The Court of Appeals issued its final ruling in the Elvaton Towne Condominium Regime II, Inc., v. Rose No. 33 September Term, 2016 (hereinafter “Elvaton”). For historical background, a Condominium and its management company were held liable by the trial court for violating various State and Federal collection laws by revoking an owner’s privileges to use the common element parking lot and pool as a result of nonpayment of assessments. The Court of Appeals, the highest court in our State, issued its binding and reported opinion in this matter dated June 23, 2017, which affirms the liability imposed by the trial court and essentially holds that if a Condominium in Maryland wishes to revoke privileges, such as, but not limited to, parking or pool rights, the authority to do so MUST BE IN ITS DECLARATION.
The revocation of such rights based on authority found in a Condominium’s Bylaws or Rules is now illegal, unenforceable, and will create liability for the Condominium. As such, if your Condominium wishes to revoke any privileges such as parking, or the right to use the pool or any other amenity, for non-payment of assessments, the authority for such revocation is now required to be in the Declaration. If not, you must amend your Declaration to provide for such right, which requires the consent of 80% of the unit owners eligible to vote pursuant to Section 11-103 of the Maryland Condominium Act. Revoking privileges due to non-payment of assessments without said authority in the Declaration will now create clear liability for your Condominium as well as your management company. (Please note that it is my opinion that this ruling does not affect the ability of a Condominium to revoke the right of a delinquent Unit Owner to vote assuming the authority is set forth in your Condominium’s Bylaws as that right is expressly permitted by Section 11-104 of the Condominium Act.)
As always, should you have any questions about this or any other issue concerning your community, please do not hesitate to contact me.