Workgroup to Study Extreme Risk Protective Orders (Sagar Ghimire Act)
Summary
HB1541 creates a new requirement for most condominium unit owners in Maryland to maintain a condominium unit owner insurance policy, or a substantially similar property insurance policy, for their unit. The bill applies only to condominiums made up entirely of residential units and excludes detached-unit condominiums. It specifies minimum coverage features that the policy must include, such as a waiver of subrogation against the council of unit owners and its insurance, coverage for the council’s deductible or part of it, personal property coverage, loss-of-use coverage for at least 12 months, personal liability coverage of at least $500,000, loss assessment coverage of at least $25,000, and dwelling/building coverage meeting a minimum threshold tied to the cost of repairs or replacements for certain improvements and upgrades.
The bill also allows condominium bylaws to require even higher coverage amounts than the statewide minimums. Unit owners must provide proof of insurance annually and whenever the council requests it. If an owner fails to maintain the required coverage, the council of unit owners may obtain insurance on the owner’s behalf and charge the premium back as an assessment. In that situation, the insurer must pay directly to the council the portion of the deductible for which the unit owner is responsible under existing condominium law.
The bill’s impact is to add a new section to the Real Property Article governing condominium insurance obligations and enforcement. It shifts some risk-management responsibility from condominium associations to individual unit owners, while also giving councils a backstop mechanism to protect the condominium if an owner is uninsured. It interacts with existing condominium insurance and deductible rules under § 11-114 and expands the statutory framework for residential condominium governance and insurance compliance.
Overall sentiment appears generally favorable, as reflected by the committee report and the House’s adoption of the bill with floor amendments, followed by passage on third reading by a substantial margin. The available record does not include committee testimony, so specific arguments are not documented here, but the vote suggests broad support for the policy. Any contention likely centered on the cost and burden of mandatory insurance for unit owners versus the benefit of ensuring adequate coverage and protecting the condominium community from uninsured losses.
Impact
Adds a new mandatory insurance requirement in the Maryland Real Property Article for residential condominium unit owners, establishes minimum policy terms and coverage amounts, authorizes condominium bylaws to require higher limits, and permits councils of unit owners to purchase insurance and assess the cost to noncompliant owners. It also reinforces existing deductible allocation rules and creates a statutory enforcement mechanism for condominium associations.
Sentiment
The bill appears to have been received positively overall. It received a favorable committee report with amendments, was adopted on the House floor with amendments, and passed third reading by a wide margin (105 yeas to 33 nays). The available materials do not show organized opposition testimony, but the recorded vote indicates substantial support despite some dissent.
Contention
The main policy tension is between consumer cost and condominium risk management. Supporters would likely favor requiring minimum insurance to protect owners and councils from uninsured losses, while critics may object to the added expense, the breadth of required coverage, or the authority given to councils to buy insurance and assess the premium back to owners. Another possible point of contention is the waiver of subrogation and the required deductible coverage, which may affect policy pricing and claims handling.