Maryland Condominium Buyers Beware of This Change

The rules changed on June 1 for condominium unit owners and associations in the Greater Crofton area and throughout Maryland.

Until then, condo associations were responsible for upkeep and structural repairs to both the common elements and units, while unit owners were responsible only for personal property within their units.

A copy of the master insurance policy was provided to unit owners at the time of purchase, along with other condo documents, so unit owners would know the extent of the association's insurance coverage and they could purchase supplemental insurance accordingly. That's no longer the case.

The new law (HB 287) has two requirements you should know about:

1. Condo associations must maintain property insurance on the common elements and units, but NOT any upgrades or replacements made by unit owners.

2. Unit owners are now responsible for any damage that originates in their own unit, up to the $5,000 deductible of the association's master policy.

How does this affect you, a Maryland condo owner? Let me give you some examples:

• If a broken pipe in your unit causes water damage in your unit, another unit or the common elements of the condo, you will be held responsible.
  
• Should a fire begin in your unit and spread to other parts of the building, you will be liable up to the $5,000 deductible of the association's master insurance policy.

Maryland condo buyers will be notified of this obligation at the time of initial or resale purchase AND condo associations will provide written reminders to unit owners annually. (Agents, take note of this and be sure to use the new condo forms provided by MAR or your local association whenever you sell a condo.) A Maryland condo buyer who does not receive this notice may terminate his/her purchase contract.

How will Maryland condo owners cope with this new responsibility?

I'm not an insurance expert, so let me defer to local real estate attorney Benny L. Kass. He indicates that the answer lies in a condo owner's own insurance policy. He suggests you obtain an HO-6 policy from your favorite insurance company because it will cover any personal losses and supplement the condo association's master policy.

If you're new to Maryland and don't have a local insurance agent, check with one of these agents in the Greater Crofton area for more information:

• Allstate, Hyacinth Tucker
• Nationwide, Ed Reilly
• State Farm, Alicia Popham

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Margaret Woda is a licensed Associate Broker in Crofton Maryland. She specializes in serving the real estate needs of home owners and home buyers in Anne Arundel, Howard and Prince George's Counties, Maryland, including Fort Meade, Andrews AFB, and the U.S. Naval Academy. If you enjoyed reading this post, check out Focus On Crofton and Your Online Relocation Package for Anne Arundel County.