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§ 11-114.1. Purchase of fidelity insurance by condominium governing body

West's Annotated Code of MarylandReal PropertyEffective: October 1, 2010

West's Annotated Code of Maryland
Real Property (Refs & Annos)
Title 11. Maryland Condominium Act (Refs & Annos)
Effective: October 1, 2010
MD Code, Real Property, § 11-114.1
§ 11-114.1. Purchase of fidelity insurance by condominium governing body
Fidelity insurance defined
(a) In this section, “fidelity insurance” includes a fidelity bond.
Application of section
(b) This section does not apply to a condominium:
(1) That has four or fewer units; and
(2) For which 3 months' worth of gross annual assessments is less than $2,500.
Purchase of fidelity insurance required
(c)(1) The council of unit owners or other governing body of a condominium shall purchase fidelity insurance not later than the time of the first conveyance of a unit to a person other than the developer and shall keep fidelity insurance in place for each year thereafter.
(2) The fidelity insurance required under paragraph (1) of this subsection shall provide for the indemnification of the condominium against loss resulting from acts or omissions arising from fraud, dishonesty, or criminal acts by:
(i) Any officer, director, managing agent, or other agent or employee charged with the operation or maintenance of the condominium who controls or disburses funds; and
(ii) Any management company employing a management agent or other employee charged with the operation or maintenance of the condominium who controls or disburses funds.
Copy of policy or bond included in books and records
(d) A copy of the fidelity insurance policy or fidelity bond shall be included in the books and records kept and made available by the council of unit owners under § 11-116 of this title.
Amount of fidelity insurance
(e)(1) The amount of the fidelity insurance required under subsection (c) of this section shall equal at least the lesser of:
(i) 3 months' worth of gross annual assessments and the total amount held in all investment accounts at the time the fidelity insurance is issued; or
(ii) $3,000,000.
(2) The total liability of the insurance to all insured persons under the fidelity insurance may not exceed the sum of the fidelity insurance.
Failure of council to comply with section
(f) If a unit owner believes that the council of unit owners or other governing body of a condominium has failed to comply with the requirements of this section, the aggrieved unit owner may submit the dispute to the Division of Consumer Protection of the Office of the Attorney General under § 11-130 of this title.

Credits

Added by Acts 2009, c. 77, § 1, eff. Oct. 1, 2009; Acts 2009, c. 78, § 1, eff. Oct. 1, 2009. Amended by Acts 2010, c. 615, § 1, eff. Oct. 1, 2010; Acts 2010, c. 616, § 1, eff. Oct. 1, 2010.
MD Code, Real Property, § 11-114.1, MD REAL PROP § 11-114.1
Current through all legislation from the 2017 Regular Session of the General Assembly
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