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Delegate Holmes seeks greater transparency for developer‑controlled common‑interest communities; AG supports notice and anti‑commingling rules
Summary
House Bill 295 would require developer-controlled condominium and homeowners associations to include a unit/lot owner on the board and set notice rules on bond releases; the Attorney General’s Consumer Protection Division backed the proposal as a transparency and fiscal‑responsibility measure; industry groups asked for technical fixes.
The committee considered House Bill 295, a bill from Delegate Marvin Holmes that would change governance rules for developer‑controlled common ownership communities, requiring developers to include a lot or unit owner on the board during transition and improving notice and bonding transparency to buyers.
Delegate Holmes said the bill would give new owners “intellectual history” of the association by ensuring at least one owner participates with the developer during the pre‑transition period. The bill also would require notice to owners before a developer’s construction bond is released so homeowners can alert the jurisdiction if roads or other work remain incomplete.
Karen Straughan of the Office of the Attorney General’s Consumer Protection Division testified in support, calling the bill “about transparency and fiscal responsibility.” She said some statutory protections that apply to associations do not apply while the developer controls the association and that requiring separate accounts “would make sure that the association members have the opportunity to know a little bit about what is going on with their community while it's still under developer control.” She also described cases where bonds were released and roads were incomplete.
The Maryland Building Industry Association and other industry witnesses said they were generally open to the bill but requested clarifications. Industry representatives asked for a technical fix to define whether the 25% threshold in the draft refers to a phased development or the entire planned project. They also questioned the utility of public notice on jurisdictional bonds, which are posted between the developer and the jurisdiction.
HOA‑advocacy groups supported owner notice and meeting‑access changes but suggested small amendments on procedures and timing. HOA United asked for a revision allowing public comment at board meetings prior to actions; the group submitted model language used in other states.
No committee vote was recorded. Sponsor and stakeholders said they would continue to negotiate technical language about phase calculations and the bond‑notice mechanism.
