November 21, 2005


Dear Clients and Affiliates:


            As a courtesy and at no charge to you, we feel it is important to update you with changes in the law and issues of community concern. With these periodic letters, we hope to keep you abreast of recent changes in the law and matters of importance to you and the community association industry.


            In this, our second Letter of Law, you will find a summary of the following topics:


Part I includes advice to Associations on current issues that appear to be of interest and are surfacing with frequency among our various community association clients.


Page 2                       Gang Violence - Associations’ Obligation Regarding Criminal Acts of Third Parties and Suggestions for Addressing

Page 5                       ✦ Disputes Between and Among Neighbors and the Mediation Alternative

Page 6                    ✦ Preparing for Natural Disasters


Part II includes information on new law and changes to existing law affecting or related to community associations.


Page 8                      ✦ Federal Fair Credit Reporting Act and Credit Reports

Page 8                      Cell Phone Usage by Minors (Changes in the Law)

Page 9                      ✦ Maryland State Task Force on Common Ownership Communities

Page 9                      ✦ Maryland State Task Force on Visual Smoke and Evacuation Alarms for the Deaf and Hard of Hearing

Page 9                     ✦ Homeowners in Foreclosure Protection Act

Page 10                    Electronic Payments and Association Authority to Charge for Service

Page 10                      E-Filing of Court Pleadings

Page 11                     Identity Theft


Part III discusses major local lawsuits that are currently pending against Community Associations.


Page 12                      Scarlett Place and Belvedere Condominium Lawsuits


Part IV deals with news and information regarding our firm.


Page 13                      Kathleen Elmore served as part of the faculty for the September Half Moon, LLC Seminar entitled - Maryland Condominium Law 2005

Kathleen Elmore and Tamara Stoner served as part of the faculty for the November MICPEL seminar entitled - Representing Common Ownership Associations in Maryland

Kathleen Elmore, Ellen Throop, Tamara Stoner, Maricruz Bonfante and Marjorie Osorno attended the annual WBA Rita Davidson Award Dinner in Baltimore to honor Justice Sandra Day O’Connor

                                    Maricruz Bonfante married James Slade in September

                                    www.elmore-throop.com website for law firm


            Should you desire further information on any of the issues or topics discussed in this letter, please call our office.



Part I





            In the past several months there have been three shootings within one of the condominiums our law firm represents. There have also been various episodes of violence in other communities within the State. Montgomery County, in particular, has experienced an increase in the level of gang violence due to the strong presence of the Mara Salvatrucha or MS-13 gang. MS-13 was established in Los Angeles during the 1980's by Salvadoran immigrants as a defense against Mexican gangs. It now operates in more than 30 states as well as parts of Central America and is a criminal enterprise for stolen car parts and drugs. This past summer six men were arrested after a stabbing occurred at a Montgomery County shopping center and other incidents of gang violence continue to be reported throughout the State. Just last week, it was announced that Montgomery and Prince George's counties would receive more than $2 million in Federal funding to support anti-gang initiatives. The money will go to the counties' “Joint Gang Suppression and Prevention Initiative” which includes programs to support prevention, suppression and intervention of gangs. This is further confirmation that gang violence is a matter to be taken seriously. Any other counties with similar problems may also want to research the availability of Federal funds to support prevention of gangs.


            In light of these unfortunate incidents, we bring to your attention the liability issues a Board of Directors may face if your community faces gang related issues and we suggest some possible solutions. Primarily, we would like you to be aware that while it is true that the Board cannot guarantee an individual’s safety against all risks, an Association does have an obligation under Maryland law to provide reasonable and appropriate measures to protect against foreseeable injury or loss.


            The general rule in Maryland is that the landlord (the Association) has a responsibility "to use reasonable diligence and ordinary care to keep the portion (of the premises) retained under his control in reasonably safe condition."  This rule applies to defects in the common areas and to criminal acts committed in the common areas under landlord's (Association’s) control. Based on certain similarities between community associations and landlords, especially with respect to the issue of control in the common areas, it seems reasonable and appropriate to conclude that a community association is analogous to a landlord.


