Agenda Item 8A
December 8, 2015
Introduction
MEMORANDUM
December 4,2015
TO:
FROM:
County Council
f)(J1
~
Josh Hamlin, Legislative
Attorne~
SUBJECT:
Introduction:
Bill 50-15, Common Ownership Communities - Commission on
Common Ownership Communities - Composition - Dispute Resolution
Bill 50-15, Common Ownership Communities - Commission on Common Ownership
Communities - Composition - Dispute Resolution, sponsored by Lead Sponsor Council President
on behalf of the County Executive, is scheduled to be introduced on December 8, 2015. A public
hearing is tentatively scheduled for January 12, 2016 at 1:30 p.m.
Bill 50-15 would:
(l)
make mediation of certain disputes regarding common ownership
communities mandatory;
(2)
alter the composition of the three member hearing panel;
(3)
alter the composition of the Commission on Common Ownership
Communities to include members of the public;
(4)
transfer duties assigned to the Office of Consumer Protection to the
Department of Housing and Community Affairs;
(5)
provide for certain transition provisions; and
(6)
generally amend County law concerning common ownership communities.
By memorandum dated November 23, 2015, the Executive requested the Council's
consideration of Bill 50-15. The memorandum details the proposed changes to the law, and the
justification for the changes (See ©12-13).
This packet contains:
Bill 50-15
Legislative Request Report
Memo from County Executive
1
10
12
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50-15
Concerning: Common
Ownership
Communities - Commission on
Common Ownership Communities ­
Composition - Dispute Resolution
Revised:
Draft No.
Introduced:
December 8, 2015
Expires:
June 8, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -'-"N=on:=-::e'-:----::--_ _ __
Ch. _ _• Laws of Mont. Co. _ __
Bill
No.
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the Request ofthe County Executive
AN
ACT to:
(1)
(2)
(3)
(4)
(5)
(6)
make mediation of certain disputes regarding common ownership
communities mandatory;
alter the composition ofthe three member hearing panel;
alter the composition of the Commission on Common Ownership
Communities
to
include members of the public;
transfer duties assigned to the Office of Consumer Protection to the
Department ofHousing and Community Affairs;
provide for certain transition provisions; and
generally amend County law concerning common ownership communities,
By
amending
Montgomery County Code
Chapter
lOB,
Common Ownership Communities
Sections
IOB-2, IOB-3, IOB-4, IOB-5, IOB-7A, IOB-9A, IOB-ll, IOB-12, IOB-13, IOB-14,
and
10B-19,
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL No. 50-15
Sec 1. Sections 10B-2, 10B-3, 10B-4, 10B-5, 10B-7A, 10B-9A, lOB-II, 10B-12, 10B­
2
3
13, 10B-14, and 10B-19 are amended as follows:
Article
1.
Commission on Common Ownership Communities.
4
5
*
10B-2. Definitions.
*
*
6
7
8
9
In
this Chapter, the following words have the following meanings:
[(a)]
Commission
Communities.
means the
Commission on
Common
Ownership
[(b)]
Common ownership community
includes:
(1)
a development subject to a declaration enforced by a homeowners'
association, as those terms are used in state law;
(2)
(3)
a residential condominium, as that term is used in state law; and
a cooperative housing project, as that term is used in state law.
10
11
12
13
14
*
[(c)]
*
*
15
16
[Office means the Office of Consumer Protection.]
Department
means
the Department of Housing and Community Affairs.
Director
means the Director of the Department of Housing and
17
18
Community Affairs or the Director's designee.
10B-3. Commission on Common Ownership Communities.
(a)
The County Executive must appoint, subject to confirmation by the
Council, a Commission on Common Ownership Communities. The
Commission consists of 15 voting members.
(1)
[Eight] Five members should be selected from unit or lot owners
or residents of self-managed and professionally managed
condominiums,
cooperative
self-managed and
corporations,
professionally managed
and
self-managed
and
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20
21
22
23
24
25
26
housing
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BILL
No. 50-15
27
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professionally managed homeowners' associations, and may
include members or former members of governing boards.
