EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
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SENATE BILL 463
N1 5lr0907
CF 5lr2588
By: Senator King
Introduced and read first time: January 21, 2025
Assigned to: Judicial Proceedings
A BILL ENTITLED
AN ACT concerning 1
Real Property – Condominiums – Responsibility for Property Insurance 2
Deductibles 3
FOR the purpose of increasing the maximum amount of the council of unit owners’ property 4
insurance deductible for which a unit owner is respons ible under certain 5
circumstances; and generally relating to the responsibility for property insurance 6
deductibles in condominiums. 7
BY repealing and reenacting, with amendments, 8
Article – Real Property 9
Section 11–114(g) 10
Annotated Code of Maryland 11
(2023 Replacement Volume and 2024 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – Real Property 15
11–114. 16
(g) (1) Subject to the applicable coverage specified under subsection (a)(1) of 17
this section, any portion of the common elements and the units, exclusive of improvements 18
and betterments installed in the units by unit owners other than the developer, damaged 19
or destroyed shall be repaired or replaced promptly by the council of unit owners unless: 20
(i) The condominium is terminated; 21
(ii) Repair or replacement would be illegal under any State or local 22
health or safety statute or ordinance; or 23
2 SENATE BILL 463
(iii) 80 percent of the unit owners, including every owner of a unit or 1
assigned limited common element which will not be rebuilt, vote not to rebuild. 2
(2) (i) 1. The cost of repair or replacement in excess of insurance 3
proceeds and reserves is a common expense. 4
2. A property insurance deductible is not a cost of repair or 5
replacement in excess of insurance proceeds. 6
(ii) If the cause of any damage to or destruction of any portion of the 7
condominium originates from the common elements or an event outside of the condominium 8
units and common elements, the council of unit owners’ property insurance deductible is a 9
common expense. 10
(iii) 1. If the cause of any damage to or destruction of any portion 11
of the condominium originates from a unit, the owner of the unit where the cause of the 12
damage or destruction originated is responsible for the council of unit owners’ property 13
insurance deductible not to exceed [$10,000] $20,000. 14
2. The council of unit owners shall inform each unit owner 15
annually in writing of: 16
A. The unit owner’s responsibility for the council of unit 17
owners’ property insurance deductible; and 18
B. The amount of the deductible. 19
3. The council of unit owners’ property insurance deductible 20
amount exceeding the [$10,000] $20,000 responsibility of the unit owner is a common 21
expense. 22
(iv) In the same manner as provided under § 11–110 of this title, the 23
council of unit owners may make an annual assessment against the unit owner responsible 24
under subparagraph (iii) of this paragraph. 25
(3) If the damaged or destroyed portion of the condominium is not repaired 26
or replaced: 27
(i) The insurance proceeds attributable to the damaged common 28
elements shall be used to restore the damaged area to a condition compatible with the 29
remainder of the condominium; 30
(ii) The insurance proceeds attributable to units and limited 31
common elements which are not rebuilt shall be distributed to the owners of those units 32
and the owners of the units to which those limited common elements were assigned; and 33
SENATE BILL 463 3
(iii) The remainder of the proceeds shall be distributed to all the unit 1
owners in proportion to their percentage interest in the common elements. 2
(4) (i) If the unit owners vote not to rebuild any unit, that unit’s entire 3
common element interest, votes in the council of unit owners, and common expense liability 4
are automatically reallocated upon the vote as if the unit had been condemned under § 5
11–112 of this title, and the council of unit owners promptly shall prepare, execute, and 6
record an amendment to the declaration reflecting the reallocations. 7
(ii) Notwithstanding the provisions of this subsection, § 11–123 of 8
this title governs the distribution of insurance proceeds if the condominium is terminated. 9
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 10
policies of property and casualty insurance issued, delivered, or renewed in the State to a 11
condominium council of unit owners as required under § 11–114 of the Real Property Article 12
on or after October 1, 2025. 13
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
October 1, 2025. 15