            In Scott v. Watson  , Maryland’s highest court found that a landlord has a duty to "exercise reasonable care for the tenant's safety." What is reasonable care depends on the circumstances, including the landlord's knowledge of the extent of criminal activity on the premises. In Hemmings v. Pelham Wood Ltd. Liability Ltd. Partnership  , the court increased the potential liability of property owners who fail to provide reasonable security against criminal acts by ruling that a landlord may be held liable for injury or death caused by criminal acts by third parties within a leased dwelling unit if the harm was foreseeable and the landlord failed to "maintain and regularly inspect" security measures implemented to deter criminal activity. In a more recent case, Maryland’s second highest court further expanded the notion holding that an innkeeper owes a duty of reasonable care to invitees and guests of invitees in the case of Jennifer Corinaldi et al. v. Columbia Courtyard, Inc., et al.  The court reasoned that ordinarily, the possessor of land, including an innkeeper, is under no duty to protect an invitee from harm caused by intentional acts of third persons until the possessor knows or should know that the harmful acts of a third person are occurring or are about to occur. 

             If you are responsible for a community which has an extensive record of criminal acts occurring within it, sufficient warning that harm could eventually come to one of the residents on the property may exist. Under those circumstances, the entity having responsibility and control over the common area may have an affirmative duty to use reasonable care for the residents’ safety within that common area and a duty to institute policies to address these issues. Below are suggestions a Board can take to lessen or avoid exposure to litigation for breaching that duty.


1. Conduct a Comprehensive Risk Assessment Study

            A comprehensive risk assessment should be conducted to identify the factors affecting the safety and security of the community. This includes risks occurring on the property and in the neighborhood, for example, crime rates, demographic factors, building design characteristics, current security practices and procedures, and management operations. Professional consulting companies may assist the Board of Directors or in the alternative, a special security committee made up of persons with security expertise and appointed by the Board could conduct this study to save money. Based on the assessment and report, cost-effective countermeasures should be identified and implemented to the extent possible. Financial resources must be considered when adopting security measures. A program of phased implementation of security measures is a frequently used strategy. For example, you may wish to start by:


            A. Installing and/or adequately maintaining sufficient lighting for the common areas.


            B. Installing and/or adequately maintaining a fence around the perimeter of the community and/or going to gated access and/or closed circuit television (CCTV) systems.


            C. Hiring an off duty police officer to patrol the area two or three evenings a week or at

            times where criminal activity is likely to take place.


D. Putting up “No Trespassing” signs noting that the property access is limited to residents and their guests and further noting that violators will be prosecuted.


E. Using banning letters for outsiders who commit criminal acts on the property. “Banning letters” are letters sent the by Association to an outsider who has committed criminal acts within the community. The letter provides a warning and notice to the individual that he or she is not welcome on the Association’s property (he or she is banned) and that any attempt to enter the property will be considered a trespass and will be prosecuted accordingly. A copy of the letter should be sent to the local police department.


F. Joining the local police community relations outreach group and appointing a liaison to attend meetings and coordinate a police presence in the community.


G. Requesting that residents participate in a Neighborhood Crime Watch.



            These are all effective and most are economical actions that will assist in solving the crime problems, protecting the residents and shielding the Board from liability.



2. Meet with local law enforcement officials


            Every County has a Police Community Relations Council, which is a voluntary independent advisory body whose membership includes business and community representatives as well as private citizens. The Police Community Relations Council serves as a liaison between the police and the community and is a means by which the citizens have a personal contact with the Police Department. The council meets regularly with police officials to discuss problems of mutual concern, develop programs to reduce crime, improve personal and property security, and improve the police-community partnership necessary to reduce crime and its effects.


            We recommend that the Board appoint a liaison from the community to attend these meetings on a regular basis and coordinate between the Board and the police.


3. Organize a community crime watch


            Community Crime Watch programs are designed to enhance neighborhood security, heighten the community’s power of observation, and to encourage mutual assistance and concern among neighbors. In the past, Community Crime Watch programs have proven very successful. To organize a Community Crime Watch, contact your County Police Department's Crime Prevention Unit.


            While the work needed to implement the suggestions described above may seem onerous, they are insignificant compared to the costs of failing to have a viable and effective security program. We hope the above information is helpful and that you are able to implement some of these suggestions in order to protect yourselves and the residents of your community. This will result in enhancement of the property values and will assist in avoiding liability in the future.






