Condominiums - Property Insurance Deductibles - Unit Owner Responsibility
Summary
SB 332 would change Maryland condominium law to increase the maximum property insurance deductible that can be charged to a unit owner when damage or destruction in the condominium originates from that owner’s unit. Under current law, that owner may be responsible for up to $10,000 of the council of unit owners’ property insurance deductible; the bill raises that cap to $25,000. The bill keeps the existing rule that if damage originates from the common elements or from outside the condominium, the deductible is treated as a common expense shared by the unit owners.
The bill also requires condominium resale contracts to include a written notice explaining a unit owner’s responsibility for the deductible, including when the damage originates from a unit. This notice requirement applies both to standard condominium resales and to resales in smaller condominiums with fewer than seven units. The bill takes effect October 1, 2026, and would amend provisions in the Real Property Article governing condominium insurance, repair obligations, and resale disclosures.
Impact
SB 332 would amend §§ 11-114 and 11-135 of the Real Property Article to expand the financial exposure of a unit owner whose unit is the source of damage in a condominium. It shifts more of the insurance deductible burden from the condominium association to the responsible unit owner, up to $25,000, while leaving the excess deductible as a common expense. It also adds or clarifies disclosure obligations in resale transactions so purchasers are informed of this potential liability before closing.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, support, or opposition in the available materials. Based on the bill text alone, the measure appears to be a targeted insurance and disclosure bill focused on clarifying responsibility for deductible costs in condominium settings. The absence of recorded committee action in the provided context means the overall sentiment cannot be reliably assessed from the available record.
Contention
The main point of contention is likely the size of the deductible cap assigned to the unit owner when damage originates from a unit. Raising the cap from $10,000 to $25,000 increases the potential out-of-pocket cost for the responsible owner and may be viewed by condominium owners as a significant financial burden, while associations may view it as a fairer allocation of risk. A second likely issue is the resale disclosure requirement, which places an added notice obligation on sellers but is intended to ensure purchasers understand the deductible exposure before buying.