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§ 11-135. Resale contract requirements

West's Annotated Code of MarylandReal PropertyEffective: October 1, 2016

West's Annotated Code of Maryland
Real Property (Refs & Annos)
Title 11. Maryland Condominium Act (Refs & Annos)
Effective: October 1, 2016
MD Code, Real Property, § 11-135
§ 11-135. Resale contract requirements
In general
(a) Except as provided in subsection (b) of this section, a contract for the resale of a unit by a unit owner other than a developer is not enforceable unless the contract of sale contains in conspicuous type a notice in the form specified in subsection (g)(1) of this section, and the unit owner furnishes to the purchaser not later than 15 days prior to closing:
(1) A copy of the declaration (other than the plats);
(2) The bylaws;
(3) The rules or regulations of the condominium;
(4) A certificate containing:
(i) A statement disclosing the effect on the proposed conveyance of any right of first refusal or other restraint on the free alienability of the unit other than any restraint created by the unit owner;
(ii) A statement setting forth the amount of the common expense assessment and any unpaid common expense or special assessment adopted by the council of unit owners that is due and payable from the selling unit owner;
(iii) A statement of any other fees payable by the unit owners to the council of unit owners;
(iv) A statement of any capital expenditures approved by the council of unit owners planned at the time of the conveyance which are not reflected in the current operating budget disclosed under item (vi) of this item;
(v) The most recent regularly prepared balance sheet and income expense statement, if any, of the condominium;
(vi) The current operating budget of the condominium including the current reserve study report or a summary of the report, a statement of the status and amount of any reserve or replacement fund, or a statement that there is no reserve fund;
(vii) A statement of any unsatisfied judgments or pending lawsuits to which the council of unit owners is a party, excluding assessment collection suits;
(viii) A statement generally describing any insurance policies provided for the benefit of unit owners, a notice that copies of the policies are available for inspection, stating the location at which the copies are available, and a notice that the terms of the policy prevail over the description;
(ix) A statement as to whether the council of unit owners has actual knowledge of any violation of the health or building codes with respect to the common elements of the condominium; and
(x) A description of any recreational or other facilities which are to be used by the unit owners or maintained by them or the council of unit owners, and a statement as to whether or not they are to be a part of the common elements;
(5) A statement by the unit owner as to whether the unit owner has knowledge:
(i) That any alteration to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, bylaws, or rules and regulations;
(ii) Of any violation of the health or building codes with respect to the unit or the limited common elements assigned to the unit; and
(iii) That the unit is subject to an extended lease under § 11-137 of this title or under local law, and if so, a copy of the lease must be provided; and
(6) A written notice of the unit owner's responsibility for the council of unit owners' property insurance deductible and the amount of the deductible.
Notice requirements of contract
(b) A contract for the resale by a unit owner other than a developer of a unit in a condominium containing less than 7 units is not enforceable unless the contract of sale contains in conspicuous type a notice in the form specified in subsection (g)(2) of this section, and the unit owner furnishes to the purchaser not later than 15 days prior to closing:
(1) A copy of the declaration (other than the plats);
(2) The bylaws;
(3) The rules and regulations of the condominium;
(4) A statement by the unit owner of the unit owner's expenses during the preceding 12 months relating to the common elements; and
(5) A written notice of the unit owner's responsibility for the council of unit owners' property insurance deductible and the amount of the deductible.
Disclosure requirements
(c)(1) Except as provided in paragraph (4) of this subsection, the council of unit owners, within 20 days after a written request by a unit owner and receipt of a reasonable fee therefor, not to exceed the cost to the council of unit owners, if any, up to a maximum of $250, shall furnish a certificate containing the information necessary to enable the unit owner to comply with subsection (a) of this section. A unit owner providing a certificate under subsection (a) of this section is not liable to the purchaser for any erroneous information provided by the council of unit owners and included in the certificate.
(2) In addition to the fee under paragraph (1) of this subsection, the council of unit owners is entitled to a reasonable fee not to exceed $100 for an inspection of the unit owner's unit, if required.
(3) In addition to the fees under paragraphs (1) and (2) of this subsection, the council of unit owners is entitled to a reasonable fee:
(i) Not to exceed $50 for delivery of the certificate within 14 days after the request for the certificate; and
(ii) Not to exceed $100 for delivery of the certificate within 7 days after the request for the certificate.
(4)(i) The Department of Housing and Community Development shall adjust the maximum fee authorized under paragraph (1) of this subsection every 2 years, beginning October 1, 2018, to reflect any aggregate increase in the Consumer Price Index for All Urban Consumers (CPI-U) for Washington-Baltimore, or any successor index, for the previous 2 years.
(ii) The Department of Housing and Community Development shall maintain on its Web site a list of the maximum fees authorized under paragraph (1) of this subsection as adjusted every 2 years in accordance with subparagraph (i) of this paragraph.
(5) With respect to the remaining information that the unit owner is required to disclose under subsection (a) of this section that is not provided by the council of unit owners and included in the certificate, a unit owner:
(i) Except as provided in item (ii) of this paragraph, is liable to the purchaser under this section for damages proximately caused by:
1. An untrue statement about a material fact; and
2. An omission of a material fact that is necessary to make the statements made not misleading, in light of the circumstances under which the statements were made; and
