Maryland 2022 Regular Session

Maryland House Bill HB40 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	LAWRENCE J. HOGAN, JR., Governor Ch. 479
2		-
3		-	– 1 –
4		-	Chapter 479
5		-	(House Bill 40)
6		-
7		-	AN ACT concerning
8		-
9		-	Condominiums – Disclosures to Unit Owners and Prohibited Provisions in
10		-	Instruments
11		-
12		-	FOR the purpose of clarifying that certain provisions of law related to closed–door meetings
13		-	of a board of directors of a condominium do not allow the board to withhold or agree
14		-	to withhold the terms of certain legal agreements from the unit owners; making
15		-	unenforceable a provision of a certain agreement that prohibits the disclosure to unit
16		-	owners or certain purchasers of any term of the agreement making unenforceable a
17		-	certain contract unless the contract contains certain notice; requiring a board to
18		-	make certain disclosures to the council of unit owners prior to signing a certain
19		-	agreement; prohibiting a certain provision from prohibiting certain disclosure by the
20		-	board to the council of unit owners; requiring a unit owner to include certain
21		-	statements under certain circumstances in a certificate and a certain notice prior to
22		-	the resale of a unit; and generally relating to disclosures to unit owners and claims
23		-	against developers in condominiums.
24		-
25		-	BY repealing and reenacting, with amendments,
26		-	Article – Real Property
27		-	Section 11–109.1, 11–126(a), and 11–134.1, and 11–135(a)(4)(ix) and (x) and (g)(1)
28		-	Annotated Code of Maryland
29		-	(2015 Replacement Volume and 2021 Supplement)
30		-
31		-	BY adding to
32		-	Article – Real Property
33		-	Section 11–135(a)(4)(xi)
34		-	Annotated Code of Maryland
35		-	(2015 Replacement Volume and 2021 Supplement)
36		-
37		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
38		-	That the Laws of Maryland read as follows:
39		-
40		-	Article – Real Property
41		-
42		-	11–109.1.
43		-
44		-	(a) A meeting of the board of directors may be held in closed session only for the
45		-	following purposes:
46		-
47		-	(1) Discussion of matters pertaining to employees and personnel;
48		-	Ch. 479 2022 LAWS OF MARYLAND
49		-
50		-	– 2 –
51		-	(2) Protection of the privacy or reputation of individuals in matters not
52		-	related to the council of unit owners’ business;
53		-
54		-	(3) Consultation with legal counsel on legal matters;
55		-
56		-	(4) Consultation with staff personnel, consultants, attorneys, board
57		-	members, or other persons in connection with pending or potential litigation or other legal
58		-	matters;
59		-
60		-	(5) Investigative proceedings concerning possible or actual criminal
61		-	misconduct;
62		-
63		-	(6) Consideration of the terms or conditions of a business transaction in the
64		-	negotiation stage if the disclosure could adversely affect the economic interests of the
65		-	council of unit owners;
66		-
67		-	(7) Complying with a specific constitutional, statutory, or judicially
68		-	imposed requirement protecting particular proceedings or matters from public disclosure;
69		-	or
70		-
71		-	(8) Discussion of individual owner assessment accounts.
72		-
73		-	(b) If a meeting is held in closed session under subsection (a) of this section:
74		-
75		-	(1) An action may not be taken and a matter may not be discussed if it is
76		-	not permitted by subsection (a) of this section; and
77		-
78		-	(2) A statement of the time, place, and purpose of any closed meeting, the
79		-	record of the vote of each board member by which any meeting was closed, and the authority
80		-	under this section for closing any meeting shall be included in the minutes of the next
81		-	meeting of the board of directors.
82		-
83		-	(C) NOTHING IN THIS SECTI ON MAY BE INTERPR ETED TO AUTHORIZE TH E
84		-	BOARD OF DIRECTORS T O WITHHOLD OR AGREE TO WITHHOLD FROM THE UNIT
85		-	OWNERS THE TERMS OF ANY LEGAL AGREEMENT TO WHICH THE COUNCIL OF UNIT
86		-	OWNERS IS A PARTY .
87		-
88		-	11–126.
