Each voting member serves a 3-year term. Of the members first appointed, one-third must be appointed for 1-year terms, one-third must be appointed for 2-year terms, and one-third must be appointed for 3-year terms. A member must not serve more than 2 consecutive full terms. A member appointed to fill a vacancy serves the rest of the unexpired term. Members continue in office until their successors are appointed and qualified.

Prior to participation in any Commission matter, each voting member must complete:

The County Executive, with the consent of the Council, may remove a voting member of the Commission for neglect of or inability to perform the duties of the office, misconduct in office, or serious violation of law. Before the Executive removes a member, the Executive must give the member notice of the reason for removal and a fair opportunity to reply.

Section 2-148(b) applies only to voting members of the Commission.

The Commission must elect one voting member as Chair and another as Vice Chair, to serve at the pleasure of the Commission, and may elect other officers as it determines.

Voting members of the Commission receive no compensation for their services.

The Commission meets at the call of the Chair as often as required to perform its duties, but at least once each month. A majority of the voting members are a quorum for the transaction of business, and a majority of the quorum present at any meeting may take any official action.

The Office must provide the Commission with staff, offices and supplies as are appropriated for it.

The Commission must submit an annual report by September 1 to the County Executive and the County Council summarizing its activities, needs, and recommendations, and the extent to which the goals of this Chapter are being met.

research, assemble, analyze and disseminate pertinent data and educational materials about activities and programs which assist common ownership communities; plan and conduct educational and other programs, meetings and conferences to promote the operation of common ownership communities;

maintain a master roster of homeowners' associations, condominiums, and cooperatives, their leadership, and their professional management companies if applicable;

develop and maintain an information and referral system for all services in the County related directly to common ownership communities, and recommend other services when needed;

maintain a collection of common ownership community association documents for use as a model and for reference;

provide technical assistance to association governing bodies on matters such as transition, elections, rules adoption and enforcement, selection of association managers, storm water management and other services;

develop and maintain a manual for the mutual benefit of common ownership communities and government agencies;

develop and maintain an operations manual which will serve as a guide on operations to common ownership community leadership;

advise common ownership communities and professional association managers of changes in the laws and regulations that affect their communities or operations;

operate a dispute resolution process to furnish mediation and administrative hearings; and

assist the Commission in carrying out its duties and in implementing Commission decisions under Article 2.

adopt rules and procedures as necessary to carry out the purposes of this Chapter;

keep a record of its activities and minutes of all meetings, which must be kept on file and open to the public at reasonable business hours upon request;

cooperate with the County Executive and all government agencies concerned with matters within the jurisdiction of the Commission;

examine by means of public or private meetings, conferences, and public hearings, conditions in common ownership communities which may result in unmet community, resident, or public needs;

advise the citizens of the County, the County Council, and the County Executive, and County, state, and federal agencies on matters involving common ownership communities, and recommend such programs, procedures, or legislation as it finds necessary;

provide training on the responsibilities of a board member for members of the governing body of a common ownership community by:

establish hearing panels to adjudicate cases on which the Commission accepts jurisdiction.

Association registration.

The County Executive by regulation adopted under method (2) may establish reasonable fees in amounts sufficient to fund the provision of dispute resolution and technical assistance by the Commission and the Department. These fees may include:

Training.

A hearing panel or a hearing examiner may consider a board member’s failure to complete the training required under this Section, if relevant, in deciding a dispute under Section 10B-13.

Association document means:

Common element includes:

Community association means the legal entity, incorporated or unincorporated, that is responsible for the governance or common property of a common ownership community.

Dispute means any disagreement between 2 or more parties that involves:

Dispute does not include any disagreement that only involves:

Governing body of a community association means the council of unit owners, board of directors, or any other body authorized by an association document to adopt binding rules or regulations.

Owner includes:

Party includes:

Unit or lot includes:

The Commission may hear any dispute between or among parties.

A party must not file a dispute with the Commission until the party makes a good faith attempt to exhaust all procedures or remedies provided in the association documents.

However, a party may file a dispute with the Commission 60 days after any procedure or remedy provided in the association documents has been initiated before the association.

After a community association finds that a dispute exists, the association must notify the other parties of their rights to file the dispute with the Commission. The association must not take any action to enforce or implement its decision for 14 days after it notifies the other parties of their rights.

Except as provided in Section 10B-9A, when a dispute is filed with the Commission, a community association must not take any action to enforce or implement the association's decision, other than filing a civil action under subsection (f), until the process under this Article is completed.