(2)
[Seven] Five members should be selected from persons who are
members of professions associated with common ownership
communities (such as persons involved in housing development
and real estate sales and attorneys who represent community
associations, developers, housing management or tenants),
including at least one person who is a professional community
association manager.
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36
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ill
Five members should be selected from the public at large who
would not meet the criteria for selection under subsection (a)(1) or
(a)(2).
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39
(b)
Designees of the County Council (if the Council selects a designee),
Planning Board, Department ofEnvironmental Protection, Department of
Permitting Services, Department of Transportation, [Office of Consumer
Protection,] and Department of Housing and Community Affairs are ex­
officio nonvoting members ofthe Commission.
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41
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43
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45
*
(i)
*
*
The [Office] Department must provide the Commission with staff, offices
46
and supplies as are appropriated for it.
47
48
49
G)
The Commission must submit an annual report by September 1 to the
County Executive and the County Council summarizing its activities,
needs, and recommendations, and the extent to which the goals of this
Chapter are being met.
50
51
lOB-4. Administrative support.
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No. 50-15
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In
selecting staff to carry out the [Office's] Department's responsibilities under
this Chapter, the Director must consider the recommendations of the
Commission.
lOB-5. Duties of the [Office] Department of [Consumer Protection] Housing and
Community Affairs.
The [Office] Department, in consultation with the Commission, must:
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58
*
lOB-7A. Notification requirements.
*
*
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60
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The governing body of a community association must, at least annually,
distribute infonnation in a fonn reasonably calculated
to
notify all owners about
the availability of dispute resolution, education, and other services to owners
and residents of common ownership communities through the [Office]
Department and the Commission. The governing body may satisfy this
requirement by including with any annual notice or other mailing to all members
of the community association any written materials developed by the [Office]
Department to describe the Commission's services.
Article 2. Dispute Resolution.
*
lOB-9A. Request for relieffrom stay.
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*
*
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72
*
(b)
*
*
The special panel must consist of 3 voting members of the Commission
designated by the chair, and must include [at least] one representative of
each membership category.
73
74
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*
(a)
*
*
lOB-II. Mediation; dismissal before hearing.
The [Office] Director may investigate facts and assemble documents
relevant to a dispute filed with the Commission, and may summarize the
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BILL No. 50-15
79
issues in the dispute. The [Office] Director may notify a party if, in [its]
the Director's opinion, a dispute was not properly filed with the
Commission, and may inform each party of the possible sanctions under
Section 10B-13(d).
(b)
Ifthe [Office] Director, after reviewing a dispute, fmds that, assuming all
facts alleged by the party [which] that filed the dispute are true, there are
no reasonable grounds to conclude that a violation of applicable law or
any association document has occurred, [it] the Director may so inform
the Commission. The Commission[, in its discretion, may] must dismiss
a dispute if it fmds that there are no reasonable grounds to conclude that
a violation of applicable law or any association document has occurred,
or it may order the [Office] Director to investigate further. The
Commission may reconsider the dismissal of a dispute under this
subsection if any party, in a motion to reconsider filed within 30 days
after the dispute is dismissed, shows that:
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94
(l)
the Commission erroneously interpreted or applied applicable law
or an association document; or
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(2)
material issues offact [which] that are necessary to a fair resolution
ofthe dispute remain unresolved.
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99
(c)
[Any party may request mediation.] If the Director, after reviewing
~
dispute and any investigation, fmds reasonable grounds to conclude that
~
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105
violation of applicable law or an association document has occurred,
the Director must attempt to resolve the matter through mediation. Each
~
named in the dispute or its representative must attend any mediation
conference scheduled
Qy
the Director under this Section unless excused
Qy
the Director. If the
~
that files the dispute refuses or fails to
participate in the mediation, the Director must dismiss the dispute. Ifthe
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BILL
No. 50-15
106
lli!!1Y
that is the subject ofthe dispute refuses or fails to participate in the
mediation, the Director must refer the dispute to the Commission for
resolution. The
pgrty
that is the subject ofthe dispute may not appear at
the hearing, and the hearing panel may award relief to any
PID!Y
that the
facts on the record warrant.