89		-
90		-	(a) A contract for the initial sale of a unit to a member of the public is not
91		-	enforceable by the vendor unless:
92		-
93		-	(1) The purchaser is given on or before the time a contract is entered into
94		-	between the vendor and the purchaser, a current public offering statement as amended and
95		-	registered with the Secretary of State containing all of the information set forth in
96		-	subsection (b) of this section; and LAWRENCE J. HOGAN, JR., Governor Ch. 479
97		-
98		-	– 3 –
99		-
100		-	(2) The contract of sale contains, in conspicuous type, a notice of:
101		-
102		-	(i) The purchaser’s right to receive a public offering statement and
103		-	his rescission rights under this section; and
104		-
105		-	(ii) 1. The warranties provided by § 11–131 of this title; AND
106		-
107		-	2. WHETHER THE COUNCIL O F UNIT OWNERS HAS
108		-	ENTERED INTO ANY AGR EEMENT THAT SETTLES OR RELEASES THE COUN CIL OF
109		-	UNIT OWNERS ’ CLAIMS RELATED TO CO MMON ELEMENT WARRANT IES UNDER §
110		-	11–131 OF THIS TITLE.
111		-
112		-	11–134.1.
113		-
114		-	(a) In this section, “vendor” has the meaning stated in § 10–201 of this article.
115		-
116		-	(b) This section does not apply to:
117		-
118		-	(1) A unit that is occupied and used solely for nonresidential purposes;
119		-
120		-	(2) An agreement or other instrument entered into by a developer or vendor
121		-	and a council of unit owners for the purpose of settling a disputed claim after the date on
122		-	which the unit owners, other than the developer and its affiliates, first elect a controlling
123		-	majority of the members of the board of directors for the council of unit owners; or
124		-
125		-	(3) An agreement or other instrument entered into by a developer or vendor
126		-	and a unit owner for the purpose of settling a disputed claim after the date the unit is
127		-	conveyed to the purchaser of the unit.
128		-
129		-	(c) (1) Any provision of a declaration, a bylaw, a contract for the initial sale of
130		-	a unit to a member of the public, or any other instrument made by a developer or vendor in
131		-	accordance with this title shall be unenforceable if the provision:
132		-
133		-	(i) Shortens the statute of limitations applicable to any claim;
134		-
135		-	(ii) Waives the application of the discovery rule or other accrual date
136		-	applicable to a claim;
137		-
138		-	(iii) Requires a unit owner or the council of unit owners to assert a
139		-	claim subject to arbitration within a period of time that is shorter than the statute of
140		-	limitations applicable to the claim; or
141		-
142		-	(iv) Operates to prevent a unit owner or the council of unit owners
143		-	from filing a lawsuit, initiating arbitration proceedings for a claim subject to arbitration,
144		-	or otherwise asserting a claim within the statute of limitations applicable to the claim. Ch. 479 2022 LAWS OF MARYLAND
145		-
146		-	– 4 –
147		-
148		-	(2) EXCEPT IN THE CASE OF AN AGREEMENT RELATED TO A
149		-	PERSONNEL MATTER OR AN INDIVIDUAL OWNER ASSESSMENT ACCOUNT , ANY
150		-	PROVISION IN AN AGRE EMENT THAT PROHIBITS DISCLOSURE OF ANY TE RM OF THE
151		-	AGREEMENT TO THE UNI T OWNERS, OR TO A PURCHASER UN DER § 11–135 OF THIS
152		-	TITLE, SHALL BE UNENFORCEAB LE
153		-
154		-	(I) A BOARD OF DIRECTORS S HALL DISCLOSE TO THE COUNCIL
155		-	OF UNIT OWNERS ANY A GREEMENT BY THE BOAR D OF DIRECTORS FOR T HE PURPOSE
156		-	OF SETTLING A DISPUT ED COMMON ELEMENT WA RRANTY CLAIM UNDER § 11–131 OF
157		-	THIS TITLE AT LEAST 21 DAYS BEFORE THE EXEC UTION OF THE AGREEME NT.
158		-
159		-	(II) A NONDISCLOSURE PROVIS ION IN AN AGREEMENT UNDER
160		-	SUBPARAGRAPH (I) OF THIS PARAGRAPH MA Y NOT PROHIBIT DISCL OSURE BY THE
161		-	BOARD OF DIRECTORS T O THE COUNCIL OF U NIT OWNERS.