Living in close proximity, neighbors often have disputes over noise and other nuisance issues, property boundaries, fences, trees and even trash. We have noticed a significant increase in disputes between neighbors who reside within common interest ownership communities and we believe it is an issue that merits attention. Because legal action can be expensive and time-consuming, we are recommending that all communities dealing with neighbor disputes suggest to their members that mediation should be their first step when disputes develop. Many of the County State’s Attorneys’ Offices have neighborhood dispute settlement divisions.


Mediation is a process in which a trained neutral person, a "mediator," helps people in a dispute to communicate with one another, to understand each other, and if possible, to reach agreements that satisfy everyone's needs. Mediators are not necessarily lawyers, but most have undergone extensive training in alternative dispute resolution. Unlike a court judge or an arbitrator, a mediator has no power to impose a solution or require any action. Once an agreement is reached, the mediator should put it in writing, but it is up to each individual to abide by the resolution. Mediation is a voluntary process and all parties involved in the dispute must agree to it. It is important to note, however, that parties do not give up their legal rights by agreeing to go to mediation. If an agreement is not reached or if the agreement is breached, the parties can still go to court.


While mediation is a beneficial alternative to litigation, we do not recommend it in situations where physical violence has occurred. In these situations, the police should be contacted immediately and the individuals should seek Peace Orders in their County’s District Court.


            For more information on mediation, you may wish to contact the Mediation and Conflict Resolution Office (MACRO) at 410-841-2260. The Maryland Association for Community Mediation Centers can also assist in obtaining mediation services through your local community mediation center. For more information contact MACMC at 410-349-0080 or visit its web site at: http://www.marylandmediation.org.




            Natural disasters are powerful reminders of the strength of Mother Nature and the importance of proper planning. No one understands the severe damage that can be caused by a hurricane, fire or flood until it happens. Disaster control planning can save lives and minimize property damage. Planning ahead and planning wisely can minimize the destructive effects of a disaster and can prepare the Association for timely reaction and restoration. Your community association might also want to consider establishing a phone tree or email list to relay important information should disaster strike. In light of the tragedy our country has experienced this year due to Hurricane Katrina and Hurricane Rita, we are recommending that all our communities begin to take steps towards developing disaster preparation plans. In Maryland, disaster preparation includes and is not limited to adequately preparing for snow since snow removal expenses are constant problems for our communities.


            The U.S. Department of Homeland Security suggests various steps to take when preparing for a natural disaster including:


Get a Kit - Get a kit of emergency supplies that will allow you and your communities to survive for at least three days in the event an emergency happens. Go to www.ready.gov and www.redcross.org/preparedness for a complete list of recommended supplies.


Make a Plan - Plan in advance what you and your community will do in an emergency. Go to www.ready.gov and www.redcross.org/preparedness for more information and templates to help get you started.


Be Informed - Learn more about different threats that could affect your community and appropriate responses to them. Go to www.ready.gov and www.redcross.org/preparedness for more information about natural disasters and potential terrorist threats.


Get Involved - After preparing yourself and your communities for possible emergencies, take the next step: get training in first aid and emergency response and get involved in preparing the community at large. Visit www.citizencorps.gov or www.redcross.org/preparedness to find out about training and volunteer opportunities through your local Citizen Corps Council or American Red Cross Chapter. 


            The Community Association Institute (“CAI”) offers three disaster management publications to assist high-density homeowners, their associations and management companies as they prepare for events they hope will never occur. The guidebooks are:


1. Before Disaster Strikes -- Developing an Emergency Procedures Manual. This book covers topics such as developing emergency plans, teams and manuals, how to assess security systems and public relations. The book and a CD, that can be used to download resource materials, are useful for all types of heavily populated properties including industrial, office, retail and medical buildings, as well as high-density residences. Emergencies covered include everything from elevator and medical emergencies, to fires, hurricanes and floods to crime, bombs, and nuclear attacks.


