During 2010 legislative session, then Maryland General Assembly enacted an amendment to Section 10-131 of the Maryland Condominium Act governing the warranty period for the implied warranties on the common elements of a condominium. Originally, the warranty on common elements commenced “with the first transfer of title to a unit owner” and ran for three years. This provision gave rise to problems in enforcing the warranty in communities where unit sales were slow, and a majority of the units remained unsold for an extended period of time. In such cases, majority control of the condominium remained in the hands of the developer well into, and sometimes beyond, three years following the transfer of title to the first unit. As a result, during 2010 session, the General Assembly amended the statute to provide that the common element warranty run for a period of three years from the first transfer of title, or “2 years from the date on which the unit owners, other than the developer and its affiliates, first elect a controlling majority of the members of the board of directors for the council of unit owners, whichever occurs later.” However, it is important to note that the legislation provided that it would only apply prospectively from the time of its enactment on October 1, 2010. Accordingly, any condominium with a declaration, bylaws and plat recorded prior to that date is governed by the original version of the statute, requiring that the warranty commence upon the first transfer of title to a unit and runs for three years.
Common element warranties in condominiums created prior to October 1, 2010 are always governed by the original provision, regardless of when the unit owners took control. Common element warranties in condominiums created after October 1, 2010 may be governed by either the original provision or the amendment. If three years after transfer of title to the first unit is later than two years after the unit owners take control, the original provision applies. If, however, two years after the unit owners take control is later than three years after transfer of title to the first unit, the amendment applies.
Section 11-131(d) provides for “an implied warranty on the common elements from developer to the council of unit owners,” that is also expressly in addition to the implied warranties provided in Section 10-203. Like the warranty on the units, this common element warranty is also applicable only to specific components, consisting of “the roof, foundation, external and supporting walls, mechanical, electrical, and plumbing systems, and other structural components.” The reference to “external and supporting walls” encompasses not only the wall framing members, but cladding systems as well. The inclusion of “structural components” broadens the application of the warranty to any common element component that is part of the building’s structure and framing, as well as community amenities that have a structural capacity, such as paving, pools, sport courts, curbs, steps and sidewalks, and drainage areas. Arguably, the specification of these components as being subject to the common element warranty requires that such components be defined as part of the common elements in any condominium regime. Otherwise, the full scope of the Legislature’s intent in providing the warranty could be negated by excluding some of these components from inclusion in the common elements. Indeed, the statute presumes that these specified components will be among the common element in every condominium.
The common element warranty provides “that the developer is responsible for correcting any defect in materials or workmanship, and that the specified common elements are within acceptable industry standards in effect when the building was constructed.”
It is important to note that notice of a defect must be given to the developer during the warranty period, so identifying the proper time during which the warranty is in effect is pertinent to satisfying the notice requirement.