Elvaton Towne Condominium Regime II, Inc. v. Rose ( 2017 )

Elvaton Towne Condominium Regime II, Inc., et al. v. William Kevin Rose, et ux., No. 33,
September Term, 2016
CONDOMINIUMS — GENERAL COMMON ELEMENTS — TAKINGS — While
the Maryland Condominium Act does not preclude “suspension-of-privileges” methods as
a means of enforcing collection of delinquent fees, such means must have been agreed to
by the unit owners and incorporated into the Declaration. Where this means of collection
is established by a rule, enacted by only a majority of the condominium association’s
governing council or board of directors rather than through an amendment to the
Declaration, it is invalid as an interference in property rights beyond the power of the
condominium’s governing body to impose.
DECLARATORY JUDGMENT — IDENTICAL ISSUES PENDING IN ANOTHER
TRIBUNAL — Maryland courts will not ordinarily grant declaratory judgment where a
proceeding involving identical issues is already pending in another tribunal. In such a case,
it is neither useful nor proper to issue declaratory relief, unless very unusual and compelling
circumstances exist to do so.
Circuit Court for Anne Arundel County
Case No. 02-C-12-171433
Argued: January 5, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 33
September Term, 2016
______________________________________
ELVATON TOWNE CONDOMINIUM
REGIME II, INC., ET AL.
v.
WILLIAM KEVIN ROSE, ET UX.
______________________________________
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Hotten
Getty,
JJ.
______________________________________
Opinion by Barbera, C.J.
______________________________________
Filed: June 23, 2017
The principal issue for consideration in the present case is the extent to which, and
upon what authority, a condominium association may impose restrictions on a unit owner’s
right of access to communally-held property. The parties are Petitioners/Cross-
Respondents Elvaton Towne Condominiums in Glen Burnie, its condominium association,
and its management firm (collectively, “Elvaton”) and Respondents/Cross-Petitioners
William and Dawn Rose (“the Roses”).
Elvaton’s parking areas and the pool are general common elements, which,
according to ¶ 7(C) of Elvaton’s governing declaration, “shall be exclusively owned in
common by all of the Unit Owners.” Under the Maryland Condominium Act, Md. Code
Ann., Real Prop. §§ 11-101(c), 11-107, a “general common element” is one over which
every unit owner enjoys ownership rights. Unit owners are assessed an annual
condominium fee, to be paid on a monthly basis, to cover, among other things, the
maintenance of the common elements of the property, which include the parking lot and
pool. As a means of enforcing collection of such debts, Elvaton’s governing Board of
Directors passed a “suspension-of-privileges” rule that prohibits unit owners who are
delinquent in their payment of condominium fees from parking overnight within the
complex and from using the pool, until such time as the delinquency is cured.
The dispute at issue here has its genesis in Elvaton’s claim that the Roses were
delinquent in paying their condominium fees. In addition to recording a statement of lien
against the Roses’ condominium unit and filing suit in the District Court sitting in Anne
Arundel County to recover the alleged debt, Elvaton notified the Roses that, pursuant to
the “suspension-of-privileges” rule, they were prohibited from parking in the parking lot
overnight or using the pool until such time as they paid their allegedly delinquent
condominium fees. During the pendency of the District Court action, the Roses filed in
the Circuit Court for Anne Arundel County a complaint seeking, among other relief, a
declaratory judgment that (1) Elvaton did not possess the authority to prohibit them, on the
basis of an alleged delinquency, from using the common elements of the Elvaton complex;
and (2) the Roses did not owe a debt to Elvaton. The Roses also obtained a stay of the
District Court proceedings during the pendency of the case in the circuit court.
Before trial, the circuit court ruled in favor of Elvaton that the Roses were not
entitled to have the court issue a declaratory judgment on the validity of the alleged debt
given that the issue was pending review in the District Court. Later, following a trial on
the merits of the remaining counts of the Roses’ complaint, the circuit court found in favor
of the Roses on the validity of the rule. The court explained that Elvaton did not have the
authority to restrict the Roses’ use of the parking lots and the pool as a means of collecting
on the debt, because Elvaton was not authorized by the condominium’s governing
documents to do so for the alleged failure to pay association assessments. Both Elvaton
and the Roses appealed their respective adverse judgments, and the Court of Special
Appeals affirmed both judgments of the circuit court. Elvaton Towne Condo. Regime II,
Inc. v. Rose, No. 1033, Sept. Term, 2014, slip op. at 25, 32-33 (Md. Ct. Spec. App. filed
Apr. 21, 2016). Both parties sought, and we granted, further review in this Court.
For the reasons that follow, we conclude that the Maryland Condominium Act, Md.
2
Code Ann., Real Property § 11-101 et seq. (1982, 2015 Repl. Vol.)1 allows access to
communally-held property, that is, the “general common elements” of the condominium,
to be restricted as a means to enforce payment of condominium fees. Such restrictions,
however, must first be authorized by the unit owners through agreement in the
condominium’s declaration. In the present case, Elvaton did not include such a restriction
in its declaration. We therefore affirm the judgment of the Court of Special Appeals that
came to the same conclusion. We likewise affirm the Court of Special Appeals’ judgment
that the Roses were not entitled to have the validity of the debt resolved in the circuit court,
given its pendency in the District Court.
I
Condominium Law, in a Nutshell
“A condominium is a ‘communal form of estate in property consisting of
individually owned units which are supported by collectively held facilities and areas.’”