162		-
163		-	[(2)] (3) Paragraph (1) of this subsection applies only to a provision
164		-	relating to any right of a unit owner or council of unit owners to bring a claim under
165		-	applicable law alleging the failure to comply with:
166		-
167		-	(i) Applicable building codes;
168		-
169		-	(ii) Plans and specifications approved by a county or municipality;
170		-
171		-	(iii) Manufacturer’s installation instructions; or
172		-
173		-	(iv) Warranty provisions under § 10–203 of this article and § 11–131
174		-	of this title.
175		-
176		-	11–135.
177		-
178		-	(a) Except as provided in subsection (b) of this section, a contract for the resale of
179		-	a unit by a unit owner other than a developer is not enforceable unless the contract of sale
180		-	contains in conspicuous type a notice in the form specified in subsection (g)(1) of this
181		-	section, and the unit owner furnishes to the purchaser not later than 15 days prior to
182		-	closing:
183		-
184		-	(4) A certificate containing:
185		-
186		-	(ix) A statement as to whether the council of unit owners has actual
187		-	knowledge of any violation of the health or building codes with respect to the common
188		-	elements of the condominium; [and]
189		-	LAWRENCE J. HOGAN, JR., Governor Ch. 479
190		-
191		-	– 5 –
192		-	(x) A description of any recreational or other facilities which are to
193		-	be used by the unit owners or maintained by them or the council of unit owners, and a
194		-	statement as to whether or not they are to be a part of the common elements; AND
195		-
196		-	(XI) 1. A STATEMENT AS TO WHET HER THE COUNCIL OF U NIT
197		-	OWNERS HAS ENTERED I NTO ANY AGREEMENT TH AT SETTLES OR RELEAS ES THE
198		-	COUNCIL OF UNIT OWNE RS’ CLAIMS RELATED TO CO MMON ELEMENT WARRANT IES
199		-	UNDER § 11–131 OF THIS TITLE; AND
200		-
201		-	2. A STATEMENT AS TO WHET HER THE BOARD OF
202		-	DIRECTORS HAS DISCLO SED TO THE COUNCIL O F UNIT OWNERS IN ACC ORDANCE
203		-	WITH § 11–134.1(C)(2) OF THIS TITLE, THE BOARD’S INTENTION TO ENTER INTO AN
204		-	AGREEMENT FOR THE PU RPOSE OF SETTLING A DISPUTED COMMON ELEMENT
205		-	WARRANTY CLAIM UNDER § 11–131 OF THIS TITLE;
206		-
207		-	(g) (1) A notice given as required by subsection (a) of this section shall be
208		-	sufficient for the purposes of this section if it is in substantially the following form:
209		-
210		-	“NOTICE
211		-
212		-	The seller is required by law to furnish to you not later than 15 days prior to closing
213		-	certain information concerning the condominium which is described in § 11–135 of the
214		-	Maryland Condominium Act. This information must include at least the following:
215		-
216		-	(i) A copy of the declaration (other than the plats);
217		-
218		-	(ii) A copy of the bylaws;
219		-
220		-	(iii) A copy of the rules and regulations of the condominium;
221		-
222		-	(iv) A certificate containing:
223		-
224		-	1. A statement disclosing the effect on the proposed
225		-	conveyance of any right of first refusal or other restraint on the free alienability of the unit,
226		-	other than any restraint created by the unit owner;
227		-
228		-	2. A statement of the amount of the monthly common
229		-	expense assessment and any unpaid common expense or special assessment currently due
230		-	and payable from the selling unit owner;
231		-
232		-	3. A statement of any other fees payable by the unit owners
233		-	to the council of unit owners;
234		-
235		-	4. A statement of any capital expenditures approved by the
236		-	council of unit owners or its authorized designee planned at the time of the conveyance
237		-	which are not reflected in the current operating budget included in the certificate; Ch. 479 2022 LAWS OF MARYLAND
238		-
239		-	– 6 –
240		-
241		-	5. The most recently prepared balance sheet and income and
242		-	expense statement, if any, of the condominium;
243		-
244		-	6. The current operating budget of the condominium,
245		-	including details concerning the amount of the reserve fund for repair and replacement and