2. Specific to high-density owned housing, Community Association Risk Management -- Evaluating and Managing Risk in Condominiums, Cooperatives, and Planned Communities. This book reveals a five-step decision-making process for risk management, identifying loss exposures; examining alternatives; selecting the best alternatives; implementing those choices; and monitoring risk management for constant improvement. The publication also addresses Internet and terrorism-related risks.


3. Disaster Management for Community Associations is solely directed at condo-style life and describes 16 major perils and the seven essential steps for successful disaster planning -- a disaster master file; emergency supplies; damage prevention; peril occurrence, after the fact issues, post-peril evaluation; and celebration. Special considerations are included by peril and the manual also includes information for management companies.


            To order any of these guidebooks, please visit the CAI bookstore website at: http://www.caisecure.net.


            Also, FEMA may be requiring communities to become responsible for the welfare and safety of its own residents during a disaster.


Part II





            A recent amendment to the Federal Fair Credit Reporting Act (“FCRA” or “Act”) requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide an individual with a free copy of his or her credit report, upon request, once every 12 months. There is only one online source authorized to do this and that is www.annualcreditreport.com. Beware of other sites that may look and sound similar. FCRA also contains provisions to help reduce identity theft, such as the ability for individuals to place alerts on their credit histories if identity theft is suspected, or if deploying overseas in the military, thereby making fraudulent applications for credit more difficult. More information can also be obtained on the Internet. For example, http://www.consumersunion.org has detailed information on this Act.


            Maryland residents have had access to three free credit reports annually for years under state law. With the new Federal law, however, state citizens can now get six (6) free reports per year. To get free reports available under Maryland state law, consumers must call each consumer reporting agency separately to request a copy of their individual credit reports. Contact information for the three main consumer reporting companies are: (1) EQUIFAX at 1-800-685-1111 for Equifax; (2) EXPERIAN at 1-888-397-3742; and (3) TRANS-UNION at 1-800-916-8800.





            Effective October 1, 2005 drivers under the age of eighteen in Maryland are prohibited from using any wireless communication device, including a cell phone, while driving, with the exception of an 911 emergency call.  Violations may result in the suspension of one’s driving privilege for up to 90 days. 


            It is unclear whether Maryland will ever adopt a broader ban on cell phone usage of all drivers, which the District of Columbia has done. Both the House and Senate Committees of the Maryland Legislature have considered such a ban several times over the past years but no such law affecting all drivers has been adopted.


            The best advice for those who talk on their phones while driving is not to try to enter a number to call while you are driving, minimize the time of the call, avoid stressful conversations while on the road, and, if possible, pull over to make or take any calls.






    SB 229 – This bill provided for the formation of a State Task Force on Common Ownership Communities and became effective on June 1, 2005. The Task Force has been selected and is charged with the duty of studying the issues of aging communities, among other things. The Task Force is to elect a chair from among its members. The Department of Housing and Community Development is set to provide staff to advise and assist the Task Force. Members are prohibited from receiving compensation but may be reimbursed for specified expenses. The Task Force must submit a report by December 1, 2006. For this reason, it is doubtful that much, if any, legislation affecting common interest communities will be introduced or passed during the 2006 Maryland Legislative Session.


            The first meeting of the Task Force on Common Ownership Communities is set for November 30, 2005 from 4:00 to 7:00 p.m. in Crownsville, Maryland. Further information is available at www.dhcd.state.md.us. Check the site in the upper-right hand corner under the “what’s new” heading. All persons interested in common ownership community issues are encouraged to attend the meetings which are open to the public and to submit written testimony to the members through the Task Force Chair.





            SB 735 – State Task Force – Visual Aids/Smoke Alarms – became effective October 1, 2005. This law established a Task Force to study Visual Smoke and Evacuation Alarms for the Deaf and Hard of Hearing. The law also provides for the membership, designation of a chair, and staffing of the Task Force. It prohibits a member of the Task Force from receiving compensation but authorizes reimbursement for specified expenses. The bill requires the Task Force to conduct a specified study and report its findings to the Governor and General Assembly by September 30, 2006. This issue evokes strong feelings on the part of the deaf and hard of hearing and those desiring to protect the rights of the handicapped. A problem for common ownership associations may be a requirement for retro-fitting units at the Associations’ expense.