Ridgely Condo. Ass’n v. Smyrnioudis, 343 Md. 357, 358 (1996) (quoting Andrews v. City
of Greenbelt, 293 Md. 69, 71 (1982)). Owning property in common offers certain benefits
to condominium owners, such as affordability and shared costs of property management,
and in exchange condominium owners “agree to be bound by rules governing the
administration, maintenance, and use of the property.” Id. at 359 (footnote omitted). We
have recognized that,
inherent in the condominium concept is the principle that to promote the
health, happiness, and peace of mind of the majority of the unit owners since
they are living in such close proximity and using facilities in common, each
1
Unless otherwise noted, all further statutory references are to the Real Property Article.
3
unit owner must give up a certain degree of freedom of choice which he
might otherwise enjoy in separate, privately owned property. Condominium
unit owners comprise a little democratic sub society of necessity more
restrictive as it pertains to use of condominium property than may be existent
outside the condominium organization.
Id. at 359 (quoting Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180, 181-82 (Fla.
Dist. Ct. App. 1975)).
The Maryland Condominium Act (hereinafter, the “Act”) “regulates the formation,
management, and termination of condominiums in Maryland.” Jurgensen v. New Phoenix
Atlantic Condo. Council of Unit Owners, 380 Md. 106, 115 (2004). Under the Act, a
condominium is established by recording a declaration, bylaws, and condominium plat
among the land records of the county in which the property is located. § 11-102(a)(1).
The declaration, among other provisions, names the condominium, defines the
common elements of the condominium, and assigns the percentage interests in the common
elements appurtenant to each unit and the number of votes appurtenant to each unit at any
council of unit owners. § 11-103. Declarations may be amended only by the written
consent of eighty percent of the unit owners listed on the current roster. § 11-103(c)(1).
The percentage interest in common elements appurtenant to each unit, however, “shall have
a permanent character and . . . may not be changed without the written consent of all of the
unit owners and their mortgagees.” § 11-107(c) (emphasis added).
The Act further provides for the enactment of bylaws, which address the
foundational aspects of the community’s general management and operations. § 11-104(a)
(“The administration of every condominium shall be governed by bylaws which shall be
recorded with the declaration.”). The bylaws describe the council of unit owners—the
4
governing body of a condominium—and its authority and the extent to which it may
delegate its tasks to a board of directors or managers. § 11-104(b)(1). The bylaws also
establish the method of voting by unit owners, including matters such as quorum and the
method of calling for a gathering of unit owners. § 11-104(b)(3).
Of particular relevance here, the bylaws describe the “manner of assessing against
and collecting from unit owners their respective shares of the common expenses” and “also
may contain any other provision regarding the management and operation of the
condominium including any restriction on or requirement respecting the use and
maintenance of the units and the common elements.” § 11-104(b)(4), (c). The fundamental
governance agreements established in the bylaws may be modified, but only by a minimum
two-thirds vote of the unit owners. § 11-104(e)(2).2
Condominiums also may “adopt and amend reasonable rules and regulations,”
consistent with the two foundational governing documents described above, that address
less fundamental administrative needs of the community. §§ 11-109(d)(2), 11-111. Such
rules are passed or amended, after notice and the opportunity for public comment, by
simple majority vote of the council of unit owners or its delegated management entity. §
11-111(a)(1). Rules “generally deal with the use and occupancy by owners of units and
common areas, patios and other exterior areas, parking, trash disposal, pets, etc. They
2
The General Assembly recently enacted language that will alter this provision. Effective
October 1, 2017, “the council of unit owners may amend the bylaws by the affirmative vote
of unit owners in good standing having at least 60% of the votes in the council, or by a
lower percentage if required in the bylaws.” 2017 Maryland Laws Ch. 480. We
acknowledge the pending changes to the statute but judge this case on the law extant at the
time of the dispute.
5
frequently prohibit conduct that could constitute a nuisance.” Dulaney Towers
Maintenance Corp. v. O’Brey, 46 Md. App. 464, 466 (1980).
The Act clarifies the superiority of the declaration over the plat, bylaws, and any
rules or regulations. Section 11-124(e) provides: “If there is any conflict among the
provisions of this title, the declaration, condominium plat, bylaws, or rules adopted
pursuant to § 11-111 of this title, the provisions of each shall control in the succession
listed hereinbefore.”
“A condominium owner . . . holds a hybrid property interest consisting of an
exclusive ownership of a particular unit or apartment and a tenancy in common with the
other co-owners in the common elements.” Ridgely, 343 Md. at 358-59; § 11-107(a); see
also Andrews, 293 Md. 69, 73-74. The “common elements” of condominium property, as
well as its subsets, are defined in § 11-101(c) of the Act:
(1) “Common elements” means all of the condominium except the units.
(2) “Limited common elements” means those common elements identified
in the declaration or on the condominium plat as reserved for the exclusive
use of one or more but less than all of the unit owners.
(3) “General common elements” means all the common elements except the
limited common elements.
Section 11-107(a) provides for communal ownership of common elements:
Each unit owner shall own an undivided percentage interest in the common
elements equal to that set forth in the declaration. Except as specifically
provided in this title, the common elements shall remain undivided.
Section 11-107(c) describes the nature of percentage interests in the common elements as
follows:
The percentage interest provided in subsections (a) and (b) of this section
may be identical or may vary. The percentage interests shall have a
6
permanent character and, except as specifically provided by this title, may
not be changed without the written consent of all of the unit owners and their
mortgagees. Any change shall be evidenced by an amendment to the
declaration, recorded among the appropriate land records. The percentage
interests may not be separated from the unit to which they appertain. Any
instrument, matter, circumstance, action, occurrence, or proceeding in any
manner affecting a unit also shall affect, in like manner, the percentage
interests appurtenant to the unit.
