The Maryland General Assembly is considering a bill that would require condominiums to remove limits on the number or percentage of units that can be rented, if the unit owner demonstrates “financial hardship” and meets certain other requirements.  House Bill 1039 would establish new Section 11-111.4 in the Maryland Condominium Act, and provide that unit owners who meet one of the bill’s six definitions of financial hardship may request a waiver from any rental limitations applicable to the community.  The unit must be the owner’s primary residence, and the appraised value of the unit must be less than 90% of what is owed.  The exception to rental restrictions would be for a term of three years.

Under the proposed law, “financial hardship” means:  (1) a reduction in household income that exceeds 50%; (2) an increase in household expenses of more than 33%; (3) the death of the unit owner or their spouse; (4) a change in location of the unit owner’s permanent employment, or permanent employment of the unit owner’s spouse, 100 miles of more from the unit; (5) military deployment of 12 months or more of the unit owner or their spouse; or (6) divorce of the unit owner.

The request for waiver must be made in writing, and include evidence that (1) the unit owner meets one of the definitions of “financial hardship;” (2) the unit is the owner’s primary residence; (3) the unit owner was a resident of Maryland at the time of the “financial hardship;” and (4) the appraised value of the unit is less than 90% of the amount owed.

The bill proposes that the process for granting or denying a request for waiver must be included in the declaration, bylaws, or rules of the condominium.  Condominium’s in existence before October 1, 2014, when the law is proposed to take effect, must amend its declaration, bylaws or rules for this purpose by April 1, 2015.

Where a condominium denies a request for waiver, the new would require that notice of the denial be provided to the unit owner, including the specific reasons for the denial.