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MarylandHB 02922025 Regular SessionHouseWALLET

Cooperative Housing Corporations, Condominiums, and Homeowners Associations - Funding of Reserve Accounts and Preparation of Funding Plans

Sponsored By: Marvin E. Holmes (Democratic)

Signed by Governor

Real PropertyCorporations and AssociationsArchitectsBudgets -see also- Capital BudgetsBuilding Maintenance and RepairCondominiumsContractors -see also- Construct; Electricians; etc.Contracts -see also- ProcurementElectriciansEngineersHealth -see also- COVID19; EnvHlth; MedCon; etc.Heating and CoolingHomeowners AssociationsMeetings -see also- Hearings; Open GovernmentNoticesPlumbingPrices -see also- Consumer Price IndexRecords -see also- Land Records; Vital RecordsResidential Property -see also- Apartments; CondominiumsSafety -see also- Occupational SafetySewageStandards and Best PracticesStudies -see also- Commitees & Commissions; ReportsTimeUtilities -see also- Recycl; Refuse; Sewage; Teleph; WaterVoting -see also- Absentee and Mail-In Voting

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 0 benefits, 0 costs, 6 mixed.

Homeowner Reserve Deposits Get Longer Phase-In

Beginning October 1, 2025, covered Maryland cooperatives, condominiums, and homeowners associations must make required reserve deposits by each fiscal year's end. Deposits follow the latest study and funding plan, subject to hardship relief. After an initial study, communities have five fiscal years following the study's fiscal year to reach recommended annual funding, up from three. Cooperative and condominium reserve budgets also lose the former $10,000 component-cost cutoff, bringing lower-cost items into planning. Boards must review reserve adequacy each year; this review does not require another study and required funding can affect owner charges.

Homeowner Reserve Plans Put Safety First

Beginning October 1, 2025, covered Maryland cooperative, condominium, and homeowners association boards must create reserve funding plans with qualified professional help. Plans must use component funding, cash-flow, baseline funding, threshold cash-flow, or another method consistent with generally accepted accounting principles. Plans must put health, safety, structural strength, essential systems, and board-identified critical needs first; required contributions can affect owner charges. Reserve money used outside the plan must be repaid within five years after use. Boards must review funding progress at each annual meeting.

Temporary Reserve Funding Relief for Homeowners

Beginning October 1, 2025, covered Maryland housing boards can reasonably reduce required reserve funding after a two-thirds vote finds financial hardship. Funding must still cover priority needs, including safety, structural strength, and essential systems. Relief lasts no more than one fiscal year at a time; renewal requires another two-thirds vote. Owners must get reasonable advance notice, and votes must occur at regular or special meetings. Boards must document good-faith efforts to resolve the hardship and restore funding; relief can ease current charges but slow other reserve savings.

Homeowners Get Access to Qualified Studies

Beginning October 1, 2025, required updated studies for covered Maryland housing communities must meet professional preparation and owner-access rules. Preparers qualify through 30 studies prepared or participated in through a study firm during the prior three years. They can also qualify through a current Maryland architect or professional engineer license, a Community Association Institute reserve specialist designation, or an Association of Professional Reserve Analysts professional reserve analyst designation. Owners can inspect and copy studies and updates. Boards must review them when preparing proposed annual budgets and send owners a summary with the budget.

More Detailed Repair Studies for Homeowners

Beginning October 1, 2025, covered Maryland cooperatives, condominiums, and homeowners associations must itemize shared repair and replacement components, including size or quantity. Condominium and association boards set reasonable minimum listing costs based on expenses, excluding minor budgeted expenses. Cooperative minimums must reflect expenses and cannot leave out minor costs otherwise covered by the budget. Studies must show component lifespans, remaining life, repair or replacement costs, and needed annual reserve contributions. Updates are required at least every five years and must review cost and lifespan estimates, completed work, spending, and maintenance contracts.

New Reserve Threshold for Homeowner Associations

Beginning October 1, 2025, Maryland changes which homeowners associations must follow reserve-study rules. The rules cover associations responsible under their declarations for maintaining and repairing shared areas when identified repair or replacement costs total at least $10,000. This replaces the test based on original purchase and installation costs. Associations issuing bonds for capital spending remain exempt. Covered associations face study costs, while owners get better repair planning.

Sponsors & Cosponsors

Sponsor

  • Marvin E. Holmes

    Democratic • House

Cosponsors

  • Nick Allen

    Democratic • House

  • Regina T. Boyce

    Democratic • House

  • Linda Foley

    Democratic • House

  • Wayne A. Hartman

    Republican • House

  • Denise Roberts

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 294 • No: 71

House vote • 4/7/2025

Third Reading Passed

Yes: 107 • No: 32 • Other: 1

Senate vote • 4/7/2025

Third Reading Passed

Yes: 46 • No: 0 • Other: 1

Senate vote • 3/28/2025

Third Readings Passed with Amendments

Yes: 39 • No: 6 • Other: 1

House vote • 3/6/2025

Third Reading Passed

Yes: 102 • No: 33 • Other: 4

Actions Timeline

  1. Approved by the Governor - Chapter 519

    5/13/2025

  2. Passed Enrolled

    4/7/2025House

  3. Third Reading Passed (46-0)

    4/7/2025Senate

  4. Conference Committee Report {833121/1 Adopted

    4/7/2025Senate

  5. Third Reading Passed (107-32)

    4/7/2025House

  6. Conference Committee Report {833121/1 Adopted

    4/7/2025House

  7. Senate Conference Committee Appointed (Senators Waldstreicher, Henson and West)

    4/5/2025House

  8. Senate Refuses Recede

    4/5/2025House

  9. Senate Conference Committee Appointed (Senators Waldstreicher, Henson and West)

    4/5/2025Senate

  10. Senate Refuses Recede

    4/5/2025Senate

  11. House Conference Committee Appointed (Delegates Holmes, Stewart and Nawrocki)

    4/5/2025Senate

  12. House Requests Senate Recede

    4/5/2025Senate

  13. House Refuses Concur Senate Amendments

    4/5/2025Senate

  14. House Conference Committee Appointed (Delegates Holmes, Stewart and Nawrocki)

    4/5/2025House

  15. House Requests Senate Recede

    4/5/2025House

  16. House Refuses Concur Senate Amendments

    4/5/2025House

  17. Third Readings Passed with Amendments (39-6)

    3/28/2025Senate

  18. Floor Amendment {663328/1 (Senator West) Adopted

    3/28/2025Senate

  19. Second Reading Passed with Amendments

    3/27/2025Senate

  20. Floor Amendment {763528/1 (Senator West) Adopted

    3/27/2025Senate

  21. Favorable with Amendments {563727/1 Adopted

    3/27/2025Senate

  22. Motion Laid Over (Senator Ready) Adopted

    3/26/2025Senate

  23. Favorable with Amendments {563727/1

    3/26/2025Senate

  24. Favorable with Amendments Report by Judicial Proceedings

    3/26/2025Senate

  25. Referred Judicial Proceedings

    3/7/2025Senate

Bill Text

  • Enacted

    5/13/2025

    PDF

  • Enrolled

    4/7/2025

    PDF

  • Third Reading

    3/4/2025

    PDF

  • First Reading

    1/9/2025

    PDF

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