246		-	its intended use, or a statement that there is no reserve fund;
247		-
248		-	7. A statement of any judgments against the condominium
249		-	and the existence of any pending suits to which the council of unit owners is a party;
250		-
251		-	8. A statement generally describing any insurance policies
252		-	provided for the benefit of the unit owners, a notice that the policies are available for
253		-	inspection stating the location at which they are available, and a notice that the terms of
254		-	the policy prevail over the general description;
255		-
256		-	9. A statement as to whether the council of unit owners has
257		-	knowledge that any alteration or improvement to the unit or to the limited common
258		-	elements assigned to the unit violates any provision of the declaration, bylaws, or rules or
259		-	regulations;
260		-
261		-	10. A statement as to whether the council of unit owners has
262		-	knowledge of any violation of the health or building codes with respect to the unit, the
263		-	limited common elements assigned to the unit, or any other portion of the condominium;
264		-
265		-	11. A statement of the remaining term of any leasehold estate
266		-	affecting the condominium and the provisions governing any extension or renewal of it;
267		-	[and]
268		-
269		-	12. A description of any recreational or other facilities which
270		-	are to be used by the unit owners or maintained by them or the council of unit owners, and
271		-	a statement as to whether or not they are to be a part of the common elements; and
272		-
273		-	13. A. A STATEMENT AS TO WHET HER THE COUNCIL
274		-	OF UNIT OWNERS HAS E NTERED INTO ANY AGRE EMENT THAT SETTLES O R RELEASES
275		-	THE COUNCIL OF UNIT OWNERS’ CLAIMS RELATED TO CO MMON ELEMENT
276		-	WARRANTIES UNDER § 11–131 OF THIS TITLE; AND
277		-
278		-	B. A STATEMENT AS TO WHETHER THE BOARD OF
279		-	DIRECTORS HAS DISCLO SED TO THE COUNCIL O F UNIT OWNERS IN ACC ORDANCE
280		-	WITH § 11–134.1(C)(2) OF THIS TITLE, THE BOARD’S INTENTION TO ENTER INTO AN
281		-	AGREEMENT FOR THE PU RPOSE OF SETTLING A DISPUTED COMMON ELEM ENT
282		-	WARRANTY CLAIM UNDER § 11–131 OF THIS TITLE; AND
283		-	LAWRENCE J. HOGAN, JR., Governor Ch. 479
284		-
285		-	– 7 –
286		-	(v) A statement by the unit owner as to whether the unit owner has
287		-	knowledge:
288		-
289		-	1. That any alteration to the unit or to the limited common
290		-	elements assigned to the unit violates any provision of the declaration, bylaws, or rules and
291		-	regulations.
292		-
293		-	2. Of any violation of the health or building codes with
294		-	respect to the unit or the limited common elements assigned to the unit.
295		-
296		-	3. That the unit is subject to an extended lease under §
297		-	11–137 of this title or under local law, and if so, a copy of the lease must be provided.
298		-
299		-	You will have the right to cancel this contract without penalty, at any time within 7
300		-	days following delivery to you of all of this information. However, once the sale is closed,
301		-	your right to cancel the contract is terminated.”.
302		-
303		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to
304		-	apply only prospectively and may not be applied or interpreted to have any effect on or
305		-	application to:
306		-
307		-	(1) any provision of a declaration or bylaws of a condominium recorded in
308		-	the land records of the county where the property is located before the effective date of this
309		-	Act; or
310		-
311		-	(2) any other instrument executed before the effective date of this Act.
312		-
313		-	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
314		-	October 1, 2022.
315	1
316	2
317		-	Approved by the Governor, May 16, 2022.
	3	+	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
	4	+	[Brackets] indicate matter deleted from existing law.
	5	+	Underlining indicates amendments to bill.
	6	+	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
	7	+	amendment.