Section 11-108(a) in turn provides:
Subject to the provisions of subsection (c) of this section, the common
elements may be used only for the purposes for which they were intended
and, except as provided in the declaration, the common elements shall be
subject to mutual rights of support, access, use, and enjoyment by all unit
owners.
(Emphasis added).
II
Elvaton’s Condominium Documents
The “Declaration for Elvaton Towne Condominiums, Regime Two” (the
“Declaration”) was executed on May 27, 1975.3 Paragraph 13 of the Declaration makes
each unit owner a voting member of the Council of Unit Owners, but Article V, §§ 2-3 of
the Elvaton Towne Condominiums, Regime Two By-Laws (the “By-Laws”) delegates
authority to a Board of Directors, tasking it with the general administration of the
condominium, including, pertinent here, the promulgation of rules and regulations
respecting the use of common elements.
The Declaration provides that “all streets, curbs, sidewalks, . . . and parking areas,”
3
By all indications, the Declaration at issue in this litigation is that which was recorded in
1975.
7
are among the general common elements as to which each unit owner has a fractional
ownership interest. ¶ 7(A). The Declaration at ¶ 7(B) further provides that there are “no
limited common elements within the Regime created herein”; making clear that all
common elements are “general common elements,” as defined in § 11-101(c)(3). In
addition, the developer stated at ¶ 15 of the Declaration that “[i]t is the intention of
Developer that each Unit Owner . . . shall have the right to use all of the recreational
facilities for so long as same, including swimming pool and bath house, shall exist . . . .
This right shall be a right appurtenant to each condominium unit.”
Paragraph 7(C) of the Declaration provides that “[t]he common elements shall be
exclusively owned in common by all of the Unit Owners.” Paragraph 7(F) further provides:
Each Unit Owner, in proportion to his Percentage Interest, shall contribute
toward payment of the Common Expenses, and no Unit Owner shall be
exempt from contributing toward said Common Expenses either by waiver
of the use or enjoyment of the common elements, or any of them, or by the
abandonment of his unit. The contribution of each Unit Owner toward
Common Expenses shall be determined, levied and assessed as a lien, all in
the manner set forth in the By-Laws which are being recorded among the
Land Records of Anne Arundel County simultaneously herewith.
The Elvaton By-Laws were executed the same day as the Declaration. Relevant
here are Article V – Directors, Article IX – Condominium Fees/Assessments, and Article
X – Use Restrictions.
Section 3 of Article V is entitled Powers and Duties and provides in pertinent part
that the “Board of Directors shall have all the powers and duties necessary for the
administration of the affairs of the Condominium,” which include, among others, the power
and duty,
8
(b) to establish and provide for the collection of assessments from the Unit
Owners and for the assessment and/or enforcement of liens therefor in a
manner consistent with the law and the provisions of these By-Laws and the
Declaration[.]
....
(d) to promulgate and enforce such rules and regulations, and such
restrictions on, or requirements, as may be deemed proper respecting the use,
occupancy and maintenance of the project, and the use of the general and
limited common elements, as are designated, to prevent unreasonable
interference with the use and occupancy of the Condominium and of the
general and limited common elements by the Unit Owners, all of which shall
be consistent with laws and the provisions of these By-Laws and the
Declaration.
Section 1 of Article IX is entitled Annual Condominium Fees/Assessments and provides
in pertinent part:
(a) Each Unit Owner shall pay to the Council, monthly, a sum equal to one-
twelfth (1/12) of the Unit Owner’s proportionate share of the sum required
by the Council pursuant to the Percentage Interests in Common Expenses
and Common Profits . . . to meet its annual expenses[.]
Section 4 of Article IX, entitled Non-Payment of Assessment, provides in pertinent part:
(a) A Unit Owner shall be liable for all assessments, or installments thereof,
coming due while he is the owner of a unit . . . .
(b) All assessments, until paid, together with interest on them and actual cost
of collection, constitute a lien on the units on which they are assessed, if a
statement of lien is recorded within two years after the date the assessment
becomes due. . . .
(c) Any assessment, or installment thereof, not paid when due shall bear
interest, from the date when due until paid at the rate not exceeding the
maximum permissible legal rate per annum.
Section 7 of Article IX, entitled Enforcement, provides:
The lien may be enforced and foreclosed by the Council of Unit Owners, or
any other person specified in the By-Laws, in the same manner, and subject
to the same requirements, as the foreclosure of mortgages or deed of trusts
on real property in the state containing a power of sale, or an assent to a
decree.
9
Article X, entitled Use Restrictions, at § 3, “Prohibited Uses and Nuisances,” provides:
(b) There shall be no obstruction of any general common elements, except
as herein provided. Nothing shall be stored upon any general common
elements, except as herein provided, without the approval of the Board of
Directors. Vehicular parking upon general common elements may be
regulated by the Board of Directors[.]
....
(r) There shall be no violation of any rules for the use of the general or
limited common elements which may from time to time be adopted by the
Board of Directors and promulgated among the Unit Owners by said Board
in writing; and the Board of Directors is hereby, and elsewhere in these By-
Laws, authorized to adopt such rules.