(d)
[If a party requests mediation, the Commission must notify all parties of
the filing and of the mediation session.] Unless otherwise agreed to
Qy
the parties in writing,
~
mediation conference is informal and nothing said
or done during
~
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111
112
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mediation conference is admissible in any subsequent
hearing under this article.
(e)
[The Commission must provide a qualified mediator to meet with the
parties within 30 days after a party requests mediation to attempt to settle
the dispute.] The Commission must promptly schedule
Section 10B-13 if either:
~
hearing under
ill
mediation has not occurred within 90 days
120
121
122
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124
[(
f)
after the Director found reasonable grounds to believe
~
violation
occurred; or
ill
the Director decides at any time that mediation would be
fruitless. The Director may extend the mediation deadline
Qy
mutual
consent ofthe parties.
If
any
party refuses to attend a mediation session, or ifmediation does not
125
126
successfully resolve the dispute within 10 days after the first mediation
session is held, the Commission must promptly schedule a hearing under
Section lOB-13 unless a hearing has already been held under Section
10B-13.]
127
128
129
130
lOB-12. Hearing Panel.
(a)
If a hearing is scheduled, the chair ofthe Commission must convene a 3­
member panel to hear the dispute.
131
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BILL
No. 50-15
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(b)
The chair must choose [2]
d
members of the panel from the voting
members ofthe Commission. The persons selected must represent the [2]
d
different membership groups of the Commission. [The 2 Commission
members must designate the third member from a list of volunteer
arbitrators trained or experienced in common ownership community
issues maintained by the Commission. The third member must chair the
panel.
If
a suitable arbitrator is not available, the chair ofthe Commission
must designate the third panelist from among the voting members of the
Commission, and must designate the chair of the panel.] The chair must
designate one panel member to serve as panel chair.
*
IOB-13. Administrative hearing.
*
*
*
*
*
(d)
The hearing panel may award costs, including reasonable attorney's fees,
to
any party ifthe other party:
(1)
filed or maintained a frivolous dispute, or filed or maintained a
dispute in bad faith;
(2)
[unreasonably] refused to participate in mediation of a dispute[, or
unreasonably withdrew from ongoing mediation]; or
(3)
substantially delayed or hindered the dispute resolution process
without good cause.
The hearing panel may also require the losing party in a dispute to pay all
or part of the filing fee.
(e)
[the] The hearing panel must apply state and County laws and all relevant
caselaw to the facts ofthe dispute, and may order the payment ofdamages
and any other reliefthat the law and the facts warrant. The decision ofthe
156
157
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BILL
No. 50-15
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hearing panel is binding on the parties, subject to judicial review under
Section 2A-ll.
*
(i)
*
*
The Commission, acting through the [Office] Department and the County
Attorney, may enforce a decision of the hearing panel by taking any
appropriate legal action.
*
*
(b)
*
*
*
*
10B-14. Settlement of disputes; assistance to parties.
The [Office] Director may infonn any party who has settled a dispute by
mediation, or any party who prevails in a hearing held under Section lOB­
13, about how the agreement or decision can be enforced.
10B-19. Enforcement.
(a)
(b)
The [Commission] Department may enforce this Article by legal action.
In
addition to any action by the [Commission] Department and any other
action authorized by law, including the filing of a dispute under Article
2, any person may file an action:
(1)
for injunctive relief to enforce this Article or correct any violation
of
it,
and
(2)
to recover damages for a loss sustained
as
a result of a violation of
this Article.
Sec. 2. Effective Date.
Sections 1OB-ll (c), (d), and (e), which mandate mediation of disputes, applies
to all disputes filed with the Commission after this Act takes effect as provided in
Charter Section 112.
Sec. 3. Transition.
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The first three vacancies of members selected under Section IOB-3(a)(l) and
the first two vacancies of members selected under Section IOB-3(a)(2) must be filled
by members selected under Section IOB-3(a)(3).
Approved:
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187
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189
Nancy Floreen, President, County Council
190
Approved:
Date
191
Isiah Leggett, County Executive
192
This is a correct copy ofCouncil action. .
