Why Many HOA Rules May Not Be Enforceable in Maryland

Whether they were drafted 10 years ago by a developer, amended last week by an HOA’s Board of Directors, meticulously hewed to the letter of the law, long and technical or brief and simple, the bylaws, architectural guidelines and rules of every Maryland homeowner’s association all have one essential trait in common. None of them are enforceable unless they have been filed in one of the HOA Depositories set up by the State.

Maryland enacted this requirement so that the public can know where to access the regulations and policies that pertain to any particular association.

That is not a problem with some legal documents. For example, when we create HOA’s for our homebuilder and developer clients, we file their Articles of Incorporation with the State Department of Assessments and Taxation. We also record the Declaration of Covenants, Conditions, Easements and Restrictions in the Land Records of the County where the HOA is located.

But other than the Depositories, there is no comparable official “home” for HOA bylaws and rules. According to State law, the bylaws and any rules – setting forth the association’s operating procedures and covering everything from the election of directors to fees collection procedures and architectural control guidelines – must be submitted to the Depository in the association’s County (or Baltimore City). And this is not a “one time only” submission. New or revised rules, policies and guidelines adapted by the HOA’s Board of Directors must also be submitted.

This is where things can get dicey. It is perfectly possible to publish bylaws and rules without putting them in the Depository. It’s also possible – and even likely – that Boards will add or change governing rules without updating the Depository’s records. The HOA may even function forever without consequence.

But if owners or other interested parties consult the Depository – and discover that a particular rule or regulation is not on record – they have grounds to disregard it. It is perfectly conceivable that an association might be unable to enforce properly adopted rules. A supplemental fee levied as the result of an unrecorded Board decision may be uncollectible. A homeowner may even discover legitimate grounds to challenge a duly held election.

The Depository filings can be made by developers and builders during the time they are in control of the HOA, and by owner-controlled Boards of Directors after transition of control from the developer or builder.

Whatever your relationship may be to an HOA – as a founding developer, a Board member or homeowner – it is absolutely crucial to add newly adopted bylaws, rules, policies, and other guidelines to the Depository so that they remain up-to-date and enforceable.

Article by Michael Faerber originally published here in The Beacon, by Chesapeake Region Chapter Community Associations Institute.