Article XV, entitled Amendment, provides:
These By-Laws may be amended by the affirmative vote of Unit Owners
representing 75% of the total votes of the Condominium Regime, as then
constituted, at any meeting of the Unit Owners duly called for such purpose
in accordance with the provisions of the Real Property Article, Section 11-
104 of the Annotated Code of Maryland[.]
III
The Litigation
We noted at the outset that Elvaton, proceeding on the basis that the Roses were
delinquent in payment of their condominium fees, recorded a Statement of Lien against the
Roses’ unit and filed suit against them in the District Court, seeking payment of the
allegedly delinquent fees.4 In addition, Elvaton notified the Roses that, pursuant to the
“suspension-of-privileges” rule (hereinafter, the “Rule”) promulgated by the Board of
4
The record reflects that Elvaton filed a supplement to the debt collection suit on July 10,
2012. Elvaton asserted, as it had done in the original suit, that the Roses had been
delinquent in their assessments since September 2010 and that their balance owed was
$2,619.69, plus $140.73 in interest, $608.50 in attorney’s fees, and a trial attendance fee to
be determined.
10
Directors, the Roses were prohibited from parking overnight in the condominium parking
area. The Rule promulgated by Elvaton provided that,
the right to park within the Council’s Property shall automatically be
suspended for any unit owner . . . that is more than forty-five (45) days past
due in the payment of condominium assessments and other charges for a
condominium unit in the community. The suspension of the parking permit
shall remain in effect until the unit’s account is brought current.
Elvaton further notified the Roses that, pursuant to a rule that apparently had existed for
many years, they were likewise precluded from using the condominium “community” pool
during the summers of 2012 and 2013.
The Roses responded to Elvaton’s action in the District Court by filing a six-count
complaint in the Circuit Court for Anne Arundel County against Elvaton, its management
company (Wentworth Property Management, LLC), and Elvaton’s debt collection
attorney, John Oliveri, and his firm, Oliveri & Associates, LLC. In this appeal, we are
concerned only with Count One.5
Count One was an action for declaratory judgment, in which the Roses requested
the court to make four declarations:
5
The Roses voluntarily dismissed Count II, which alleged defamation by Elvaton and the
debt collection attorney, John Oliveri. Count III alleged violations of the federal Fair Debt
Collection Practices Act against Mr. Oliveri and his firm. Count III was dismissed with
prejudice on July 17, 2013, when Mr. Oliveri and his firm were dismissed from the case as
defendants. Count IV alleged violations of the Maryland Consumer Debt Collection Act
against Mr. Oliveri, his firm, and Elvaton, and Count V alleged that the same parties also
violated the Maryland Consumer Protection Act through their violations of the Maryland
Consumer Debt Collection Act. Count VI, “Respondeat Superior,” alleged violation of the
same statutes as addressed in Counts II, III, IV, and V, but with Elvaton alone named as
the defendant.
Following a hearing on the merits of the remaining claims, the circuit court issued
a memorandum opinion and order, ruling in favor of Elvaton on all those claims.
11
(1) that this Court determine and adjudicate the property rights of the Roses
and all Unit Owners as to the unhindered use of general common areas
including parking areas and the community recreational areas; [and]
(2) that this Court determine and adjudicate the rights and liabilities of the
parties with respect to the assessments and other fees allegedly due from the
Roses to Elvaton; and
(3) that this Court determine and adjudicate the rights and liabilities of the
parties with respect to the Statement of Lien; and
(4) that this Court declare the Statement of Lien recorded in the land records
of Anne Arundel County at book 23888 page 0474 to be void ab initio or, in
the alternative, released[.]
In addition to their complaint in circuit court, the Roses filed a request for stay of the
delinquency action in District Court during the pendency of the circuit court proceedings.
That request was granted.
Elvaton filed a motion for summary judgment in the circuit court action. After a
hearing on the motion, the court granted summary judgment in Elvaton’s favor on
Declarations 2, 3, and 4 of Count One, ruling that these issues would be addressed in the
District Court proceeding.
Trial followed on the remaining counts of the Roses’ complaint. It is unnecessary
for present purposes to summarize all the evidence presented. It is enough to note that
Elvaton provided evidence that, at some point before June 1, 2012, the Roses had fallen
behind on their monthly assessments. Mrs. Rose testified that a member of Elvaton’s
Board of Directors gave her a letter informing her that, because Elvaton considered the
Roses to be delinquent on their assessments, effective June 1, 2012, the Roses would be
prohibited from parking in either of their two assigned parking spaces. Mrs. Rose further
12
testified about email reminders to the community, on or about June 4, concerning a “new
towing policy” that would be taking effect that week advising that any resident who is
delinquent on the assessment would be prohibited from parking and, if parked, would be
towed at the unit owner’s expense. The Roses, therefore, parked on a county road outside
the community. Mrs. Rose testified that the Roses were also barred from using the
community pool for the summers of 2012 and 2013.
Following trial, the circuit court issued a Memorandum Opinion and Order detailing
the court’s findings and conclusions. The court found in favor of the Roses on Declaration
1 of Count I. The circuit court applied the Act and Ridgely, supra, in reasoning that
Elvaton’s action was an unauthorized taking of the Roses’ property. The court determined
that, because the Roses own a percentage share of the common elements of the
condominium complex, Elvaton could not deprive the Roses of their property right to those
common elements, even temporarily, without proper authority. The court recognized that
the Act would allow for such debt collection practices had they been authorized by the
Declaration; the Declaration, however, did not authorize that practice. Instead, Elvaton
established that practice through a rule, which, pursuant to the governance structure of the
condominium, is passed by majority vote of the governing Board of Directors. The court
ruled that, given the absence in the Declaration of a provision authorizing Elvaton to
employ such a debt collection practice, Elvaton could not deprive the Roses of their
property interest in the common elements of the condominium complex.