Date
193
Linda M. Lauer, Clerk of the Council
194
Date
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LEGISLATIVE REQUEST REPORT
Bi1l50-15
Common Ownership Communities
-
Commission on Common Ownership Communities
Composition Dispute Resolution
DESCRIPTION:
This legislation would: 1) make mediation a mandatory component of
dispute resolution when complaints are filed with the Commission on
Common Ownership Communities (CCOC); 2) change the
composition of the Commission by requiring that one third. of the
Commissioners be selected from members of the general public; 3)
replace the volunteer arbitrators that currently chair hearing panels
with voting members of the Commission; and 4) transfer staff support
duties from the Office of Consumer Protection to the Department of
Housing and Community Affairs.
This legislation addresses three concerns that have arisen about the
operation of the current CCOC law. 1) Adjudication of disputes has
required parties to engage in hearings that require the parties to comply
with complex rules of procedure. 2) The CCOC does not have
adequate access to staff support and other resources to carry out its
mission as effectively as initially envisioned. 3) CCOC hearing panels
are currently chaired by outside volunteers that are not voting members
of the Commission and have been found. in some instances. by the
Ethics Commission to have a conflict of interest.
To improve the efficiency and effectiveness of the CCOC by
encouraging informal resolution of disputes between homeowners.
residents and governing bodies of common ownership communities;
to ensure that hearing panels are composed of individuals who
represent a balance of the interests involved in adjudication of
disputes; and to provide the CCOC with better access to administrative
support and technology resources.
Department of Housing and Community Affairs
To be requested.
To be requested.
To be requested.
N/A
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
Eric Friedman. Office of the Consumer Protection, 240-777-3636
Clarence Snuggs. Department ofHousing and Community
Affairs.
240­
777-3600.
@
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APPLICATION
WITlllN
MUNICIPALITIES:
PENALTIES:
Only applicable in the City of Rockville.
N/A
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·····',1· .-'
.
.
..
:'
OFFICE OF THE COUN'IY EXECUTNE
ROCKVIlLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
November 23, 2015
TO:
George Leventhal, President
Montgomery County Council
FROM:
SUBJECT:
Isiah Leggett, County Executi__
~,...
. _.- ­
Commission on Common Ownership Communities - Amendments to
Chapter lOB
I am forwarding with this memorandum proposed legislation
to
amend
Chapter lOB, Common Ownership Communities. I believe that this legislation,will
enhance the ability of the. Commissionc)fl COinmoIl.Qwpership
CODlIill.!'fiiti~
(CeOC) to
better fulfill the purposes for which
it
was" established 25 years ago.
As
you know.
I
was
a
member of the County Council when the CCOC was established, and I remember well the
intent and the need for creating this first-of-its kind commission. After 25 years, however,
revisions are needed.
Several factors contribute to the timeliness of these proposed legislative
changes. Over one-third of Montgomery County's residents now live in conu:tlon,
ownership communities, and the CCOC has gathered considerable experience regarding a
multitude of issues. The Office of Legislative Oversight recently submitted a report
evaluating the CCOC and offered several recommendations, including having the staff
support for CCOC
be
provided by the Department of Housing
and
Community Affairs.
Furthennore, Montgomery CountY's Ethics Commission has identified a conflict of
interest regarding the manner in which CCOC hearing panels are convened. Finally, a
review of the nature of the complaints filed, as compared to the mechanisms used to
process those complaints, indicates that the CCOC dispute resolution program has strayed
from its original intent to function as an alternative to court litigation.
In order to systematically address all of the above issues, and to ensure that
the CCOC:wiU continue to contribute to the quality of life in Montgomery County, the
legislation I am forwarding to the Council for its consideration would:
(1)
make mediation
a mandatory component of dispute resolution when complaints are filed with the CCOC;
(2)
change the composition of the Commission by requiring that one-third of the
CommissiC!ners be selected from members of the general public;
(3)
replace
th~
volunteer
arbitrators who currently chair hearing panels with voting members of the Commission;
_"~/311.
:140-7 3-3...TTY
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""'1
.... ,.
..;, ......... :,. '.'1
.\
George Leventhal, President
November 23,2015
Page 2
and (4) transfer staff support duties from the Office ofConsumer Protection to the
Department of Housing and Community Affairs.
Executive staff stand ready to work with the Council on this important
legislation.
IL:tjs
@