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#133-O, Balderston v. Kenwood Place Condominium (February 28, 1992) (Panel: Bromberg, Chester, Pruitt)

The condominium owner (CO) challenged a $300,000 special assessment on numerous grounds including the lack of proper notices and the lack of demonstrated necessity.

The evidence at the hearing showed that in May, 1991, the condominium association (CA) voted to impose a $300,000 special assessment, which exceeded the approved budget by 15%.  The purpose of the special assessment was to replace the building's airconditioning system.  There was no imminent threat to the damage to the building or to the health and safety of the residents if the system was not repaired.  The CA did not send at least a 10-day notice to the residents of the meeting to amend the budget by imposing the special assessment, nor did it send the members a copy of the proposed amendment at least 30 days before the vote on the amendment.  The CA acted after receiving several engineering studies of the system.  Although the CA was notified that the complaint had been filed with the Commission, the CA continued to attempt to collect the assessment from the CO and other unit owners.

The hearing panel held that the failure to give at least 10 days' notice of the special meeting to amend the budget was a violation of Section 11-109.2 of the Maryland Condominium Act.  The panel further held that the failure to distribute the proposed budget amendment at least 30 days before voting on it was a violation of Section 10B-18(b) of the Montgomery County Code; and the CA's actions to enforce the collection of the special assessment was a violation of the "automatic stay" provisions of Section 10B-9(e) of the Montgomery County Code.  However, the CA had no legal obligation to notify all the unit owners of their right to appeal the decision to impose the special assessment to the Commission, and therefore did not violate Section 10B-9(d) of the County Code.

The hearing panel further held that the CA had the legal right to make the business judgment to impose the special assessment.

The panel ordered the CA: 1. to immediately cease the collection of the special assessment; 2. schedule a special meeting for consideration of the proposal to impose the special assessment; 3. give the members a copy of the proposal at least 30 days prior to the vote on the proposal; and 4. give the members at least 10 days' notice of the meeting at which the proposal would be voted upon.