Any party may file a civil action arising out of an association document or a law regulating the association's powers and procedures at any time. The court may stay all proceedings for at least 90 days after the court is notified that a dispute has been properly filed under this Article so that a hearing under Section 10B-13 may be completed. Whether or not a stay is issued, the court may hear the action de novo only if a hearing panel assigned to the dispute has not issued a decision under Section 10B-13(e).

At any time after a dispute is filed under Section 10B-9, a party to the dispute may submit a request to lift the automatic stay required under Section 10B-9(e) to a hearing panel appointed under Section 10B-12, or if no hearing panel has been appointed, a special standing panel authorized to consider requests for relief from stays.

The special panel must consist of three voting members of the Commission designated by the chair, and must include at least one representative of each membership category.

A party that requests relief from a stay must serve a copy of its request on any other party named in the dispute by certified mail or personal service. A certificate of service must accompany any request submitted under this Section. A party served with a copy of the request must file its opposition, if any, within 10 days after receiving service.

If a request for relief from a stay which states facts sufficient to show a need for immediate action is not granted or denied within 20 days after the request was filed, the request must be treated as granted.

Except as provided in subsection (d), a request for relief from stay may only be granted if the assigned panel finds that:

If the Commission does not accept jurisdiction of a complaint, the Director must notify the parties in writing of the decision and the reason for the Commission’s denial of jurisdiction within 10 business days after the decision.

The Commission’s decision not to accept jurisdiction of a complaint is not subject to judicial review.

The Commission may:

If any person does not comply with any summons issued under this Article to compel the attendance of persons or the production of documents, records or other evidence in any matter to which this Article applies, the County Attorney, on behalf of the Commission, may enforce the summons in a court with jurisdiction. Failure to comply with a Commission summons is also a class A violation.

Any court with jurisdiction may, on request of the Commission, in accordance with state law and the Maryland Rules of Procedure:

A court may punish any disobedience of any order entered under this Section as a contempt of court.

The Director may investigate facts and assemble documents relevant to a dispute filed with the Commission, and may summarize the issues in the dispute. The Director may notify a party if, in the Director’s opinion, a dispute was not properly filed with the Commission, and may inform each party of the possible sanctions under Section 10B-13(d).

If the Director, after reviewing a dispute, finds that, assuming all facts alleged by the party that filed the dispute are true, there are no reasonable grounds to conclude that a violation of applicable law or any association document has occurred, the Director must so inform the Commission. The Commission must dismiss a dispute if it finds that there are no reasonable grounds to conclude that a violation of applicable law or any association document has occurred, or it may order the Director to investigate further. The Commission may reconsider the dismissal of a dispute under this subsection if any party, in a motion to reconsider filed within 30 days after the dispute is dismissed, shows that:

If the Director, after reviewing a dispute and any investigation, finds reasonable grounds to conclude that a violation of applicable law or an association document has occurred, the Director must attempt to resolve the matter through informal negotiation including, in the Director's discretion, mediation. Each party named in the dispute or its representative must attend any mediation conference scheduled by the Director under this Section unless excused by the Director. If the party that files the dispute refuses or fails to participate in the mediation, the Director must dismiss the dispute. If the party that is the subject of the dispute refuses or fails to participate in the mediation, the Director must refer the dispute to the Commission for resolution. The party that is the subject of the dispute may not appear at the hearing, and the hearing panel may award relief to any party that the facts on the record warrant.

Unless otherwise agreed to by the parties in writing, a mediation conference is informal and nothing said or done during a mediation conference is admissible in any subsequent hearing under this article.

The Commission must promptly schedule a hearing under Section 10B-13 if either: (1) mediation has not occurred within 90 days after the Director found reasonable grounds to believe a violation occurred; or (2) the Director decides at any time that mediation would be fruitless. The Director may extend the mediation deadline by mutual consent of the parties.

If a dispute is resolved by mediation, the terms of mediation agreed to by the parties must be reduced to writing and incorporated into a consent agreement to be signed by the parties. The agreement must be for mediation purposes only and is not an admission by any party that a violation of applicable law or an association document has occurred.

In addition to any other penalty allowed by law, failure to adhere to any provision of a consent agreement is a class A violation. Any failure by the Director to enforce any provision of a consent agreement does not waive any private right of action against the violating party.

If a hearing is scheduled, the Chair of the Commission must convene a 3-member panel to hear the dispute.

The Chair must choose two members of the panel from the voting members of the Commission. The persons selected must represent the two different membership groups of the Commission. The Chair of the Commission must designate the third member from a list of volunteer arbitrators trained or experienced in common ownership community issues maintained by the Commission. The third member must Chair the panel. If a suitable arbitrator is not available, the Chair of the Commission must designate the third panelist from among the voting members of the Commission, and must designate the Chair of the panel.

