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Montgomery County Bills Address HOA, Condo Boards

Posted by IKO Community Management on December 4, 2014 at 8:38 AM

The following article was printed in the Gazette on Wednesday, December 3, 2014. We are republishing it here as we think the information will be useful to our communities. The Montgomery County bills, if voted into law, will affect HOA and Condo boards. Feel free to forward this article to anyone who it may interest.

Training proposed for new board members

By Virginia Terhune Staff Writer

Two pieces of legislation working their way through the County Council likely will affect more than 1,200 registered condominium and homeowners associations in the county if approved next year.

Bill 44-14, sponsored by Democratic at-large members George Leventhal of Takoma Park and Nancy Floreen of Garrett Park, would require the owner of a unit to be within 30 days of paying outstanding condo or HOA fees before renting the unit to a tenant.

Some unit owners, especially since the recession, are not paying their fees to associations, which is affecting budgets and reserve funds, supporters said.

“Given the recent years of ... increased bankruptcies and foreclosures, this new requirement might provide needed assistance to associations where delinquencies have grown,” said John Driscoll, president of the Montgomery Village Foundation board, during an Oct. 21 public hearing on the bills.

Bill 45-15, sponsored by Leventhal at the request of a residents’ group at Leisure World in Silver Spring, would require training for newly elected or appointed common-ownership board members.

Volunteer boards often wield considerable power over budgets and other matters affecting residents, and there have been problems with boards holding closed meetings, failing to provide members with requested information and other issues, according to residents.

The council’s Planning, Housing and Economic Development Committee, which hosted the Oct. 21 hearing on the bills, is expected to schedule work sessions early in 2015 before the bills go to the full County Council for a vote.

Senior legislative aides for Floreen and Leventhal discussed both bills at a meeting of the Upcounty Citizens Advisory Board on Nov. 24 in Germantown.

Landlord bill

Landlords currently are required to obtain a license from the county’s Department of Housing and Community Affairs before they rent a unit to a tenant.

Bill 44-14 would give the HCA director the right to deny, suspend, revoke or refuse to renew the license if fees aren’t paid to a condo or HOA.

“The high rate of delinquencies among our common ownership communities are preventing upkeep and maintenance, limiting our communities’ ability to put money away for a rainy day and preventing many communities from obtaining FHA financing,” said Ilana Branda, policy and neighborhood development manager for the Montgomery Housing Partnership, at the hearing.

The organization, based in Silver Spring, provides affordable housing.

Alyson Meiselman, president of Washingtonian Woods condo association in Gaithersburg, agreed.

“Many absentee owners neither obtain a rental license nor pay their bills,” she said at the hearing. “A penalty that [would not] renew your license ... does not go far enough.”

Meiselman suggested a provision that would allow county courts to enter a foreclosure order against a landlord if the amount owed is more than $5,000 and would require such an order if the amount is more than $10,000.

“That will force the absentee owners to pay their dues,” she said.

But others at the hearing, including Tim Knobloch, treasurer of the Greater Capital Area Association of Realtors, based in Rockville, spoke against the bill.

Knobloch said the paperwork and time required would impose an extra burden on landlords who pay their dues and follow the rules.

He said that getting certification from condo associations and HOAs to show that a landlord’s fees have been paid also could prove expensive.

Training bill

Leventhal’s board training bill would require the county’s Commission on Common Ownership Communities to develop a training program for new board directors of common ownership communities.

As currently drafted, it would require board members to complete the free, two-hour online course within 90 days of their election or appointment.

A number of organizations said at the Oct. 21 hearing that the bill might discourage residents from volunteering to serve on boards because of the time it would take out of busy schedules to complete the training.

Ruth Katz, co-chair of the Washington Metropolitan chapter of the Community Associations Institute, based in Falls Church, Va., suggested including a sunset clause requiring a review after several years to make sure the bill doesn’t have a chilling effect.

But other groups argued that the training is very much needed, especially for large organizations such as Leisure World, which has a $25 million budget.

“Fiduciary responsibility demands representatives have prior knowledge of all legally defining documents before voting to expend residents’ funds,” said Sheryl Katzman, president of Just Us, a resident advocacy group at Leisure World.

Katzman recommended that first-time board member training also include the reading of the Maryland HOA and condominium acts, as well as bylaws, articles of incorporation, master deed, amendments, policies, rules and regulations.

“To have people uninformed or uncooperative on the boards does not make sense to me,” said Janet Schlosser, a Leisure World resident. “If you’re a volunteer [board member], you have a duty to know as much [as possible] about that position.”

The CCOC, part of the county’s Office of Consumer Protection, offers pamphlets, videos and other information for board members posted on its website at montgomerycountymd.gov/ocp/ccoc/ccoc_index.html.

For more information and a video of the hourlong Oct. 21 PHED hearing on the bills, visit montgomerycountymd.gov/council/packet/index.html.

vterhune@gazette.net

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