Relating to Real Estate

The Court of Appeals held that a condominium association may restrict a unit owner from access to a condominium property for failure to be current on assessments, but only if the condominium declaration permits that remedy.  Elvaton Towne Condominium Regime II, Inc. v. Rose, ––– A. 3d –––, No. 33 Sept. Term 2016, 2017 WL 2712887 (Md. June 23, 2017).

After William Rose became delinquent in his condominium assessment to the Elvaton Towne Condominiums in Glen Burnie, the board of the condominium imposed a “suspension-of-privileges” rule that prohibited him from parking his car in the condominium parking lot overnight and from using the condominium pool.  The condominium filed suit in district court to collect the debt, and Rose brought a declaratory action in the Circuit Court for Anne Arundel County.

Under the Maryland Condominium Act, owners of condominium units own their own units, and they also own an undivided percentage interest in the common elements of the condominium.  Condominium regimes are controlled by the declarations that create them, their by-laws, and their rules and regulations – in that order of priority.

The Elvaton Towne Condominiums declaration provided that “the common elements shall be exclusively owned in common by all of the Unit Owners.”  It also provided that the condominium association was entitled to a lien against the unit of an owner who was in arrears in paying assessments.  A lien could be foreclosed in the same manner as a mortgage.

The Court of Appeals held that the “suspension-of-privileges” rule amounts to a taking of Rose’s property and was impermissible.  The Court stated that there was taking even if the deprivation was for a limited period of time.  The Court differentiated a reasonable rule that affects all unit owners equally, such as closing the outdoor swimming pool during the winter season, with a rule that revokes a property right of a unit owner or group of unit owners, without affecting the rights of others.

Furthermore, §11-108(a) of the Real Property Article suggests that the use of common elements of a condominium may only be limited as provided in the declaration.  The association argued unsuccessfully that the “suspension-of-privileges” rule was issued and applied pursuant to broad rights of the association that were set forth in the declaration.  However, the Court held that a rule that takes away rights of a unit owner is only enforceable if it is stated in the declaration itself, rather than promulgated pursuant to alleged authority contained in the declaration.

For questions, please contact Ed Levin (410) 576-1900.