	8	+	hb0040
	9	+
	10	+	HOUSE BILL 40
	11	+	N1 2lr0384
	12	+	HB 30/20 – ENT (PRE–FILED)
	13	+	By: Delegates Watson, Bagnall, and Terrasa Terrasa, Foley, Hartman, Healey,
	14	+	Holmes, Jalisi, Lehman, Lierman, and Prettyman
	15	+	Requested: August 16, 2021
	16	+	Introduced and read first time: January 12, 2022
	17	+	Assigned to: Environment and Transportation
	18	+	Committee Report: Favorable with amendments
	19	+	House action: Adopted
	20	+	Read second time: March 2, 2022
	21	+
	22	+	CHAPTER ______
	23	+
	24	+	AN ACT concerning 1
	25	+
	26	+	Condominiums – Disclosures to Unit Owners and Prohibited Provisions in 2
	27	+	Instruments 3
	28	+
	29	+	FOR the purpose of clarifying that certain provisions of law related to closed–door meetings 4
	30	+	of a board of directors of a condominium do not allow the board to withhold or agree 5
	31	+	to withhold the terms of certain legal agreements from the unit owners; making 6
	32	+	unenforceable a provision of a certain agreement that prohibits the disclosure to unit 7
	33	+	owners or certain purchasers of any term of the agreement making unenforceable a 8
	34	+	certain contract unless the contract contains certain notice; requiring a board to 9
	35	+	make certain disclosures to the council of unit owners prior to signing a certain 10
	36	+	agreement; prohibiting a certain provision from prohibiting certain disclosure by the 11
	37	+	board to the council of unit owners; requiring a unit owner to include certain 12
	38	+	statements under certain circumstances in a certificate and a certain notice prior to 13
	39	+	the resale of a unit; and generally relating to disclosures to unit owners and claims 14
	40	+	against developers in condominiums. 15
	41	+
	42	+	BY repealing and reenacting, with amendments, 16
	43	+	Article – Real Property 17
	44	+	Section 11–109.1, 11–126(a), and 11–134.1, and 11–135(a)(4)(ix) and (x) and (g)(1) 18
	45	+	Annotated Code of Maryland 19
	46	+	(2015 Replacement Volume and 2021 Supplement) 20
	47	+
	48	+	BY adding to 21 2 HOUSE BILL 40
	49	+
	50	+
	51	+	Article – Real Property 1
	52	+	Section 11–135(a)(4)(xi) 2
	53	+	Annotated Code of Maryland 3
	54	+	(2015 Replacement Volume and 2021 Supplement) 4
	55	+
	56	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
	57	+	That the Laws of Maryland read as follows: 6
	58	+
	59	+	Article – Real Property 7
	60	+
	61	+	11–109.1. 8
	62	+
	63	+	(a) A meeting of the board of directors may be held in closed session only for the 9
	64	+	following purposes: 10
	65	+
	66	+	(1) Discussion of matters pertaining to employees and personnel; 11
	67	+
	68	+	(2) Protection of the privacy or reputation of individuals in matters not 12
	69	+	related to the council of unit owners’ business; 13
	70	+
	71	+	(3) Consultation with legal counsel on legal matters; 14
	72	+
	73	+	(4) Consultation with staff personnel, consultants, attorneys, board 15
	74	+	members, or other persons in connection with pending or potential litigation or other legal 16
	75	+	matters; 17
	76	+
	77	+	(5) Investigative proceedings concerning possible or actual criminal 18
	78	+	misconduct; 19
	79	+
	80	+	(6) Consideration of the terms or conditions of a business transaction in the 20
	81	+	negotiation stage if the disclosure could adversely affect the economic interests of the 21
	82	+	council of unit owners; 22
	83	+
	84	+	(7) Complying with a specific constitutional, statutory, or judicially 23
	85	+	imposed requirement protecting particular proceedings or matters from public disclosure; 24
	86	+	or 25
	87	+
	88	+	(8) Discussion of individual owner assessment accounts. 26
	89	+
	90	+	(b) If a meeting is held in closed session under subsection (a) of this section: 27
	91	+
	92	+	(1) An action may not be taken and a matter may not be discussed if it is 28
	93	+	not permitted by subsection (a) of this section; and 29
	94	+
	95	+	(2) A statement of the time, place, and purpose of any closed meeting, the 30
	96	+	record of the vote of each board member by which any meeting was closed, and the authority 31 HOUSE BILL 40 3
	97	+
	98	+