(ii) Is not liable to the purchaser under this section if the owner had, after reasonable investigation, reasonable grounds to believe, and did believe, at the time the information was provided to the purchaser, that the statements were true and that there was no omission to state a material fact necessary to make the statements made not misleading, in light of the circumstances under which the statements were made.
Liability of purchaser for unpaid assessments or fees
(d) A purchaser is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the council of unit owners. A unit owner is not liable to a purchaser for the failure or delay of the council of unit owners to provide the certificate in a timely manner.
Waiver of rights of purchaser
(e) The rights of a purchaser under this section may not be waived in the contract of sale, and any attempted waiver is void. However, if a purchaser proceeds to closing, his right to rescind the contract under subsection (f) of this section is terminated.
Rescission of sale
(f)(1) Any purchaser may at any time within 7 days following receipt of all of the information required under subsection (a) or (b) of this section, whichever is applicable, rescind in writing the contract of sale without stating any reason and without any liability on his part.
(2) The purchaser, upon rescission, is entitled to the return of any deposits made on account of the contract.
(3) If any deposits are held in trust by a licensed real estate broker, the return of the deposits to a purchaser under this subsection shall comply with the procedures set forth in § 17-505 of the Business Occupations and Professions Article.
Form of notice
(g)(1) A notice given as required by subsection (a) of this section shall be sufficient for the purposes of this section if it is in substantially the following form:
“NOTICE
The seller is required by law to furnish to you not later than 15 days prior to closing certain information concerning the condominium which is described in § 11-135 of the Maryland Condominium Act. This information must include at least the following:
(i) A copy of the declaration (other than the plats);
(ii) A copy of the bylaws;
(iii) A copy of the rules and regulations of the condominium;
(iv) A certificate containing:
1. A statement disclosing the effect on the proposed conveyance of any right of first refusal or other restraint on the free alienability of the unit, other than any restraint created by the unit owner;
2. A statement of the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner;
3. A statement of any other fees payable by the unit owners to the council of unit owners;
4. A statement of any capital expenditures approved by the council of unit owners or its authorized designee planned at the time of the conveyance which are not reflected in the current operating budget included in the certificate;
5. The most recently prepared balance sheet and income and expense statement, if any, of the condominium;
6. The current operating budget of the condominium, including details concerning the amount of the reserve fund for repair and replacement and its intended use, or a statement that there is no reserve fund;
7. A statement of any judgments against the condominium and the existence of any pending suits to which the council of unit owners is a party;
8. A statement generally describing any insurance policies provided for the benefit of the unit owners, a notice that the policies are available for inspection stating the location at which they are available, and a notice that the terms of the policy prevail over the general description;
9. A statement as to whether the council of unit owners has knowledge that any alteration or improvement to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, bylaws, or rules or regulations;
10. A statement as to whether the council of unit owners has knowledge of any violation of the health or building codes with respect to the unit, the limited common elements assigned to the unit, or any other portion of the condominium;
11. A statement of the remaining term of any leasehold estate affecting the condominium and the provisions governing any extension or renewal of it; and
12. A description of any recreational or other facilities which are to be used by the unit owners or maintained by them or the council of unit owners, and a statement as to whether or not they are to be a part of the common elements; and
(v) A statement by the unit owner as to whether the unit owner has knowledge:
1. That any alteration to the unit or to the limited common elements assigned to the unit violates any provision of the declaration, bylaws, or rules and regulations.
2. Of any violation of the health or building codes with respect to the unit or the limited common elements assigned to the unit.
3. That the unit is subject to an extended lease under § 11-137 of this title or under local law, and if so, a copy of the lease must be provided.
You will have the right to cancel this contract without penalty, at any time within 7 days following delivery to you of all of this information. However, once the sale is closed, your right to cancel the contract is terminated.”.
(2) A notice given as required by subsection (b) of this section shall be sufficient for the purposes of this section if it is in substantially the following form:
“NOTICE
The seller is required by law to furnish to you not later than 15 days prior to closing certain information concerning the condominium which is described in § 11-135 of the Maryland Condominium Act. This information must include at least the following:
(1) A copy of the declaration (other than the plats);
(2) A copy of the bylaws;
(3) A copy of the rules and regulations of the condominium; and
(4) A statement by the seller of his expenses relating to the common elements during the preceding 12 months.
You will have the right to cancel this contract without penalty, at any time within 7 days following delivery to you of all of this information. However, once the sale is closed, your right to cancel the contract is terminated.”.
Name and forwarding address of prior unit owners
(h) Upon any sale of a condominium unit, the purchaser or his agent shall provide to the council of unit owners to the extent available, the name and forwarding address of the prior unit owner, the name and address of the purchaser, the name and address of any mortgagee, the date of settlement, and the proportionate amounts of any outstanding condominium fees or assessments assumed by each of the parties to the transaction.
Units used for nonresidential purposes
(i) This section does not apply to the sale of any unit which is to be used and occupied for nonresidential purposes.
Foreclosure of mortgages or deeds of trust
(j) Subsections (a), (b), (c), (d), (e), (f), and (g) of this section do not apply to a sale of a unit in an action to foreclose a mortgage or deed of trust.

