From the Maryland Homeowners' Association comes some good news. I testified before the Judicial Proceedings Committee of the Maryland State Senate in support of the attorney fee limitations and it is refreshing to see a legislature taking a serious interest in protecting home owners.
BILL TO LIMIT ATTORNEY FEES AND FORECLOSURES in Maryland BECOMES LAW on October 1, 2013
A new bill limiting foreclosures and attorney fees passed the Senate 46-0 (SB 161) and the House 134-4 (HB 286) and has been signed by the Governor. The law will be effective October 1, 2013.
Basically, HB 286 and SB 161 are identical consumer protection bills whose purpose is to:
1. Stop the financial abuse of Maryland HOA and condo owners when attorneys advise boards to run up legal fees over trivial matters and then pass those fees onto targeted HOA and condo owners.
2. Prohibit foreclosure on any property based merely on fines and/or legal fees.
The new law is a partial response to recent association scandals, such as a Maryland condominium association that ran up attorney fees of $200,000 to fight a condo owner's lawsuit involving $225 or the homeowner who was asked to pay $50,000 in attorney fees and fines for not getting proper approval for a new driveway that others in the community already had in place.
MHA thanks and applauds Senator Anthony Muse, district 26, Prince Georges County for his work in chairing the Conference Committee and for co-sponsoring SB 161 and Senator Delores Kelley, District 10, Baltimore County, for sponsoring SB 161.
According to this new law, only "reasonable costs and attorney's fees directly related to the filing of the lien and not exceeding the amount of the delinquent assessments may be the subject of a lien.” For example, if $1000 of assessments is owed, the lien can only ask for $1000 in reasonable legal fees. Other HOA/Condo stipulations of collecting money owed would still be available to a governing body.
MHA’s thanks also go to Delegates Doyle L. Niemann, District 47, Prince Georges County; Pamela Beidle, District 32, Anne Arundel County; Cheryl D. Glenn, District 45 and Stephen W. Lafferty, District 42, Baltimore County, for sponsoring HB 286.