	99	+	under this section for closing any meeting shall be included in the minutes of the next 1
	100	+	meeting of the board of directors. 2
	101	+
	102	+	(C) NOTHING IN THIS SECTI ON MAY BE INTERPRETE D TO AUTHORIZE THE 3
	103	+	BOARD OF DIRECTORS T O WITHHOLD OR AGREE TO WITHHOLD FROM THE UNIT 4
	104	+	OWNERS THE TERMS OF ANY LEGAL AGREEMENT TO WHICH THE COUNCIL OF UNIT 5
	105	+	OWNERS IS A PARTY . 6
	106	+
	107	+	11–126. 7
	108	+
	109	+	(a) A contract for the initial sale of a unit to a member of the public is not 8
	110	+	enforceable by the vendor unless: 9
	111	+
	112	+	(1) The purchaser is given on or before the time a contract is entered into 10
	113	+	between the vendor and the purchaser, a current public offering statement as amended and 11
	114	+	registered with the Secretary of State containing all of the information set forth in 12
	115	+	subsection (b) of this section; and 13
	116	+
	117	+	(2) The contract of sale contains, in conspicuous type, a notice of: 14
	118	+
	119	+	(i) The purchaser’s right to receive a public offering statement and 15
	120	+	his rescission rights under this section; and 16
	121	+
	122	+	(ii) 1. The warranties provided by § 11–131 of this title; AND 17
	123	+
	124	+	2. WHETHER THE COUNCIL O F UNIT OWNERS HAS 18
	125	+	ENTERED INTO ANY AGREEMENT THAT S ETTLES OR RELEASES T HE COUNCIL OF 19
	126	+	UNIT OWNERS ’ CLAIMS RELATED TO CO MMON ELEMENT WARRANT IES UNDER § 20
	127	+	11–131 OF THIS TITLE. 21
	128	+
	129	+	11–134.1. 22
	130	+
	131	+	(a) In this section, “vendor” has the meaning stated in § 10–201 of this article. 23
	132	+
	133	+	(b) This section does not apply to: 24
	134	+
	135	+	(1) A unit that is occupied and used solely for nonresidential purposes; 25
	136	+
	137	+	(2) An agreement or other instrument entered into by a developer or vendor 26
	138	+	and a council of unit owners for the purpose of settling a disputed claim after the date on 27
	139	+	which the unit owners, other than the developer and its affiliates, first elect a controlling 28
	140	+	majority of the members of the board of directors for the council of unit owners; or 29
	141	+
	142	+	(3) An agreement or other instrument entered into by a developer or vendor 30
	143	+	and a unit owner for the purpose of settling a disputed claim after the date the unit is 31
	144	+	conveyed to the purchaser of the unit. 32 4 HOUSE BILL 40
	145	+
	146	+
	147	+
	148	+	(c) (1) Any provision of a declaration, a bylaw, a contract for the initial sale of 1
	149	+	a unit to a member of the public, or any other instrument made by a developer or vendor in 2
	150	+	accordance with this title shall be unenforceable if the provision: 3
	151	+
	152	+	(i) Shortens the statute of limitations applicable to any claim; 4
	153	+
	154	+	(ii) Waives the application of the discovery rule or other accrual date 5
	155	+	applicable to a claim; 6
	156	+
	157	+	(iii) Requires a unit owner or the council of unit owners to assert a 7
	158	+	claim subject to arbitration within a period of time that is shorter than the statute of 8
	159	+	limitations applicable to the claim; or 9
	160	+
	161	+	(iv) Operates to prevent a unit owner or the council of unit owners 10
	162	+	from filing a lawsuit, initiating arbitration proceedings for a claim subject to arbitration, 11
	163	+	or otherwise asserting a claim within the statute of limitations applicable to the claim. 12
	164	+
	165	+	(2) EXCEPT IN THE CASE OF AN AGREEMENT RELATED TO A 13
	166	+	PERSONNEL MATTER OR AN INDIVIDUAL OWNER ASSESSMENT ACCOUNT , ANY 14
	167	+	PROVISION IN AN AGRE EMENT THAT PROHIBITS DISCLOSURE OF ANY TE RM OF THE 15
	168	+	AGREEMENT TO THE UNI T OWNERS, OR TO A PURCHASER UN DER § 11–135 OF THIS 16
	169	+	TITLE, SHALL BE UNENFORCEAB LE 17
	170	+
	171	+	(I) A BOARD OF DIRECTORS S HALL DISCLOSE TO THE COUNCIL 18
	172	+	OF UNIT OWNERS ANY A GREEMENT BY THE BOARD OF DIRECTORS FOR THE PURPOSE 19
	173	+	OF SETTLING A DISPUT ED COMMON ELEMENT WA RRANTY CLAIM UNDER § 11–131 OF 20
	174	+	THIS TITLE AT LEAST 21 DAYS BEFORE THE EXEC UTION OF THE AGREEME NT. 21
	175	+
	176	+	(II) A NONDISCLOSURE PROVIS ION IN AN AGREEMENT UNDER 22
	177	+	SUBPARAGRAP H (I) OF THIS PARAGRAPH MA Y NOT PROHIBIT DISCL OSURE BY THE 23
	178	+	BOARD OF DIRECTORS T O THE COUNCIL OF UNI T OWNERS. 24
	179	+
	180	+	[(2)] (3) Paragraph (1) of this subsection applies only to a provision 25
	181	+	relating to any right of a unit owner or council of unit owners to bring a claim under 26
	182	+	applicable law alleging the failure to comply with: 27
	183	+
	184	+	(i) Applicable building codes; 28
	185	+
	186	+	(ii) Plans and specifications approved by a county or municipality; 29
	187	+
	188	+	(iii) Manufacturer’s installation instructions; or 30
	189	+
	190	+	(iv) Warranty provisions under § 10–203 of this article and § 11–131 31
	191	+	of this title. 32
	192	+	HOUSE BILL 40 5
	193	+
	194	+
	195	+	11–135. 1
	196	+
	197	+	(a) Except as provided in subsection (b) of this section, a contract for the resale of 2
	198	+	a unit by a unit owner other than a developer is not enforceable unless the contract of sale 3
	199	+	contains in conspicuous type a notice in the form specified in subsection (g)(1) of this 4
	200	+	section, and the unit owner furnishes to the purchaser not later than 15 days prior to 5
	201	+	closing: 6
	202	+
	203	+	(4) A certificate containing: 7
	204	+
	205	+	(ix) A statement as to whether the council of unit owners has actual 8
	206	+	knowledge of any violation of the health or building codes with respect to the common 9
	207	+	elements of the condominium; [and] 10
	208	+
	209	+	(x) A description of any recreational or other facilities which are to 11
	210	+	be used by the unit owners or maintained by them or the council of unit owners, and a 12
	211	+	statement as to whether or not they are to be a part of the common elements; AND 13
	212	+
	213	+	(XI) 1. A STATEMENT AS TO WHET HER THE COUNCIL OF U NIT 14
	214	+	OWNERS HAS ENTERED I NTO ANY AGREEMENT TH AT SETTLES OR RELEASES THE 15
	215	+	COUNCIL OF UNIT OWNE RS’ CLAIMS RELATED TO CO MMON ELEMENT WARRANT IES 16
	216	+	UNDER § 11–131 OF THIS TITLE; AND 17
	217	+
	218	+	2. A STATEMENT AS TO WHET HER THE BOARD OF 18
	219	+	DIRECTORS HAS DISCLO SED TO THE COUNCIL O F UNIT OWNERS IN ACC ORDANCE 19
	220	+	WITH § 11–134.1(C)(2) OF THIS TITLE, THE BOARD’S INTENTION TO ENTER INTO AN 20
	221	+	AGREEMENT FOR THE PU RPOSE OF SETTLING A DISPUTED COMMON ELEM ENT 21
	222	+	WARRANTY CLAIM UNDER § 11–131 OF THIS TITLE; 22
	223	+
	224	+	(g) (1) A notice given as required by subsection (a) of this section shall be 23
	225	+	sufficient for the purposes of this section if it is in substantially the following form: 24
	226	+
	227	+	“NOTICE 25
	228	+
	229	+	The seller is required by law to furnish to you not later than 15 days prior to closing 26
	230	+	certain information concerning the condominium which is described in § 11–135 of the 27
	231	+	Maryland Condominium Act. This information must include at least the following: 28
	232	+
	233	+	(i) A copy of the declaration (other than the plats); 29
	234	+
	235	+	(ii) A copy of the bylaws; 30
	236	+
	237	+	(iii) A copy of the rules and regulations of the condominium; 31
	238	+
	239	+	(iv) A certificate containing: 32
	240	+	6 HOUSE BILL 40
	241	+
	242	+
	243	+	1. A statement disclosing the effect on the proposed 1
	244	+	conveyance of any right of first refusal or other restraint on the free alienability of the unit, 2
	245	+	other than any restraint created by the unit owner; 3
	246	+
	247	+	2. A statement of the amount of the monthly common 4
	248	+	expense assessment and any unpaid common expense or special assessment currently due 5
	249	+	and payable from the selling unit owner; 6
	250	+
	251	+	3. A statement of any other fees payable by the unit owners 7
	252	+	to the council of unit owners; 8
	253	+
	254	+	4. A statement of any capital expenditures approved by the 9
	255	+	council of unit owners or its authorized designee planned at the time of the conveyance 10
	256	+	which are not reflected in the current operating budget included in the certificate; 11
	257	+
