EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0449*
HOUSE BILL 449
N1 5lr1915
CF SB 446
By: Delegate Holmes
Introduced and read first time: January 16, 2025
Assigned to: Environment and Transportation
Committee Report: Favorable with amendments
House action: Adopted
Read second time: February 22, 2025
CHAPTER ______
AN ACT concerning 1
Condominiums – Property Insurance Deductibles – Unit Owner Responsibility 2
FOR the purpose of increasing the maximum amount of the council of unit owners’ property 3
insurance deductible for which a unit owner is responsible under certain 4
circumstances; providing that a contract for the resale of a condominium unit by a 5
unit owner other than the developer is not enforceable unless it contains a written 6
notice of the unit owner’s responsibility for the amount of the deductible where 7
damage or destruction originates from a unit; and generally relating to condominium 8
unit owners’ responsibility for the council of unit owners’ insurance deductibles. 9
BY repealing and reenacting, without amendments, 10
Article – Real Property 11
Section 11–114(a) and (i) 12
Annotated Code of Maryland 13
(2023 Replacement Volume and 2024 Supplement) 14
BY repealing and reenacting, with amendments, 15
Article – Real Property 16
Section 11–114(g) and 11–135(a)(6) and (b)(5) 17
Annotated Code of Maryland 18
(2023 Replacement Volume and 2024 Supplement) 19
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
That the Laws of Maryland read as follows: 21
2 HOUSE BILL 449
Article – Real Property 1
11–114. 2
(a) Commencing not later than the time of the first conveyance of a unit to a 3
person other than the developer, the council of unit owners shall maintain, to the extent 4
reasonably available: 5
(1) Property insurance against risks of direct physical loss commonly 6
insured against in amounts determined by the council of unit owners, but not less than any 7
amounts specified in the declaration or bylaws: 8
(i) For attached units, multifamily dwelling units, or detached units 9
located within a condominium not composed entirely of similar detached units, on the 10
common elements and units, exclusive of improvements and betterments installed in units 11
by unit owners other than the developer; and 12
(ii) For detached units located within a condominium composed 13
entirely of similar detached units, on the common elements; and 14
(2) Comprehensive general liability insurance, including medical 15
payments insurance, in an amount determined by the council of unit owners, but not less 16
than any amount specified in the declaration or bylaws, covering occurrences commonly 17
insured against for death, bodily injury, and property damage arising out of or in connection 18
with the use, ownership, or maintenance of the common elements. 19
(g) (1) Subject to the applicable coverage specified under subsection (a)(1) of 20
this section, any portion of the common elements and the units, exclusive of improvements 21
and betterments installed in the units by unit owners other than the developer, damaged 22
or destroyed shall be repaired or replaced promptly by the council of unit owners unless: 23
(i) The condominium is terminated; 24
(ii) Repair or replacement would be illegal under any State or local 25
health or safety statute or ordinance; or 26
(iii) 80 percent of the unit owners, including every owner of a unit or 27
assigned limited common element which will not be rebuilt, vote not to rebuild. 28
(2) (i) 1. The cost of repair or replacement in excess of insurance 29
proceeds and reserves is a common expense. 30
2. A property insurance deductible is not a cost of repair or 31
replacement in excess of insurance proceeds. 32
(ii) If the cause of any damage to or destruction of any portion of the 33
condominium originates from the common elements or an event outside of the condominium 34 HOUSE BILL 449 3
units and common elements, the council of unit owners’ property insurance deductible is a 1
common expense. 2
(iii) 1. If the cause of any damage to or destruction of any portion 3
of the condominium originates from a unit, the owner of the unit where the cause of the 4
damage or destruction originated is responsible for the council of unit owners’ property 5
insurance deductible not to exceed [$10,000] $25,000. 6
2. The council of unit owners shall inform each unit owner 7
annually in writing of: 8
A. The unit owner’s responsibility for the council of unit 9
owners’ property insurance deductible; and 10
B. The amount of the deductible. 11
3. The council of unit owners’ property insurance deductible 12
amount exceeding the [$10,000] $25,000 responsibility of the unit owner is a common 13
expense. 14
(iv) In the same manner as provided under § 11–110 of this title, the 15
council of unit owners may make an annual assessment against the unit owner responsible 16
under subparagraph (iii) of this paragraph. 17
(3) If the damaged or destroyed portion of the condominium is not repaired 18
or replaced: 19
(i) The insurance proceeds attributable to the damaged common 20
elements shall be used to restore the damaged area to a condition compatible with the 21
remainder of the condominium; 22
(ii) The insurance proceeds attributable to units and limited 23
common elements which are not rebuilt shall be distributed to the owners of those units 24
and the owners of the units to which those limited common elements were assigned; and 25
(iii) The remainder of the proceeds shall be distributed to all the unit 26
owners in proportion to their percentage interest in the common elements. 27
(4) (i) If the unit owners vote not to rebuild any unit, that unit’s entire 28
common element interest, votes in the council of unit owners, and common expense liability 29
are automatically reallocated upon the vote as if the unit had been condemned under § 30
11–112 of this title, and the council of unit owners promptly shall prepare, execute, and 31
record an amendment to the declaration reflecting the reallocations. 32
(ii) Notwithstanding the provisions of this subsection, § 11–123 of 33
this title governs the distribution of insurance proceeds if the condominium is terminated. 34
4 HOUSE BILL 449
(i) The provisions of this section do not apply to a condominium all of whose units 1
are intended for nonresidential use. 2
11–135. 3
(a) Except as provided in subsection (b) of this section, a contract for the resale of 4
a unit by a unit owner other than a developer is not enforceable unless the contract of sale 5
contains in conspicuous type a notice in the form specified in subsection (g)(1) of this 6
section, and the unit owner furnishes to the purchaser not later than 15 days prior to 7
closing: 8
(6) A written notice of the unit owner’s responsibility for the council of unit 9
owners’ property insurance deductible and the amount of the deductible, INCLUDING THE 10
UNIT OWNER ’S RESPONSIBILITY WHE N DAMAGE OR DESTRUCT ION ORIGINATES 11
FROM A UNIT. 12
(b) A contract for the resale by a unit owner other than a developer of a unit in a 13
condominium containing less than 7 units is not enforceable unless the contract of sale 14
contains in conspicuous type a notice in the form specified in subsection (g)(2) of this 15
section, and the unit owner furnishes to the purchaser not later than 15 days prior to 16
closing: 17
(5) A written notice of the unit owner’s responsibility for the council of unit 18
owners’ property insurance deductible and the amount of the deductible, INCLUDING THE 19
UNIT OWNER ’S RESPONSIBILITY WHEN DA MAGE OR DESTRUCTION ORIGINATES 20
FROM A UNIT. 21
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 22
October 1, 2025. 23
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.