A key Senate subcommittee agreed today to Gov. Harry Hughes' emergency change in the state's year-old condominium law, to snare those building owners and developers who sent out conversion notices last year in a frantic attempt to beat the law.
That change would effectively "grandfather" most building owners who issued notices last year but have not yet made any real efforts to convert. Those who have not made substantial moves towards conversion would have their conversion notices voided.
The bill, which is an emergency measure, will be put before the full Senate panel Thursday, where it is expected to be approved quickly, said subcommittee chairman Jerome F. Connell (D-Anne Arundel). "We want to try to move it as fast as we can and get it to the floor," Connell said.
The House will consider the same change as soon as the full Senate votes, and Connell predicted last year's loophole could be closed as early as March 1.
Because of that loophole, thousands of Maryland tenants were notified in late May and early June of last year that their buildings would be converted to condominiums. But the attorney general's office said most of the notices were bogus, sent by building owners trying to beat the July 1 date when the law restricting conversions became effective.
By filing a notice before the law went into effect, an owner who later decided to convert--even years from now--would not be subject to the law's requirement that 20 percent of the units be reserved for three years for elderly and handicapped tenants who don't want to move.
The loophole gave lawmakers the problem of separating those developers who never intended to convert from those who really did.
At an emotional public hearing, the subcommittee members heard several developers plead for mercy, as they explained that their sincere conversion notices were inadvertantly issued during the last-minute flood of notices. Some said that they were held up in their conversion plans because of the difficulty in obtaining financing.
As a compromise, the committee decided that those developers who sold 35 percent of their units before this emergency bill takes effect will be exempt. Additionally, developers who entered into a initial financing contract in 1980 would be exempt from some, but not all, of the new restrictions.
"There were some groups which were legitimately in the process (of converting)," said Sen. Margaret C. Schweinhaut (D-Montgomery). "But I want to make sure we don't inadvertantly create another loophole by granting too many exemptions. I'm not interested in giving relief to any of those rascals who filed to escape the law and scared a lot of people. As far as I'm concerned, they should all be put in jail."