Each panelist must not have any interest in the dispute to be heard.

Each volunteer arbitrator must not represent any parties in disputes before other hearing panels convened under this Chapter.

If the Commission Chair decides that a hearing should be held by a hearing examiner instead of a hearing panel, the Chair, with the approval of the Commission, may designate the Office of Zoning and Administrative Hearings to conduct the hearing.

A hearing panel appointed under Section 10B-12 must hold a hearing on each dispute that is not resolved by mediation under Section 10B-11 unless the Commission finds that:

The Administrative Procedures Act (Article I of Chapter 2A) applies to a hearing held under this Section. However, the parties need not be given more than 15 days’ notice before the hearing is held, if the Commission finds that an expedited hearing is necessary. At any hearing, a party or a witness may be advised by counsel.

If any party, after proper notice, does not appear at the scheduled hearing, the hearing panel may order any relief to another party that the facts on record warrant.

The hearing panel may award costs, including reasonable attorney's fees, to any party if the other party:

The hearing panel must apply State and County laws and all relevant caselaw to the facts of the dispute, and may order the payment of damages and any other relief that the law and the facts warrant. The decision of the hearing panel is binding on the parties, subject to judicial review under Section 2A-11.

If the hearing has been held under Section 10B-12(d) by the Office of Zoning and Administrative Hearings, the hearing examiner must forward a recommended decision and order to a Commission panel. The Commission panel may adopt, reverse, modify, or remand the recommended decision before issuing its final order as provided in this Section.

An appeal of a decision under this Section must be consolidated with any case filed under Section 10B-9(f) that arises out of the same facts.

The court hearing an appeal must sustain the decision of the hearing panel unless the decision is:

The Commission, acting through the Department and the County Attorney, may enforce a decision of the hearing panel by taking any appropriate legal action.

In addition to any other penalty allowed by law, any person who does not comply with a final Commission order issued under this Chapter has committed a class A civil violation. Each day that a person does not comply with a Commission order is a separate offense.

Settlement of a dispute by mediation agreed to by the parties is binding, has the force and effect of a contract, and may be enforced accordingly.

The Director may inform any party who has settled a dispute by mediation, or any party who prevails in a hearing held under Section 10B-13, about how the agreement or decision can be enforced.

Election dates and procedures. Not less than 10 nor more than 90 days before an election for the governing body of an association, the governing body must notify all members of the association of election procedures and the date of the election. An initial election for the governing body must be held not later than 60 days after the date that 50 percent of the units have been conveyed by the developer to the initial purchasers.

Election materials. All election materials prepared with funds of the association:

Absentee ballots or directed proxies. Any unsigned absentee ballot or directed proxy, to be valid, must be:

Proxy or power of attorney. Any proxy or power of attorney valid under state law may be used at any association meeting. However, any proxy or power of attorney containing votes for candidates for a governing body’s election may be counted only to meet a quorum or to vote on matters other than an election for a governing body unless the proxy or power of attorney contains a directed vote on the election. If a proxy or power of attorney form must be approved before it is cast, the approving authority must not unreasonably withhold its consent. A general power of attorney valid under state law may be used for any purpose at an association meeting that is consistent with the provisions of the general power of attorney, including for an election of the governing body.

Cumulative voting prohibited. In an election for a governing body, for each unit that a member owns the member must not cast more than one vote for each candidate.

Counting votes. Until the time for voting closes, an association must not open or count election ballots, absentee ballots or directed proxies, and must keep all such documents in a sealed container which must not be opened or counted until the election. If an election is conducted electronically, the votes must not be disclosed or counted by anyone until the election. The individuals counting absentee ballots or directed proxies must ensure that the individual who has been directed to cast the proxy vote was in fact in attendance at the meeting.

Terms of office. Unless the association documents provide for other terms of office:

the governing body must provide members of the association with the proposed budget of the association at least 30 days before the governing body votes on the budget; and

the governing body must provide members of the association with any proposed amendment to the budget at least 30 days before the governing body votes on the amendment, if the amendment will result in an increase or decrease of more than 15 percent of the approved budget. This requirement does not apply to expenditures made to respond to an imminent threat to health or safety or of serious property damage, or to properly fund the most recent reserve study conducted for the association.

The Department may enforce this Article by appropriate legal action.

In addition to any action by the Department and any other action authorized by law, including the filing of a dispute under Article 2, any person may file an action: