Maryland 2025 Regular Session

Maryland House Bill HB449 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	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	5		hb0449
9	6
10	7		HOUSE BILL 449
11	8		N1 5lr1915
12		-	CF ~~SB 446~~
	9	+	CF 5lr1917
13	10		By: Delegate Holmes
14	11		Introduced and read first time: January 16, 2025
15	12		Assigned to: Environment and Transportation
16		-	Committee Report: Favorable with amendments
17		-	House action: Adopted
18		-	Read second time: February 22, 2025
19	13
20		-	~~CHAPTER ______~~
	14	+	A BILL ENTITLED
21	15
22	16		AN ACT concerning 1
23	17
24	18		Condominiums – Property Insurance Deductibles – Unit Owner Responsibility 2
25	19
26	20		FOR the purpose of increasing the maximum amount of the council of unit owners’ property 3
27	21		insurance deductible for which a unit owner is respons ible under certain 4
28		-	circumstances; providing that a contract for the resale of a condominium unit by a 5
29		-	unit owner other than the developer is not enforceable unless it contains a written 6
30		-	notice of the unit owner’s responsibility for the amount of the deductible where 7
31		-	damage or destruction originates from a unit; and generally relating to condominium 8
32		-	unit owners’ responsibility for the council of unit owners’ insurance deductibles. 9
	22	+	circumstances; and generally relating to condominium unit owners’ responsibility for 5
	23	+	the council of unit owners’ insurance deductibles. 6
33	24
34		-	BY repealing and reenacting, without amendments, 10
35		-	Article – Real Property 11
36		-	Section 11–114(a) and (i) 12
37		-	Annotated Code of Maryland 13
38		-	(2023 Replacement Volume and 2024 Supplement) 14
	25	+	BY repealing and reenacting, without amendments, 7
	26	+	Article – Real Property 8
	27	+	Section 11–114(a) and (i) 9
	28	+	Annotated Code of Maryland 10
	29	+	(2023 Replacement Volume and 2024 Supplement) 11
39	30
40		-	BY repealing and reenacting, with amendments, 15
41		-	Article – Real Property 16
42		-	Section 11–114(g) ~~and 11–135(a)(6) and (b)(5) 17~~
43		-	Annotated Code of Maryland 18
44		-	(2023 Replacement Volume and 2024 Supplement) 19
	31	+	BY repealing and reenacting, with amendments, 12
	32	+	Article – Real Property 13
	33	+	Section 11–114(g) 14
	34	+	Annotated Code of Maryland 15
	35	+	(2023 Replacement Volume and 2024 Supplement) 16
45	36
46		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
47		-	That the Laws of Maryland read as follows: 21
	37	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
	38	+	That the Laws of Maryland read as follows: 18
	39	+
	40	+	Article – Real Property 19
	41	+
	42	+	11–114. 20
	43	+
	44	+	(a) Commencing not later than the time of the first conveyance of a unit to a 21
	45	+	person other than the developer, the council of unit owners shall maintain, to the extent 22
	46	+	reasonably available: 23
48	47		2 HOUSE BILL 449
49	48
50	49
51		-	Article – Real Property 1
	50	+	(1) Property insurance against risks of direct physical loss commonly 1
	51	+	insured against in amounts determined by the council of unit owners, but not less than any 2
	52	+	amounts specified in the declaration or bylaws: 3
52	53
53		-	11–114. 2
	54	+	(i) For attached units, multifamily dwelling units, or detached units 4
	55	+	located within a condominium not composed entirely of similar detached units, on the 5
	56	+	common elements and units, exclusive of improvements and betterments installed in units 6
	57	+	by unit owners other than the developer; and 7
54	58
55		-	(a) Commencing not later than the time of the first conveyance of a unit to a 3
56		-	person other than the developer, the council of unit owners shall maintain, to the extent 4
57		-	reasonably available: 5
	59	+	(ii) For detached units located within a condominium composed 8
	60	+	entirely of similar detached units, on the common elements; and 9
58	61
59		-	(1) Property insurance against risks of direct physical loss commonly 6
60		-	insured against in amounts determined by the council of unit owners, but not less than any 7
61		-	amounts specified in the declaration or bylaws: 8
	62	+	(2) Comprehensive general liability insurance, including medical 10
	63	+	payments insurance, in an amount determined by the council of unit owners, but not less 11
	64	+	than any amount specified in the declaration or bylaws, covering occurrences commonly 12
	65	+	insured against for death, bodily injury, and property damage arising out of or in connection 13
	66	+	with the use, ownership, or maintenance of the common elements. 14
62	67
63		-	(i) ~~For attached units,~~ ~~multifamily dwelling units,~~ ~~or detached units 9~~
64		-	~~located within a condominium not composed entirely~~ of ~~similar detached~~ units, ~~on the 10~~
65		-	~~common elements and units, exclusive of improvements~~ and betterments installed in units 11
66		-	by unit owners ~~other than the developer; and 12~~
	68	+	(g) (1) Subject to the applicable coverage specified under subsection (a)(1) of 15
	69	+	this section, any portion of the common elements and the units, exclusive of improvements 16
	70	+	and betterments installed in the units by unit owners other than the developer, damaged 17
	71	+	or destroyed shall be repaired or replaced promptly by the council of unit owners unless: 18
67	72
68		-	(ii) For detached units located within a condominium composed 13
69		-	entirely of similar detached units, on the common elements; and 14
	73	+	(i) The condominium is terminated; 19
70	74
71		-	(2) Comprehensive general liability insurance, including medical 15
72		-	payments insurance, in an amount determined by the council of unit owners, but not less 16
73		-	than any amount specified in the declaration or bylaws, covering occurrences commonly 17
74		-	insured against for death, bodily injury, and property damage arising out of or in connection 18
75		-	with the use, ownership, or maintenance of the common elements. 19
	75	+	(ii) Repair or replacement would be illegal under any State or local 20
	76	+	health or safety statute or ordinance; or 21
76	77
77		-	(g) (1) Subject to the applicable coverage specified under subsection (a)(1) of 20
78		-	this section, any portion of the common elements and the units, exclusive of improvements 21
79		-	and betterments installed in the units by unit owners other than the developer, damaged 22
80		-	or destroyed shall be repaired or replaced promptly by the council of unit owners unless: 23
	78	+	(iii) 80 percent of the unit owners, including every owner of a unit or 22
	79	+	assigned limited common element which will not be rebuilt, vote not to rebuild. 23
81	80
82		-	(i) The condominium is terminated; 24
	81	+	(2) (i) 1. The cost of repair or replacement in excess of insurance 24
	82	+	proceeds and reserves is a common expense. 25
83	83
84		-	~~(ii)~~ Repair or ~~replacement would be illegal under any State or local 25~~
85		-	~~health or safety statute or ordinance;~~ ~~or 26~~
	84	+	2. A property insurance deductible is not a cost of repair or 26
	85	+	replacement in excess of insurance proceeds. 27
86	86
87		-	(iii) 80 percent of the unit owners, including every owner of a unit or 27
88		-	assigned limited common element which will not be rebuilt, vote not to rebuild. 28
	87	+	(ii) If the cause of any damage to or destruction of any portion of the 28
	88	+	condominium originates from the common elements or an event outside of the condominium 29
	89	+	units and common elements, the council of unit owners’ property insurance deductible is a 30
	90	+	common expense. 31
89	91
90		-	(2) (i) 1. The cost of repair or replacement in excess of insurance 29
91		-	proceeds and reserves is a common expense. 30
92		-
93		-	2. A property insurance deductible is not a cost of repair or 31
94		-	replacement in excess of insurance proceeds. 32
95		-
96		-	(ii) If the cause of any damage to or destruction of any portion of the 33
97		-	condominium originates from the common elements or an event outside of the condominium 34 HOUSE BILL 449 3
	92	+	(iii) 1. If the cause of any damage to or destruction of any portion 32
	93	+	of the condominium originates from a unit, the owner of the unit where the cause of the 33
	94	+	damage or destruction originated is responsible for the council of unit owners’ property 34
	95	+	insurance deductible not to exceed [$10,000] $25,000. 35
	96	+	HOUSE BILL 449 3
98	97
99	98
100		-	~~units and common elements,~~ the council of unit owners~~’ property insurance deductible is a~~ 1
101		-	~~common expense.~~ 2
	99	+	2. The council of unit owners shall inform each unit owner 1
	100	+	annually in writing of: 2
102	101
103		-	(iii) 1. If the cause of any damage to or destruction of any portion 3
104		-	of the condominium originates from a unit, the owner of the unit where the cause of the 4
105		-	damage or destruction originated is responsible for the council of unit owners’ property 5
106		-	insurance deductible not to exceed [$10,000] $25,000. 6
	102	+	A. The unit owner’s responsibility for the council of unit 3
	103	+	owners’ property insurance deductible; and 4
107	104
108		-	2. The council of unit owners shall inform each unit owner 7
109		-	annually in writing of: 8
	105	+	B. The amount of the deductible. 5
110	106
111		-	A. The unit owner’s responsibility for the council of unit 9
112		-	owners’ property insurance deductible; and 10
	107	+	3. The council of unit owners’ property insurance deductible 6
	108	+	amount exceeding the [$10,000] $25,000 responsibility of the unit owner is a common 7
	109	+	expense. 8
113	110
114		-	B. The amount of the deductible. 11
	111	+	(iv) In the same manner as provided under § 11–110 of this title, the 9
	112	+	council of unit owners may make an annual assessment against the unit owner responsible 10
	113	+	under subparagraph (iii) of this paragraph. 11
115	114
116		-	3. The council of unit owners’ property insurance deductible 12
117		-	amount exceeding the [$10,000] $25,000 responsibility of the unit owner is a common 13
118		-	expense. 14
	115	+	(3) If the damaged or destroyed portion of the condominium is not repaired 12
	116	+	or replaced: 13
119	117
120		-	(iv) In the ~~same manner as provided under § 11–110 of this title,~~ the 15
121		-	~~council of unit owners may make an annual assessment against~~ the ~~unit owner responsible 16~~
122		-	~~under subparagraph (iii)~~ of ~~this paragraph.~~ 17
	118	+	(i) The insurance proceeds attributable to the damaged common 14
	119	+	elements shall be used to restore the damaged area to a condition compatible with the 15
	120	+	remainder of the condominium; 16
123	121
124		-	(3) If the damaged or destroyed portion of the condominium is not repaired 18
125		-	or replaced: 19
	122	+	(ii) The insurance proceeds attributable to units and limited 17
	123	+	common elements which are not rebuilt shall be distributed to the owners of those units 18
	124	+	and the owners of the units to which those limited common elements were assigned; and 19
126	125
127		-	(i) The insurance proceeds attributable to the damaged common 20
128		-	elements shall be used to restore the damaged area to a condition compatible with the 21
129		-	remainder of the condominium; 22
	126	+	(iii) The remainder of the proceeds shall be distributed to all the unit 20
	127	+	owners in proportion to their percentage interest in the common elements. 21
130	128
131		-	(ii) The insurance proceeds attributable to units and limited 23
132		-	common elements which are not rebuilt shall be distributed to the owners of those units 24
133		-	and the owners of the units to which those limited common elements were assigned; and 25
	129	+	(4) (i) If the unit owners vote not to rebuild any unit, that unit’s entire 22
	130	+	common element interest, votes in the council of unit owners, and common expense liability 23
	131	+	are automatically reallocated upon the vote as if the unit had been condemned under § 24
	132	+	11–112 of this title, and the council of unit owners promptly shall prepare, execute, and 25
	133	+	record an amendment to the declaration reflecting the reallocations. 26
134	134
135		-	(~~iii~~) The ~~remainder~~ of ~~the proceeds shall be distributed to all the unit 26~~
136		-	~~owners in proportion to their percentage interest in~~ the ~~common elements~~. 27
	135	+	(ii) Notwithstanding the provisions of this subsection, § 11–123 of 27
	136	+	this title governs the distribution of insurance proceeds if the condominium is terminated. 28
137	137
138		-	(4) (i) If the unit owners vote not to rebuild any unit, that unit’s entire 28
139		-	common element interest, votes in the council of unit owners, and common expense liability 29
140		-	are automatically reallocated upon the vote as if the unit had been condemned under § 30
141		-	11–112 of this title, and the council of unit owners promptly shall prepare, execute, and 31
142		-	record an amendment to the declaration reflecting the reallocations. 32
	138	+	(i) The provisions of this section do not apply to a condominium all of whose units 29
	139	+	are intended for nonresidential use. 30
143	140
144		-	(ii) Notwithstanding the provisions of this subsection, § 11–123 of 33
145		-	this title governs the distribution of insurance proceeds if the condominium is terminated. 34
146		-	4 HOUSE BILL 449
147		-
148		-
149		-	(i) The provisions of this section do not apply to a condominium all of whose units 1
150		-	are intended for nonresidential use. 2
151		-
152		-	11–135. 3
153		-
154		-	(a) Except as provided in subsection (b) of this section, a contract for the resale of 4
155		-	a unit by a unit owner other than a developer is not enforceable unless the contract of sale 5
156		-	contains in conspicuous type a notice in the form specified in subsection (g)(1) of this 6
157		-	section, and the unit owner furnishes to the purchaser not later than 15 days prior to 7
158		-	closing: 8
159		-
160		-	(6) A written notice of the unit owner’s responsibility for the council of unit 9
161		-	owners’ property insurance deductible and the amount of the deductible, INCLUDING THE 10
162		-	UNIT OWNER ’S RESPONSIBILITY WHE N DAMAGE OR DESTRUCT ION ORIGINATES 11
163		-	FROM A UNIT. 12
164		-
165		-	(b) A contract for the resale by a unit owner other than a developer of a unit in a 13
166		-	condominium containing less than 7 units is not enforceable unless the contract of sale 14
167		-	contains in conspicuous type a notice in the form specified in subsection (g)(2) of this 15
168		-	section, and the unit owner furnishes to the purchaser not later than 15 days prior to 16
169		-	closing: 17
170		-
171		-	(5) A written notice of the unit owner’s responsibility for the council of unit 18
172		-	owners’ property insurance deductible and the amount of the deductible, INCLUDING THE 19
173		-	UNIT OWNER ’S RESPONSIBILITY WHEN DA MAGE OR DESTRUCTION ORIGINATES 20
174		-	FROM A UNIT. 21
175		-
176		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 22
177		-	October 1, 2025. 23
178		-
179		-
180		-
181		-
182		-	Approved:
183		-	________________________________________________________________________________
184		-	Governor.
185		-	________________________________________________________________________________
186		-	Speaker of the House of Delegates.
187		-	________________________________________________________________________________
188		-	President of the Senate.
	141	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 31
	142	+	October 1, 2025. 32