	258	+	5. The most recently prepared balance sheet and income and 12
	259	+	expense statement, if any, of the condominium; 13
	260	+
	261	+	6. The current operating budget of the condominium, 14
	262	+	including details concerning the amount of the reserve fund for repair and replacement and 15
	263	+	its intended use, or a statement that there is no reserve fund; 16
	264	+
	265	+	7. A statement of any judgments against the condominium 17
	266	+	and the existence of any pending suits to which the council of unit owners is a party; 18
	267	+
	268	+	8. A statement generally describing any insurance policies 19
	269	+	provided for the benefit of the unit owners, a notice that the policies are available for 20
	270	+	inspection stating the location at which they are available, and a notice that the terms of 21
	271	+	the policy prevail over the general description; 22
	272	+
	273	+	9. A statement as to whether the council of unit owners has 23
	274	+	knowledge that any alteration or improvement to the unit or to the limited common 24
	275	+	elements assigned to the unit violates any provision of the declaration, bylaws, or rules or 25
	276	+	regulations; 26
	277	+
	278	+	10. A statement as to whether the council of unit owners has 27
	279	+	knowledge of any violation of the health or building codes with respect to the unit, the 28
	280	+	limited common elements assigned to the unit, or any other portion of the condominium; 29
	281	+
	282	+	11. A statement of the remaining term of any leasehold estate 30
	283	+	affecting the condominium and the provisions governing any extension or renewal of it; 31
	284	+	[and] 32
	285	+
	286	+	12. A description of any recreational or other facilities which 33
	287	+	are to be used by the unit owners or maintained by them or the council of unit owners, and 34
	288	+	a statement as to whether or not they are to be a part of the common elements; and 35
	289	+	HOUSE BILL 40 7
	290	+
	291	+
	292	+	13. A. A STATEMENT AS TO WHET HER THE COUNCIL 1
	293	+	OF UNIT OWNERS HAS E NTERED INTO ANY AGRE EMENT THAT SETTLES O R RELEASES 2
	294	+	THE COUNCIL OF UNIT OWNERS’ CLAIMS RELATED TO CO MMON ELEMENT 3
	295	+	WARRANTIES UNDER § 11–131 OF THIS TITLE; AND 4
	296	+
	297	+	B. A STATEMENT AS TO WHET HER THE BOARD OF 5
	298	+	DIRECTORS HAS DISCLO SED TO THE COUNCIL O F UNIT OWNERS IN ACC ORDANCE 6
	299	+	WITH § 11–134.1(C)(2) OF THIS TITLE, THE BOARD’S INTENTION TO ENTER INTO AN 7
	300	+	AGREEMENT FOR THE PU RPOSE OF SETTLING A DISPUTED COMMON ELEM ENT 8
	301	+	WARRANTY CLAIM UNDER § 11–131 OF THIS TITLE; AND 9
	302	+
	303	+	(v) A statement by the unit owner as to whether the unit owner has 10
	304	+	knowledge: 11
	305	+
	306	+	1. That any alteration to the unit or to the limited common 12
	307	+	elements assigned to the unit violates any provision of the declaration, bylaws, or rules and 13
	308	+	regulations. 14
	309	+
	310	+	2. Of any violation of the health or building codes with 15
	311	+	respect to the unit or the limited common elements assigned to the unit. 16
	312	+
	313	+	3. That the unit is subject to an extended lease under § 17
	314	+	11–137 of this title or under local law, and if so, a copy of the lease must be provided. 18
	315	+
	316	+	You will have the right to cancel this contract without penalty, at any time within 7 19
	317	+	days following delivery to you of all of this information. However, once the sale is closed, 20
	318	+	your right to cancel the contract is terminated.”. 21
	319	+
	320	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 22
	321	+	apply only prospectively and may not be applied or interpreted to have any effect on or 23
	322	+	application to: 24
	323	+
	324	+	(1) any provision of a declaration or bylaws of a condominium recorded in 25
	325	+	the land records of the county where the property is located before the effective date of this 26
	326	+	Act; or 27
	327	+
	328	+	(2) any other instrument executed before the effective date of this Act. 28
	329	+
	330	+	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
	331	+	October 1, 2022. 30
	332	+
	333	+
	334	+