HB 248
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 248 (Delegate Shetty)
Environment and Transportation Judicial Proceedings
Condominiums and Homeowners Associations - Rights and Restrictions -
Composting
This bill prohibits a recorded covenant or restriction, a provision in a declaration, or a
provision in the bylaws or rules of a condominium or homeowners association (HOA) from
prohibiting or unreasonably restricting an owner from contracting with a private entity to
collect organic waste materials from the owner for composting at a composting facility.
For HOAs only, the bill also prohibits a recorded covenant or restriction, a provision in a
declaration, or a provision in the bylaws or rules of an HOA from prohibiting or
unreasonably restricting a lot owner from composting organic waste materials for the
owner’s personal or household use, as specified.
Fiscal Summary
State Effect: The bill does not directly affect State government operations or finances.
Local Effect: The bill does not directly affect local government operations or finances.
Small Business Effect: Minimal.
Analysis
Bill Summary: Lot owners composting for personal or household use must own or have
the right to exclusive use of the area where the composting is conducted and observe all
laws, ordinances, and regulations of the State and local jurisdiction that pertain to
composting. Additionally, a recorded covenant or restriction, a provision in a declaration,
or a provision in the bylaws or rules of a condominium or HOA that unreasonably impedes
the ability of a private entity to access the common elements for the purpose of collecting
organic waste materials from an owner must be interpreted as a prohibited restriction.
Current Law: Statute neither prohibits nor specifically permits restrictions or prohibitions
on composting activities under the circumstances set forth in the bill. Statutory provisions
related to the operation of composting facilities are set forth in Title 9, Subtitle 17 of the
Environment Article. However, such requirements do not regulate or otherwise interfere
with the conduct of a consumer who composts organic materials generated on a residential
site controlled by that consumer.
For more information on condominiums and HOAs, which are commonly referred to as
common ownership communities, see the Appendix – Common Ownership
Communities.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Office of the Attorney General (Consumer Protection Division);
Judiciary (Administrative Office of the Courts); Department of Legislative Services
Fiscal Note History: First Reader - January 21, 2021
rh/jkb Third Reader - March 16, 2021
Revised - Amendment(s) - March 16, 2021
Analysis by: Donavan A. Ham Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 248/ Page 2
 Appendix – Common Ownership Communities
When a person purchases a single-family home, condominium, or an interest in a
cooperative housing corporation, he or she may also be required to join an association of
owners, which is intended to act in the common interests of all the homeowners,
condominium unit owners, or cooperative owners in the community. Collectively, these
associations are often referred to as common ownership communities (COCs). In
Maryland, a growing number of newly constructed or newly converted residences are
located in some form of a COC.
The affairs of a condominium are governed by a council of unit owners, which comprises
all unit owners. Among other powers, the council of unit owners has the power to impose
assessments on the unit owners to pay common expenses. A council of unit owners may
delegate its powers to a board of directors, officers, or a managing agent. Condominiums
are governed under Title 11 of the Real Property Article.
Many new housing developments are subject to a homeowners association (HOA) that is
created by a governing document and has the authority to impose mandatory fees on lots
in the development in connection with the provision of services or for the benefit of the
lots, the lot owners, or the common areas. HOAs are governed under Title 11B of the Real
Property Article.
A cooperative housing corporation or “cooperative” is a corporation that owns real
property. A resident of a cooperative does not own his or her unit; rather, the person owns
an interest in the corporation, which leases the unit to the person for residential use.
Cooperatives are governed by the laws in Title 5, Subtitle 6B of the Corporations and
Associations Article.
Condominiums and HOAs may be authorized by their governing documents to impose
liens on units or lots to collect unpaid assessments or fees. In a cooperative, the governing
documents usually provide for the collection of delinquent fees, and evictions for unpaid
fees are generally pursued by way of a landlord-tenant action.
Since registration of the various COCs is not required statewide, the exact number of COCs
in Maryland is unknown. However, public offering statements for condominium regimes
are required by law to be registered with the Secretary of State (SOS). SOS registration
records show that, as of December 2020, 2,739 condominium regimes have been registered
with the State. The State Department of Assessments and Taxation, which maintains
assessment records based on class of property, reports that there are 221,999 condominium
units in the State as of July 2020. The Foundation for Community Association Research
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estimated that there were 6,785 community associations with an estimated 1 million
residents in these associations in the State in 2019, the most recent information available.