            SB 761 – Foreclosure – Notice. This bill was passed as emergency legislation and has been signed into law by the governor. It applies to foreclosure consultants, foreclosure purchasers, and foreclosure surplus purchasers. It prohibits specified practices and specifies the form and contents to be used for specific contracts and documents. This law also provides that a homeowner has the right to rescind specified contracts and documents within a specified time and provides penalties for violations of the Act. Additionally, the bill requires a written notice of intent to docket a foreclosure sale to be sent to the homeowner within not less than 2 days after the foreclosure complaint is docketed.





            SB 282 – Electronic Payments – became effective on October 1, 2005. This law authorizes a homeowners association to charge a person an electronic payment fee if the person elects to pay the homeowners association with a credit card or debit card. The bill also limits the electronic payment fee to a specified amount and requires a homeowners association to provide notice that an electronic payment fee will be charged.




            The filing of paper pleadings with the court imposes significant burdens on the court's personnel and facilities. Legal firms and their clients also incur costs for the delivery and processing of these documents. The filing, tracking, and processing of these pleadings creates inefficiency and higher costs throughout the system. In an effort to address the expanding needs of a globally dispersed legal community, increased processing costs, and reduce paper document tracking and storage, many courts have turned to electronic filing. E-filing is a computer based filing system that allows lawyers to file electronically, create case dockets electronically, allow courts to post orders and schedule hearings, and do many other tasks. They increase the efficiency of case management at the courthouse and reduce the keyboarding that has to be done by the clerk’s office. It has the potential to provide substantial savings to attorneys, their clients and the Court while improving accuracy and access to Court records.

Circuit courts throughout Maryland including Prince George’s, Montgomery County and Baltimore City are working with E-filing case management systems. The electronic systems used in these three circuit courts offer some version of public access to the normally public paper court records. In Baltimore, a computer at the courthouse is available to anyone who wants to explore the asbestos cases. In Montgomery County and Prince George’s, any publisher can subscribe to dial-up systems that allow access from any remote computer cleared through the subscriber system. Additionally, E-filing is used in all matters filed in Maryland Federal courts including Bankruptcy court.

In an effort to provide quality but affordable legal services to our clients, our office uses E-filing whenever that option is available.





Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain. In Maryland many people have reported that unauthorized persons have taken funds out of their bank or financial accounts, or, in the worst cases, taken over their identities altogether, running up vast debts and committing crimes while using the victims’ names. In many cases, a victim's losses may include not only out-of-pocket financial losses, but also substantial additional financial costs associated with trying to restore his or her reputation in the community and correcting erroneous information for which the criminal is responsible.


To reduce or minimize the risk of becoming a victim of identity theft or fraud, there are some basic steps you can take:


          Be careful about giving out your personal information to others unless you have a reason to trust them, regardless of where you are.

          Check your financial information regularly, and look for what should be there and what shouldn't be.

          Ask periodically for a copy of your credit report. (See above discussion about access to credit reports).

          Maintain careful records of your banking and financial accounts.


If you think you've become a victim of identity theft or fraud, act immediately to

minimize the damage to your personal funds and financial accounts, as well as your reputation. Under the “Identity Theft and Assumption Deterrence Act”, the Federal Trade Commission is responsible for receiving and processing complaints from people who believe they may be victims of identity theft, providing informational materials to those people, and referring those complaints to appropriate entities, including the major credit reporting agencies and law enforcement agencies. You can also call your local office of the FBI or the U.S. Secret Service to report crimes relating to identity theft and fraud.



Part III




            A lawsuit over water penetration and mold problems has been filed against Scarlett Place Residential Condominium, Inc., a Baltimore condominium. The suit seeks $500,000.00 in damages and alleges that the Condominium’s management company, did not follow through on a promise to make necessary repairs after entering into a multimillion-dollar settlement with the building’s architect’s and developer. The suit was brought by several individual unit owners who allege that they cannot move forward with their plans to renovate apartments due to the continued danger of water and moisture penetration which has caused damage to units including staining walls, ceilings and floors and creating toxic mold. Furthermore, the plaintiffs claim that Scarlett’s Place Residential’s management has been aware of the problems caused by the water damage since at least 1993 but they have failed to take action to correct the problems.


