House of Delegates and State Senate Introduce Legislation to Render Certain Provisions in Condominium Documents Unenforceable With Respect to Litigating and Arbitrating Defect Claims
February 21, 2014
In the middle of January, 2014, the Maryland House of Delegates and the State Senate cross-filed bills that would nullify certain provisions in condominium declarations, bylaws and contracts of sale that would otherwise limit condominium council’s or unit owners’ defect claims. If passed, the bills – HB 1141 and SB 207 – would modify the Maryland Condominium Act by adding a new section which would provide, in part:
“Any provision of a declaration, a bylaw, a contract for the initial sale of a unit to a member of the public, or any other instrument made by a developer or vendor in accordance with this title shall be unenforceable if the provision:
(i) purports to shorten the statute of limitations applicable to any claim;
(ii) purports to waive the application of the “discovery rule” or other accrual date applicable to a claim;
(iii) requires a unit owner or the council of unit owners to assert a claim subject to arbitration within a period of time that is shorter than the statute of limitations applicable to the claim; or
(iv) operates to prevent a unit owner or the council of unit owners from filing a lawsuit, initiating arbitration proceedings, or otherwise asserting a claim within the statute of limitations applicable to the claim.”
The purpose of this legislation is to preclude developers and vendors of condominiums from limiting their liability by shortening the time frame in which unit owners and condominium councils must file litigation or arbitration to allege violations of applicable building codes, county-approved plans and specifications, manufacturer’s installation instructions, or other applicable construction industry standards.
It is important to point out that the proposed legislation only applies to residential condominiums, and not to non-residential condominiums.
As of the date of this writing, SB 207 had made its way through the State Senate without any revisions and passed by a margin of 36-11. On February 20, 2014, the bill was referred to the Environmental Matters Committee of the House of Delegates.
For a copy of SB 207, click here.