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SB 866

Real Estate Board; membership, qualifications.

2025 Regular Session Introduced by Bryce Reeves

Creates a statewide ombudsman unit, a public online database of governing documents, and county-level commissions to oversee common ownership communities like condos and HOAs.

Acts of Assembly Chapter text (CHAP0609)
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Bill Summary · SB 866

SB 866 — Common Ownership Communities: Ombudsman Unit, Governing‑Document Database, and Local Commissions

Status: Hearing 2/25 at 1:00 p.m. (Introduced Jan. 22, 2025)
Primary subject: Establishes statewide ombudsman, filing/database requirements, and standards for local commissions dealing with condominiums, cooperatives, and homeowners associations.

Purpose / Intent

To increase transparency, consumer protection, and local oversight for “common ownership communities” (COCs)—defined to include condominiums, cooperative housing corporations, and homeowners associations—by:
- creating a Common Ownership Community Ombudsman Unit (COCOU) within the Office of the Attorney General (OAG);
- requiring COCs to file governing documents with the Department of Housing and Community Development (DHCD) and making those documents publicly accessible in an online database; and
- establishing minimum membership, operating, and procedural requirements for county-level local commissions on common ownership communities.

Key provisions

  • Definitions: Clarifies “common ownership community,” “governing documents,” “governing body,” “member,” and what constitutes a covered “dispute” (e.g., enforcement actions, budget adoption, elections, records access), while listing certain exclusions.
  • COCOU (OAG – Division of Consumer Protection):
    • Established with a full‑time ombudsman (must be a Maryland Bar member) and staff as provided in the State budget.
    • Duties: monitor law changes; publish information for members; provide referrals to ADR services; receive and respond to complaints about final adverse decisions by governing bodies or managers.
    • Powers/procedures: COCOU may (1) determine whether a final adverse decision conflicts with applicable laws/regulations and notify parties, or (2) refer complaints to an appropriate local commission for review. If a subsequent complaint for the same alleged violation is received within 1 year, COCOU must refer it to the local commission.
    • Reporting: Annual report to DHCD and the General Assembly due Dec. 1, 2027 and each Dec. 1 thereafter, documenting complaints, referrals, actions, and outcomes.
  • DHCD filings & public database:
    • COCs must file copies of governing documents and amendments with DHCD.
    • DHCD must create and maintain a publicly accessible online database of filed documents.
    • Fees: DHCD may charge up to $100 for an initial filing and up to $25 for an amendment.
    • Penalty: Failure to file is subject to a $500 fine.
  • Local commissions (county-level, if established):
    • Membership must include COC owners and specified professional representations; counties set total membership. Local government and a county agency designee must serve as nonvoting members.
    • Operational rules: meet at least monthly; members receive no compensation but may be reimbursed for expenses; term limits (no more than two consecutive terms); must adopt conduct rules, keep records, examine COC needs, advise government, and provide training materials.
    • Authority: may employ staff, establish processes for disciplinary matters, register COCs within the county, and collect fees if authorized.
    • State law provisions for local commissions and dispute resolution supersede inconsistent local laws.

Who is affected

  • Directly: Condominium associations, cooperative housing corporations, homeowners associations, their governing boards, managers, and unit owners/members.
  • Government: OAG (new unit and staff), DHCD (database and filing functions), counties that create or adjust local commissions, and ADR providers.
  • Indirectly: property managers, attorneys, and vendors serving COCs; potential small‑business impacts for service providers.

Procedural/timeline aspects & fiscal impacts

  • Effective date: July 1, 2025 (per fiscal note).
  • Ongoing: COCOU annual reporting begins Dec. 1, 2027.
  • Fiscal note (Maryland Department of Legislative Services): projects increased general fund revenues of about $710,000 in FY2026 (from filing fees) and increased OAG/DHCD expenditures of ~$263,200 in FY2026 for staffing and implementation; net positive in FY2026 with ongoing smaller revenue/expenditure effects in later years.
  • Local governments: may incur costs to establish or modify commissions and may generate revenue if they set fees.

Potential impact / considerations

  • Benefits: greater transparency (public database), centralized consumer help and referrals, clearer local oversight mechanisms and standardized expectations for local commissions, and a non‑court pathway for assessing repeated governance violations.
  • Burdens: new filing obligations and fines for noncompliance; administrative costs for DHCD, OAG, counties, and COCs (especially smaller associations); need for staffing and budgeting to implement the ombudsman and database.
  • Supremacy: where local commissions/dispute resolution procedures are created under the bill, the state provisions supersede conflicting local laws to the extent of the conflict.

If you want, I can:
- Draft a one‑page fact sheet for COC boards summarizing new filing steps and deadlines; or
- Extract and format the proposed statutory language sections (COCOU, DHCD filing, Title 11C) for quick reference.

Compiled from official sources — confirm details with the bill’s official record.

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