Elvaton appealed the court’s decision on the debt collection practices issue, and the
Roses cross-appealed on their right to seek in the circuit court a declaratory judgment on
13
the alleged debt. The Court of Special Appeals affirmed the circuit court on both claims,
prompting both Elvaton and the Roses to seek further review in this Court. We granted
certiorari to review the parties’ respective claims.6 Elvaton Towne Condo. v. Rose, 449
Md. 409 (2016).
IV
The permissibility of Elvaton’s debt collection practice is a purely legal question,
which we review de novo. “[W]here an order [of the trial court] involves an interpretation
and application of Maryland constitutional, statutory or case law, our Court must determine
whether the trial court’s conclusions are ‘legally correct’ under a de novo standard of
review.” Schisler v. State, 394 Md. 519, 535 (2006) (citation omitted). It is the general
rule, moreover, that “the construction or interpretation of all written instruments is a
question of law for the court.” Olde Severna Park Improvement Ass’n v. Gunby, 402 Md.
317, 329 (2007) (quoting Gordy v. Ocean Park, Inc., 218 Md. 52, 60 (1958)).
Elvaton’s primary argument is that the debt collection practices it instituted through
its “suspension-of-privileges” Rule are not a taking of property because they are not
6
Elvaton presented the following question in its petition:
Whether Maryland law permits, and Elvaton’s Declaration and Bylaws
provide, the authority to implement rules that temporarily suspend unit
owners who are delinquent in their condominium assessments from using the
community parking lot and pool?
The Roses’ cross-petition posed this question:
Did the Court of Special Appeals err by finding that the Roses were
precluded from pursuing a declaratory judgment related to Elvaton’s
Statement of Lien, which established an interest in the Roses’ real property,
and that the Roses’ only procedural remedy was to pursue a defense in a
money damages consumer collection action pending in the District Court?
14
permanent. Elvaton further argues, in the alternative, that the Rule is a reasonable use
restriction authorized by the Declaration and By-Laws. Neither argument carries the day
for Elvaton.
A.
Does application of the Rule constitute an impermissible taking?
The decisions of the circuit court and Court of Special Appeals on this argument
were grounded in the facts of Ridgely. We therefore begin our discussion with a summary
of that case.
Ridgely involved a dispute concerning certain unit owners’ use of the lobby area of
the building, a condominium composed of 232 residential units and seven ground floor
units authorized for use as businesses. Each of the seven units were accessible from both
the lobby and an exterior entrance. Some of those businesses allowed their customers to
enter through the building’s well-appointed lobby, a general common element of the
condominium. 343 Md. at 363. Citing security concerns, the condominium association
amended its bylaws to impose a permanent requirement that customers were to use only
exterior entrances to access the businesses, not the lobby. Id. at 363-64.
Several of the commercial unit owners challenged the validity of this bylaw
amendment as an unauthorized taking of their property. In our review of the relevant law
of a number of our sister states, we noted that the cases “fall generally into two categories,
. . . ‘exclusive use cases’ . . . [and] ‘equality’ cases.” Id. at 367; see also id. at 367-69(collecting cases). We quoted, with apparent approval, a decision of the Supreme Judicial
Court of Maine, Jarvis v. Stage Neck Owners Ass’n, 464 A.2d 952 (Me. 1983), that drew
15
a clear distinction between the two classes of cases:
There is a distinct difference between these cases, in which exclusive use,
control and/or ownership of the common areas is taken from some or all of
the unit owners and cases in which some reasonable restrictions or regulation
of the common areas is imposed on all owners. In the first instance, each
owner’s percentage interest in the common area is altered. In the second
instance, the percentage ownership interest is unaffected.
Id. at 369.
The Ridgely court held that the amendment of the bylaws constituted an
unacceptable revocation of the business owners’ percentage interest in the lobby because,
for instance, the business owners could no longer convey to a subsequent purchaser the
property right for visitors to use the lobby. Id. at 370. We explained that the lobby was
held as a tenancy-in-common by all unit owners together and the right that the bylaws
amendment revoked, that is, “the right to have their clients use the lobby,” id. at 369, was
not “a mere personal privilege,” but rather was appurtenant to the condominium units and
subject to conveyance with the units, id. at 370 (quoting Griffith v. Montgomery Cty., 57
Md. App. 472, 485 (1984)). The Ridgely court reasoned that this right “resembles an
easement, which is an interest in property.” Id. at 369. Revoking this right through the
bylaw amendment “was beyond the power of the [condominium] Association,” and was
therefore invalid. Id. at 371.
Elvaton argues that Ridgely does not control the outcome here because, in that case,
the use restriction imposed was permanent, whereas here the restriction lasts only so long
as the Roses remain delinquent in their fee payments. From that premise, Elvaton argues
that enforcement of the suspension-of-privileges Rule does not constitute an unlawful
16
taking.7 Elvaton argues that the Roses may, for instance, convey the right to park and use
the pool to a subsequent buyer, a right which is accessible immediately upon payment of
the delinquent fees.