Credits

Added by Acts 1981, c. 246, § 1, eff. July 1, 1981. Amended by Acts 1982, c. 836, § 3; Acts 1986, c. 358; Acts 1986, c. 360; Acts 1989, c. 5, § 1; Acts 1989, c. 692; Acts 1998, c. 21, § 1, eff. April 14, 1998; Acts 2009, c. 522, § 1, eff. June 1, 2009; Acts 2009, c. 523, § 1, eff. June 1, 2009; Acts 2011, c. 156, § 1, eff. Oct. 1, 2011; Acts 2013, c. 43, § 5; Acts 2016, c. 8, § 1, eff. March 14, 2016; Acts 2016, c. 735, § 1, eff. Oct. 1, 2016.

Editors' Notes

HISTORICAL AND STATUTORY NOTES
2009 Legislation
Acts 2009, c. 522, § 2, and Acts 2009, c. 523, § 2, provide:
“SECTION 2. AND BE IT FURTHER ENACTED, That it is the intent of the General Assembly that this Act:
“(a) Overturn the Court of Appeals ruling in Diane Anderson, et al. v. Council of Unit Owners of The Gables on Tuckerman Condominium, et al., 404 Md. 560 (2008);
“(b) Place an affirmative duty on the council of unit owners of a condominium association to:
“(1) Repair damage or destruction to the condominium that originated in a unit; and
“(2) Purchase property insurance that reflects this duty; and
“(c) Make the cost of the property insurance purchased by the council of unit owners of a condominium association under this Act a common expense, except that in the case of damage or destruction originating from a unit, the payment of the property insurance deductible shall be the responsibility, up to the maximum amount provided under § 11-114(g) of the Real Property Article, of the owner of the unit where the cause of the damage or destruction originated.”
MD Code, Real Property, § 11-135, MD REAL PROP § 11-135
Current through all legislation from the 2017 Regular Session of the General Assembly
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