A new Montgomery County law promises to let in some "sunshine" on the meetings of the boards of directors of condominiums and other homeowner associations that previously may have been closed.
The new law, which went into effect July 26, appears to be the first of its kind in the area but is similar to laws passed in other jurisdictions, including the state of Florida, according to housing industry experts.
The Montgomery County measure provides that all meetings of homeowners' associations, including the boards of directors or any committee created by the board, be open to unit owners, tenants and guests of unit owners, and to the news media.
Under the law, a homeowners' association means any private organization of persons owning or living in residential units that has the authority to impose fees on the owners or occupants for services. Included are such groups as councils of unit owners of a condominium, cooperative housing corporations and organizations of owners of a planned unit development. The group is included whether or not it is nonprofit, a for-profit corporation or unincorporated association.
Besides requiring meetings to be open, the Montgomery law requires that there be reasonable advance notice of the meetings -- at least three days -- and that they be held at places and times convenient to most members. It also sets down certain procedures for the election of directors of homeowners' associations, including the requirement that election materials list candidates in alphabetical order without suggesting a preference among candidates. There are also rules governing absentee ballots and proxies.
Montgomery County sources say there are at least 16,000 condominium units in garden apartments, town houses and high-rise buildings covered by the law.
"Prior to passage of the law, tenants had expressed concern that their associations would make decisions about the budget, use of reserve funds for investment and other significant matters without their knowledge," according to Judy Doctor, manager of consumer education and information for Montgomery County's Office of Consumer Affairs. "In passing the law, the County Council established what it considers to be the proper climate for homeowners' association activities -- that they be open and accessible."
The measure was sponsored by Montgomery County Council member David L. Scull, who had called it "fair play" legislation. In passing it, the council said that the homeowners' associations deliver services and exercise powers that correspond in many respects to municipal services.
"The county has taken the position that these associations are mini-governments in a sense," says Joe Giloley, program manager of the condominium information center of the consumer affairs office. "The county says that because you are taxed with homeowner assessments and have to live with laws and regulations of homeowner associations, you should have access to due process in its activities."
While he hadn't seen Montgomery's law, James Dowden, executive vice president of the Community Associations' Institute, said his association fully supports the concept of open meetings. The national group, whose 5,500 members include developers, public officials, property managers, condominium presidents and others involved in associations, recommends to its members that associations operate on the same principles that a local government would follow, Dowden says. That includes open meetings and giving advance public notice.
Dowden said his group recommends to associations that they set aside a certain amount of time at each meeting -- say, a half-hour -- for participation from members who appear and want to make their views known. The group also supports some exceptions to the "open" meeting concept, just as in the public sector. Meetings of the board should be closed when directors are discussing personnel matters; matters concerning individuals -- for instance, those who are behind in assessments -- litigation and contract disputes, Dowden suggests. The Montgomery law allows meetings to be closed for such discussions.
"The open meeting gives an outlet for those who have legitimate complaints," he says. "Folks have a right to see the process work."
However, Dowden said that "in general they don't participate and don't show up." An increasing number of condo boards are giving notice and encouraging attendance and find it frustrating because often no one comes, he said. "Very little happens at a board meeting unless fees are raised," he said. "We tell boards that for controversial items, they ought to hold open hearings if they can."
Most board meetings of condos are relatively routine, taking up administrative matters, he said. "I don't think most boards have made a deliberate effort to close their meetings," he added. "I think they are not going out of their way to let everybody know they can come to a board meeting if they want to . . . "
At least one condominium owner in Montgomery County, Dorothy Sager, will likely be attending meetings of the board of her condo board. Sager, founder of the Montgomery County Association of Condominium Unit Owners, fought hard for the Montgomery law and testified before the Maryland legislature this spring in support of a statewide bill to protect condo residents.
"As condominium owners, my husband and I found ourselves in the unfortunate situation where our condominium fee increased 70 percent in three years and services decreased at an alarming rate," she testified. She said the board of her condo met in closed session for three years, in one case making a decision to spend funds intended for maintaining the complex to buy real estate instead.
Giloley said the bill didn't become law in Maryland but a recently appointed commission on condominiums appointed by Gov. Harry Hughes will be discussing the "sunshine" issue, among others.