We disagree. We explained in Ridgely that many courts discern no cognizable
taking where the rule is of equal application to all unit owners. This is because where a
rule is applied equally—for instance, closing an outdoor swimming pool during the cold
winter months—the rule does not change any of the owners’ relative percentage interest in
the common elements. See id. at 369. Rather, such a rule is considered a reasonable use
restriction. Every unit owners’ use is restricted equally, and no unit owner gains at the
expense of another. Where, however, a rule “disparately affect[s] a portion of unit owners
by revoking a property interest they acquired when they purchased their units, without
affecting the rights of the other unit owners,” such as occurred here, there is a taking. Id.
at 370.
The Roses “own an undivided percentage interest in the common elements” as
provided by both the Declaration and § 11-107(a). The restriction imposed upon them
adversely affected their property interests in two of the common elements of Elvaton that
other residents of Elvaton continued to enjoy: the parking lot and the pool, which
percentage interest, as provided by § 11-107(c), “shall have a permanent character and . . .
may not be changed without the written consent of all of the unit owners and their
7
For purposes of examining Elvaton’s arguments, we phrase the question as if the Roses’
debt is proven, but we note again here that the debt is contested and has not been
established.
17
mortgagees.” Just as the bylaw amendment adversely affected the percentage property
interest the commercial unit owners had in the Ridgely condominium’s lobby, the
“suspension-of-privileges” Rule adversely affected the Roses’ percentage property interest
in access to the parking lot and the pool.
We know, too, that “transfer of an interest that is smaller than an ownership interest
would suffice to alter the percentage interest held by each owner.” Ridgely, 343 Md. at
367 (internal alterations and quotations omitted) (quoting Kaplan v. Boudreaux, 573
N.E.2d 495, 499 (Mass. 1991)). The removal of the Roses’ interest in the common
elements of the parking lot and pool was sufficient to alter the percentage of the
condominium held by them.
We further disagree with Elvaton that the restriction imposed upon the Roses is not
a taking of their property interest in use of the parking lot and pool because the restriction
is lifted once the Roses pay the debt owed. Elvaton points out that, unlike in Ridgely where
the percentage interest in the common elements was altered permanently, here the effect is
temporary—it is a property interference that lasts only until unit owners pay the debt.
Elvaton raises this distinction to argue that, therefore, the condominium association may
do whatever it likes in terms of property interference. But this argument goes too far.
Section 11-107(c) provides that the percentage interest in common elements appurtenant
to each unit “may not be changed without the written consent of all of the unit owners and
their mortgagees.” Elvaton is correct that the Rule here does not impose the sort of
permanent change to percentage interests in a common element for which § 11-107(c)
requires unanimous unit owner and mortgage lender agreement, but it does not follow that
18
any and every rule imposing only temporary effects on access to common elements is
therefore allowable.
Instead, the governing provision here is § 11-108(a). That provision states that the
“common elements may be used only for the purposes for which they were intended and,
except as provided in the declaration, the common elements shall be subject to mutual
rights of support, access, use, and enjoyment by all unit owners.” Thus, the law envisions
that the declaration of a particular community may restrict access, through the agreement
of the unit owners in their declaration, to various common elements.
Assuming that the restriction imposed here was “temporary”, for the reason
asserted by Elvaton, we are not persuaded that the restriction is any less a “taking”. We
have found, for example, temporary takings to be actionable in other contexts, such as
inverse condemnation law. See Reichs Ford Rd. Joint Venture v. State Rds. Comm’n of the
State Highway Admin., 388 Md. 500, 511 (2005) (citing Kimball Laundry Co. v. United
States, 338 U.S. 1, 7 (1949) (discussing proper compensation for temporary takings under
federal law)).
Moreover, and in any event, we agree with the Court of Special Appeals in this case
that “[t]here is no temporary-infringement exception from complying with the collection
procedures in . . . the Act. If there were, a condominium association could collect disputed
debts by ‘temporarily’ blocking a hallway or lobby to prevent a unit owner’s accessing the
unit.” Elvaton Towne Condo. Regime II, Inc. v. Rose, No. 1033, Sept. Term, 2014, slip op.
at 24 (Md. Ct. Spec. App. filed Apr. 21, 2016) (quoting Brief of Consumer Protection
Division of the Office of the Attorney General of Maryland as Amicus supporting the
19
Roses on the suspension-of-privileges issue).
Restricting a condominium unit owner’s access to communally-held property is a
significant infringement of the owner’s property rights—so significant that the General
Assembly found it appropriate to require that such a restriction may be authorized only
through a provision in the declaration, as evinced by the text of § 11-108(a).8 We find it
telling that the General Assembly previously allowed a community’s bylaws to permit such
a taking, but in 1976 revised the statute to permit these takings only through agreement in
a community’s declaration. Compare Maryland Condominium Act, 1974 Md. Laws 2163with Maryland Condominium Act, 1976 Md. Laws 929. Here, as discussed below,
Elvaton’s Declaration does not include authority to restrict access to common elements
temporarily, in order to enforce payment of fees, and Elvaton cannot accomplish this
restriction through a mere rule.
B.
Is the Rule authorized by the Declaration?
Elvaton makes the additional argument that the “suspension-of-privileges” Rule is
authorized by the existing Declaration and By-Laws In support of this argument, Elvaton
asserts that all unit owners have already agreed to allow suspension-of-privileges rules
8
This is not to say that every temporary restraint on access to property rights made through
a community’s declaration will always be allowable. It is, for instance, conceivable that a
restriction on access to a condominium’s elevator which prevents a disabled person from
accessing that person’s privately-owned unit at all, or a restriction on access to the hallway
leading to one’s privately-owned unit, may not be permissible. Such circumstances are not
before the Court in this case and we refrain from speculating further on these applications
of the Maryland Condominium Act and laws such as the Americans with Disabilities Act.
