Purchasers of a condo in Maryland may receive a Special Assessment to fund long-needed repairs of structural defects to common elements that had not been disclosed prior to making an offer and/or prior to closing. In some cases, required repairs may cost more than ten million dollars. Special Assessments can vary, and can be close to or even over six figures. Shocked and outraged new owners of a condo may further face loss of rental income and loss of enjoyment and use of the condo during the prolonged repairs to structural elements, and may fear for their personal safety. Condo unit owners should not conclude that they are just stuck with the situation.

Whitney, LLP’s condominium lawyers represent Maryland condo unit owners in Special Assessment claims.  If you have purchased a condo unit and are faced with a surprise Special Assessment, you have legal rights and can fight back.

Surprise Special Assessments For New Home Owners of Condominium Units in Maryland

In Maryland, legal remedies exist for the failure to disclose latent defects and material facts. These remedies exist under Maryland common law and pursuant to the duties created by various statutes including the Maryland Real Estate Brokers law, the Maryland Condominium Act and Maryland’s Consumer Protection Act. Depending on the facts, damages may be recoverable against the following parties: the condo seller; the agents and brokers representing the seller and/or buyer; the Condominium Association and the Property Manager for the Condominium Association.

The condo seller, with actual knowledge of a latent defect, has a duty to disclose such defect. The seller may have actual knowledge by virtue of notifications from the Condominium Association and/or Property Manager or by actually reviewing an engineering structural evaluation report.

Real Estate Agents Must Disclose Material Facts to Buyers About Condo Units

Real estate agents owe buyers the duty to disclose material facts that they know or should know about the condo unit. This duty applies to both the seller’s agent and the buyer’s agent. Moreover, the buyer’s agent has a heightened fiduciary duty to protect the interests of the agent’s client, including reviewing and explaining the various documents and disclosures provided pre-offer and pre-closing. From prior closings in the condominium community, realtors often have intimate knowledge of the needed repairs to the common elements and looming Special Assessments.

Pursuant to the Maryland Condominium Act, the Condo Association and Property Manager are obliged to provide accurate information to condo unit buyers. This includes the duty to furnish a Resale Certificate. Among other significant items covered by the Resale Certificate are disclosures of Special Assessments, current budget, current reserve study report, Building Code violations with respect to common elements of the condominium and pending lawsuits.

Providing false or misleading information, and omission to provide material facts, can subject the Community Association and Property Manager to liability under Maryland’s Consumer Protection Act, which allows the deceived condo unit buyer the right to recover both damages and attorney’s fees.

Special Assessments for Condo Unit Structural Damage

Since the catastrophic collapse of the Surfside Condominium in Florida in June 2021, Condo Associations and condo Property Managers have been acutely aware of the need for structural evaluations of condos, especially in locations like Ocean City, MD where buildings close to the bay or ocean are susceptible to harsh weather conditions including water infiltration. Underlying poor construction and a history of poor repairs combined with structural defects and water infiltration can create serious life safety issues requiring millions of dollars of repairs. Hence the need for Special Assessments.

Looming Special Assessments and Building Code violations must be disclosed. Condo sellers and listings should disclose pending Special Assessments, and sellers and seller’s agents should seek market value subject to the willingness to escrow monies to cover the Special Assessment.

Daniel W. Whitney, Jr. and Daniel W. Whitney, Sr. of Whitney, LLP

Condominium Lawyers for Special Assessments – Whitney, LLP

If you as a new condo owner have been victimized by a surprise Special Assessment, the condominium attorneys of Whitney, LLP can evaluate your predicament and provide advice on your potential legal remedies and right to compensation.

We represent clients across Maryland.  Call us at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.