Several changes in Maryland laws regarding the governance of community associations are effective October 1, 2009:
Fidelity Insurance. All Maryland condominiums, cooperatives, and homeowner associations must have fidelity insurance to protect the association against fraud or theft of funds by association officers, directors and managers. Theft of funds is typically not covered by directors and officers insurance or general liability insurance.
Closed Board Meetings. Condominium and homeowner association boards of directors no longer may hold closed meetings based on a reason it believes is "so compelling as to override the general public policy in favor of public meetings". That catch-all provision is eliminated from the Maryland Condominium Act and Maryland Homeowners Association Act. However, those laws were amended to include new provisions to specifically allow meetings to be closed for discussion of all legal matters and individual owner assessment accounts.
Books and Records. Association meeting minutes and financial statements prepared within the past 3 years must be provided to a homeowner within 21 days of an owner's written request. These records must be provided by mail, electronic transmission, or personal delivery. As in the past, other records must be available for inspection and copying during normal business hours on reasonable notice.
Developer to Homeowner Control. Developers must comply with new procedures for transition of control of a condominium or homeowner association. This includes a meeting for the election of the board of directors and providing the financial records, contracts, owner records and other documents to the owner-controlled board.
Condominium Insurance. Changes in the Condominium Act regarding payment of the insurance deductible were effective June 1, 2009. A unit owner is now responsible for payment of up to $5,000.00 of the insurance deductible under the condominium master insurance policy when the cause of the damage originates in the owner's unit. A condominium board of directors must provide notice annually to all owners regarding an owner's responsibility for the property insurance deductible up to $5,000.00 and the amount of the deductible. A similar notice must be included in resale certificates issued by the condominium.