20
through the broad language of the Declaration and By-Laws; therefore, there is no
unauthorized taking of property here.
Reasonable use restrictions through rules are common and necessary in
condominium management. As discussed above, such rules might, for example, close a
pool overnight or during the cold winter months for reasons of safety and common sense
regarding seasonal use patterns, and be applied equally to every unit owner. Standard
regulation of common elements in the case of condominiums encompasses reasonable
restrictions put in place under the authority of the governing documents for the good of all
members, tied to some pragmatic general need, such as safe and secure facilities or to avoid
wear and tear of communal facilities. These common-good regulations are clearly allowed
by Maryland law. See § 11-104(c) (“[Bylaws] also may contain any other provision
regarding the management and operation of the condominium including any restriction on
or requirement respecting the use and maintenance of the units and the common
elements.”).
“In reviewing the validity of a rule, a court must determine whether the Board of
Directors or Council of Unit Owners had the authority to promulgate the rule at issue under
the Act, declaration, and bylaws.” Ridgely, 343 Md. at 366. Elvaton’s existing Declaration
and By-Laws grant it broad powers to impose reasonable rules and enforce payment of
delinquent fees. The Declaration, at ¶ 7(F), states that each unit owner “shall contribute
toward payment of the Common Expenses,” and the “contribution of each Unit Owner
toward Common Expenses shall be determined, levied and assessed as a lien, all in the
manner set forth in the By-Laws.” We outlined earlier in this opinion that the By-Laws
21
anticipate and authorize the Board of Directors “to establish and provide for the collection
of assessments from the Unit Owners and for the assessment and/or enforcement of liens
therefor in a manner consistent with law and the provisions of these By-Laws and the
Declaration”; and
to promulgate and enforce such rules and regulations, and such restrictions
on, or requirements, as may be deemed proper respecting the use, occupancy
and maintenance of the project, and the use of the general and limited
common elements, as are designated, to prevent unreasonable interference
with the use and occupancy of the Condominium and of the general and
limited common elements by the Unit Owners, all of which shall be
consistent with laws and the provisions of these By-Laws and the
Declaration.
By-Laws Article V, § 3.
The condominium’s governing body is authorized to enforce payment of fees
through the imposition of a lien, id. at Article IX, § 7, which “may be enforced and
foreclosed” by the governing body “subject to the same requirements, as the foreclosure of
mortgages or deeds of trusts on real property in the state containing a power of sale.” The
By-Laws anticipate the need for rules on parking, stating that “[v]ehicular parking upon
general common elements may be regulated by the Board of Directors.” Id. at Article X,
§ 3(b). And last, violation of any rules by a Unit Owner is prohibited: “There shall be no
violation of any rules for the use of the general or limited common elements . . . adopted
by the Board of Directors.” Id. at Article X, § 3(r).
We have explained that, should a declaration allow it,9 a suspension-of-privileges
9
Elvaton makes an argument that, because the condominium association was established
before the effective date of the 1976 reauthorization of the law, which requires the grant of
authority for a taking of common elements be laid out in the declaration, the current law
22
use restriction on common elements may be permissible under the Act, so long as the
restriction is authorized by the declaration. Elvaton contends that the existing Declaration
is broad enough to embrace the suspension-of-privileges debt collection practice, and thus
the Rule establishing that practice is valid. Elvaton points out, for instance, that the
Declaration states that all unit owners are subject to the provisions of the By-Laws and
rules that Elvaton’s Board of Directors passes. Declaration, ¶ 11. The By-Laws provide
authority for Elvaton to implement use restrictions of general common elements (explicitly
including parking), to establish and provide for the collection of fees from unit owners, and
to prohibit violation of the association’s rules. By-Laws, Article X, § 3; Article V, § 3.
Elvaton argues the circuit court and Court of Special Appeals failed to engage in a proper
analysis of these broad provisions.
The Declaration here does not allow for such restrictions on communal property
access, therefore Elvaton’s Rule is invalid no matter how reasonable. No provision of the
Declaration contemplates suspension-of-privileges rules, the parking areas are identified
does not apply to Elvaton. Instead, the earlier version of the law, which allows authority
for a taking of common elements to be established in the declaration or the bylaws, should
apply. This argument fails because neither Elvaton’s Declaration nor its By-Laws provides
express authority for such a taking. In addition, this case does not involve a question of
retroactivity—the taking occurred in 2012. Elvaton’s actions are judged under the then-
current version of the law. The 1976 reauthorization says only that existing condominiums
need not amend their “declaration or master deed, bylaws, or condominium plat . . . to
comply with the requirements of this title.” § 11-128(a) (1976 Supp.). It does not follow
that this savings clause (seemingly designed to prevent existing governing documents from
becoming invalid where elements of the document conflict with the revised law) requires
that a forty-year-old version of the law applies to Elvaton and any other condominium
established in 1975 or earlier.
23
as common elements, and the Declaration provides that “common elements shall be
exclusively owned in common by all of the Unit Owners.” Declaration, ¶ 7(C). The pool
is also a common element, a recreational facility that each Unit Owner acquired rights over
when buying property in the condominium. “[E]ach Unit Owner . . . shall have the right
to use all of the recreational facilities . . . including swimming pool and bath house . . . .