            In a second suit, a party-planning company, “Park Trust Holdings LLC” has filed a suit against Belvedere Condominium Council of Unit Owners (Baltimore) alleging leaks occurred from sewage in 2002 and 2003. Since the initial filing, several unit owners have also come forward to complain of flooding and mold-related problems inside their units. The Belvedere, a 101-year old hotel was converted to a condominium in 1991. One unit owner alleges that she is unable to stay inside her unit for more than ten (10) minutes due to the alleged presence of mold.

            The president of the Belvedere Condominium has responded by stating that extensive renovations are currently underway. However, he denied that the council, which maintains the building, is responsible for making the unit owners whole in these cases, saying he is aware only of problems caused by one unit owner’s dishwasher. According to Louis J. Kozlakowski an attorney with Wright, Constable & Skeen, most Belvedere unit owners have not filed suit because the condominium bylaws require the parties to arbitrate all disputes. “Arbitration is as expensive, if not more, than litigation,” he explained, suggesting arbitrators charge between $1,500 and $2,000 a day.

            We will keep you apprized of the outcome of each of these cases when they become available.



Part IV




      ✦ Kathleen M. Elmore, along with Baltimore attorney, Sherri R. Heyman, taught a very well attended seminar in September of this year for Half Moon LLC, entitled Maryland Condominium Law 2005. Ms. Heyman lectured on “Creating Condominiums Under Maryland Law” and Ms. Elmore lectured on “Operation of Condominiums” including but not limited to topics involving resale disclosures, document drafting, rules and covenants enforcement, alternate dispute resolution, meeting and voting issues, Board of Director powers and collection of assessments.


            ✦ Approximately 35 people attended a program entitled "Representing Common Ownership Communities in Maryland" presented by MICPEL (the "Maryland Institute for Professional Education for Lawyers") on November 3, 2005. Faculty speakers included Kathleen M. Elmore, who discussed Insurance and Tax Issues in community associations, and Tamara A. Stoner who discussed "Collection - Funding your Community Needs". This is the 3rd time Mrs. Elmore and Ms. Stoner have taught the MICPEL program.


            ✦ Attorneys Kathleen M. Elmore, Ellen W. Throop, Tamara A. Stoner and Maricruz Bonfante attended the Mid-Year Meeting & Rita C. Davidson Award Dinner held on November 18, 2005 by the Maryland Women's Bar Association ("WBA") in Baltimore. The Rita C. Davidson Award was presented to the Honorable Sandra Day O'Connor, the first woman to serve on the United States Supreme Court. Justice O’Connor was one of five women who attended law school at Stanford University in the early 1950's. She graduated third in her law class of 102 and was editor of the Stanford Law Review. Despite these academic achievements, she recounted the difficulty of finding a job as a "woman attorney" and how she had to resort to "creativity" in trying to seek employment to support her husband who was one year behind her in law school. In 1981, President Ronald Reagan nominated her as an Associate Justice to the United States Supreme Court and she took the oath of office on September 25, 1981. Justice O'Connor has submitted her resignation to President George W. Bush in early 2005 and joked about this being the "longest running retirement term" in history.


            ✦ Congratulations to Maricruz Bonfante who was married in September 2005 to James Slade. Ms. Bonfante intends to keep her maiden name for professional purposes. The wedding took place as the sun was setting over the Ladew Topiary Gardens in Monkton, Maryland. Jim is also an attorney servicing the legal needs for the State in the Centers for Medicare and Medicaid Services. Best wishes to the happy couple!


            ✦ All Elmore & Throop, P.C. attorneys will be attending the Community Associations Institute’s annual Law Seminar in Las Vegas, Nevada in January 2006 to make sure we are on the cutting edge of Association law.




            We trust that you have found our second installment of “Letter of Law” useful and informative and we hope to provide these letters on a regular basis as a courtesy to our clients. Your comment is welcomed. Please note that the information provided herein is general in nature. For specific questions relating to your association or circumstances, please call (410) 544-6644.


            Happy Holidays and be sure to visit our website at www.elmore-throop.com.


                                                                        Very truly yours,

                                                                        ELMORE & THROOP, P.C.



                                                                        Kathleen M. Elmore, Managing Partner