CHARM Newsletter * January 8, 2025
There’s hope for beleaguered HOA homeowners. Delegate Ryan Spiegel (Dist. 17, Gaithersburg - Rockville) has drafted a bill, MC 11-25 “Montgomery County – Common Ownership Communities – Disputes, Payments, and Elections,” that would address many grievances of homeowners who live in HOAs, condo associations, or cooperatives specifically in Montgomery County, Maryland today.
Del. Spiegel hopes to win the support of the Montgomery County Delegation (state legislators from the county) and introduce the bill in January, 2025 in Annapolis. (Maryland’s legislative session runs from January 8 to April 7, 2025).
On December 16, 2024, Del. Spiegel and five homeowners spoke in favor of the bill at a Zoom hearing. You can read their testimonies here, and watch a video of their presentations here. (Fast forward to 03:12:05 and watch the subsequent 26 minutes.) Here are some excerpts from the presentations, followed by some highlights of the bill.
Del. Ryan Spiegel’s Testimony (excerpt)
"There are a lot of COCs [Common Ownership Communities] that work well, follow the rules, and treat their members fairly. And it’s reasonable for COCs to be able to impose certain sensible regulations and processes on their residents, in order to ensure the quality of the community. But there are some COCs that pose too great a risk of exposing their unit owners to abuse, unfair policies, and even retribution for simply exercising reasonable rights or speaking out against problems. There are plenty of horror stories about what happens when a small group or even a single person wields unchecked power over huge financial penalties, and other major negative impacts on a person’s use of their own home, without sufficient accountability. And I think you might hear some of those stories from some of the witnesses tonight–on behalf of whom I bring this bill. … "
Gaithersburg City Councilmember Neil Harris's Testimony (excerpt) "Of the five current members of our council, 4 of us had previously served as leaders of our respective homeowners associations. I am proud of the work we all did to ensure the proper governance and fiscal soundness on behalf of our neighbors. However, this is not the case for all HOAs and Condominium associations. Residents and owners have brought before us any number of troubling matters. Some of these are unfair but relatively minor, but there are others that could cause very significant hardships. ..."
Homeowner Testimonies (excerpts)
“MC 11-25 will allow Montgomery County to set requirements for essential functions such as: record keeping and disclosure of information; payment of dues and fees; conducting fair and open elections; improving dispute resolution procedures and practices, and protecting homeowners from abusive actions against them. … MC 11-25 is a critical first step in making governing bodies more accountable and transparent, and for making these [HOA] communities an affordable, good, and safe place to live. As a strong supporter of the bill, I hope you will vote in favor of it.”
– Ana Sol Gutierrez, Retired, MD State Legislator, D-18; condominium homeowner
“We have a dysfunctional system, and a commission that may be suffering from ‘regulatory capture’. … Homeowners would like county agencies to rapidly enforce the law when there is evidence of HOA abuse. We do not, however, want any new law to diminish the current powers of state agencies (such as the Maryland Attorney General). Individual homeowners need county and state governments to fully protect our civil rights, our HOA-membership privileges, and our housing and financial security.
… I encourage this legislative delegation to fully support bill MC 11-25 as a first step to address some of these problems.”
– Steven Sellers Lapham, HOA homeowner
"[H]ere in Maryland, we can lead the nation by adopting laws that balance that power differential, and making sure we have the means to enforce those laws – something that has been sorely missing. We need you to fix unfair board elections. In cases I’ve witnessed, open ballots are received and counted by the management company -- which by its very nature is biased in favor of the current board members who awarded their lucrative contract. The ballots are counted offsite so residents can’t verify the results. This almost guarantees that whoever the board wants to win, will win. ..." – Carol Kaplan, condominium homeowner
“[B]ased on personal experiences and observation in my community, there has been a level of disregard for upholding our policies and Bylaws. This has led to numerous acts of abuse of authority. There have been continual, reckless actions by the Board of Directors, which continued to happen due to the lack of laws and oversight. For the past 10 years, I and other homeowners have been extremely active in our community attempting to hold the Board accountable by bringing violations of our Bylaws to the Board’s and [Commission on Common Ownership Communities’] attention. Out of fear of retaliation by the Board and/or the management company, the complaints were filed by myself and another homeowner. An important area of concern is our elections. I’ve witnessed several elections that have been improperly conducted. Several CCOC complaints have been filed regarding this. Some incidents range from being advised to use paper towels as ballots, to the Board lowering the number of Board members so as not to let certain owners on the Board.”
– Sheila Snell, condominium homeowner
“I have seen how an HOA can be run properly and effectively but I believe I have also experienced and seen evidence of homeowners being bullied, threatened, and controlled by Boards because of accountability tools that are too far out of reach. The disproportionate power and control Boards have over residents can restrict many Homeowners of their property rights. Too often, Boards can easily abuse their power, which is facilitated by the Management Company and protected by the Association law firm. This bill will help to curb that abuse. … I encourage the state legislative delegation to fully support bill MC 11-25 as a first step to addressing these problems and others.” – Deborah Wenzel, condominium homeowner
Highlights of Bill MC 11-25 (based on Preamble, 11/20/24)
For the purpose of:
* Getting better payment records
* New requirements for accepting payments
* Removing stumbling blocks to payment processes
* Ethics requirements for elections
* New procedural requirements and prohibitions for disputes
* Accommodating members who organize democratically
Main Highlights
1. The association will provide a meeting agenda upon request.
2. Election ballot collection, counting, and certifying will be conducted by independent parties.
3. All unit owners will have equal payment portal access at all times (no more shut-offs to force delinquents to other payment methods).
4. During disputes, boards will not reassign or accelerate payments.
5. No more payment of attorney fees in so-called "voluntary" payment agreements unless awarded by a court or CCOC.
6. Boards and managers will no longer judge their own behavior in disputes against themselves.
Additional Highlights
7. Organizing activities by individuals will be accommodated.
8. No more fines, fees, or penalties from when the board causes delay.
9. You can get an annual itemized payment history and explanation of how your payments were applied.
10. Montgomery County unit owners will not recover attorney's fees until all appeals are exhausted. (Not ideal for homeowners, but considered fair.)
11. During disputes, boards will not charge fees, fines, or interest on disputed actions.
12. Triple damages awarded to unit owners for willful and intentional violations of law and governing documents by board members.
Empowers entity authorized by county (CCOC) to "grant injunctive relief against the governing body and its agents."
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