Task Force on Common Ownership Communities
With a growing number of Marylanders residing in COCs, and evidence that some COCs
had issues with governance, dispute resolution, and financial stability, the
General Assembly created the Task Force on Common Ownership Communities in 2005
(Chapter 469 of 2005). The issues addressed by the task force included the education and
training needs of COC boards and prospective buyers, availability of alternative dispute
resolution services, special considerations of aging COCs, collection of assessments, and
resale of homes within COCs. The task force met 10 times, held five public hearings, and
submitted its final report in December 2006. The report’s findings and recommendations
have served, in subsequent years, as the basis for numerous pieces of legislation intended
to improve the operation of COCs. This legislation, enacted from 2007 through 2020:
 authorized a group of three or more unit or lot owners in a condominium or HOA
to petition a circuit court to appoint a receiver in specified situations frequently
found in aging communities (Chapter 321 of 2007);
 gave the Consumer Protection Division within the Office of the Attorney General
increased authority over violations of the Maryland Homeowners Association Act
(Chapter 593 of 2007);
 eased restrictions on the ability of condominiums and HOAs to amend their
governing documents (Chapters 144 and 145 of 2008 and Chapter 480 of 2017);
 strengthened the transition process from developer to the governing body of a
condominium or HOA by allowing the governing body to terminate specified
contracts and requiring the developer to provide specified documents (Chapters 95
and 96 of 2009);
 required the governing body of a COC to purchase fidelity insurance or a fidelity bond
covering various acts of malfeasance by COC officers, directors, and other specified
employees and agents (Chapters 77 and 78 of 2009 and Chapter 615 of 2010);
 granted priority to a specified portion of a lien of a condominium or HOA over the
claim of a holder of a first mortgage or first deed of trust in the event of a foreclosure
on a unit or lot (Chapter 387 of 2011);
 limited the amount of damages for which the governing body of a condominium or
HOA may foreclose on a lien against a unit owner or lot owner (Chapters 448 and
449 of 2013);
 expanded the purposes for which a condominium’s board of directors may hold a
closed meeting, similar to the law for an HOA, by allowing a meeting to be closed
to consider terms or conditions of a business transaction in the negotiation stage if
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 disclosure could adversely affect the economic interests of the council of unit
owners (Chapter 110 of 2013);
 established meeting standards and standards for late charges for delinquent
payments, eviction restrictions, an auditing process for books and records, and a
dispute settlement mechanism for cooperatives under specified circumstances
(Chapter 567 of 2014);
 altered the contents of a required disclosure for the resale of a condominium unit,
authorized the assessment of specified fees by a condominium council of unit
owners or an HOA for providing specified information, and required the
Department of Housing and Community Development to adjust the maximum
authorized fees every two years (Chapter 735 of 2016 and Chapter 817 of 2017);
and
 increased to $10,000 the maximum amount of the council of unit owners’ property
insurance deductible for which a specific unit owner is responsible if the cause of
any damage to or destruction of the common elements or units of a condominium
originates from an event inside that owner’s unit (Chapters 56 and 57 of 2020).
The task force’s report also featured findings and recommendations relating to the creation
of an ombudsman in local governments. Since the report’s release, Prince George’s County
created its Common Ownership Communities Program in 2007 with the stated purpose of
assisting governing bodies as well as owners and residents of HOAs, residential
condominiums, and cooperative housing corporations with education, training, and
alternative dispute resolution. Charles County and Montgomery County have offices
dedicated to COCs that predate the task force.
Finally, findings and recommendations of the report that have not been codified in statute
pertain to reserves of COCs and the uniformity of COC depository requirements.
HB 248/ Page 5


Statutes affected:
Text - First - Condominiums and Homeowners Associations - Rights and Restrictions - Composting: 91-701 Environment, 11-111.4 Real Property
Text - Third - Condominiums and Homeowners Associations - Rights and Restrictions - Composting: 91-701 Real Property, 11-111.4 Real Property