This right shall be a right appurtenant to each condominium unit.” Id. at ¶ 15. Elvaton’s
reading of the existing Declaration and By-Laws is radically overbroad. While Elvaton
cites to provisions that allow the Council to reasonably regulate parking and to create
necessary rules for the complex, these are general grants of power to administer the
condominium on day-to-day issues, not the sort of clear, unambiguous release of property
rights that would be required to take the Roses’ property interest, even temporarily, in
general common elements. In fact, the By-Laws state precisely which methods are allowed
for enforcing payment of past-due assessments, and those methods do not include
restriction of parking and pool access: “All assessments, until paid, together with interest
on them and actual cost of collection, constitute a lien on the units . . . [which] may be
enforced and foreclosed by the Council of Unit Owners.” By-Laws, Article IX, §§ 4(b), 7.
In sum, § 11-108(a) states that, “except as provided in the declaration, the common
elements shall be subject to mutual rights of support, access, use, and enjoyment by all unit
owners.” Elvaton’s Declaration does not provide for an exception that would restrict
access to the common elements due to an alleged failure to pay fees. Thus, the “suspension-
of-privileges” Rule is invalid as beyond the Council’s power.
V
24
We turn now to the Roses’ contention that the circuit court should have issued a
declaratory judgment on the validity of their debt, even though that issue was pending
review in the District Court. Relying on the rules governing declaratory judgment
expressed in Vargas-Aguila v. State, Office of Chief Medical Examiner, 202 Md. App. 375,
382 (2011), and Courts and Judicial Proceedings Article § 3-409 of the Maryland Code,
the circuit court ruled that here, where the precise issue at hand was already within the
jurisdiction of the District Court but was stayed, and there were no unusual and compelling
circumstances, the circuit court would not grant declaratory judgment. The Roses
challenge that ruling.
A.
Courts and Judicial Proceedings § 3-409(a) provides that a court “may grant a
declaratory judgment or decree in a civil case” (emphasis added). This Court has
concluded that, therefore, “declaratory judgment generally is a discretionary type of
relief.” Converge Servs. Group, LLC v. Curran, 383 Md. 462, 477 (2004). Consequently,
the trial judge’s decision not to grant declaratory judgment is reviewed under the
deferential abuse of discretion standard. Sprenger v. Pub. Serv. Comm’n of Md., 400 Md.
1, 21 (2007).
B.
The courts of this State “will refuse [to issue declaratory judgment] where another
court has jurisdiction of the issue, where a proceeding involving identical issues is already
pending in another tribunal, where a special statutory remedy has been provided, or where
another remedy will be more effective or appropriate under the circumstances.” Haynie v.
25
Gold Bond Bldg. Prods., 306 Md. 644, 651 (1986) (citation omitted). “In these cases it is
neither useful nor proper to issue the declaration.” Id. Ordering declaratory relief “to
decide an issue, even though the issue is presented in another pending case between the
parties” is reserved for “very unusual and compelling circumstances.” Id. at 652 (citation
omitted). This rule is applicable in both civil and criminal cases. See A.S. Abell Co. v.
Sweeney, 274 Md. 715, 720 (1975).
We agree with the circuit court and the Court of Special Appeals that, because the
validity of the Roses’ alleged debt was already pending before the District Court, the circuit
court, guided by our caselaw, was well within its discretion to dismiss Declarations (2),
(3), and (4) in the absence of unusual and compelling circumstances, and no such
circumstances are present here.
The Roses attempt to dissuade us by arguing that a compelling circumstance exists
in that the District Court is a court of limited jurisdiction—it is not empowered to determine
ownership interests in real property. See Cts. & Jud. Proc. § 4-402(b). The Roses claim
that, therefore, the District Court may not make determinations related to the lien imposed
by Elvaton on their unit. Yet it is plain, and undisputed by the parties, that the issue of the
validity of the debt is properly before the District Court. The validity of the lien flows
directly from that question, and thus the elimination of the lien is not an independent issue
but instead only a remedy—one that the Roses may pursue should they be successful in
winning the issue of the alleged debt.
Last, while it is true, as the Roses point out, that the District Court case could have
been consolidated with the circuit court case if Elvaton requested that this be done, Elvaton
26
was not required to do so. See Cts. & Jud. Proc. § 6-104(b)(1) (when related actions
between same parties are filed in the District Court and a circuit court, the party who filed
in the District Court may move to consolidate with the action pending in circuit court). We
also note that the Roses enjoyed the right to challenge Elvaton’s imposition of a lien in
circuit court at an earlier time, but neglected to make this challenge. Elvaton filed its lien
against the Roses pursuant to § 11-110(d), which grants condominiums the power to
enforce delinquent condominium fees through “the imposition of a lien on a unit in
accordance with the provisions of the Maryland Contract Lien Act.” In turn, the Maryland
Contract Lien Act empowers unit owners to oppose that lien:
A party to whom notice is given under subsection (a) of this section may,
within 30 days after the notice is served on the party, file a complaint in the
circuit court for the county in which any part of the property is located to
determine whether probable cause exists for the establishment of a lien.
§ 14-203(c)(1) (emphasis added). The Roses possessed this right to litigate the lien in
circuit court, but did not invoke it at the time Elvaton filed its Statement of Lien.
The District Court had proper jurisdiction over the delinquent fee dispute, and we
discern no unusual or compelling circumstances in this case that would entitle the Roses to
have the dispute resolved in circuit court. Therefore, the circuit court’s decision not to
grant declaratory relief was reasonable and does not constitute an abuse of discretion.
JUDGMENT OF THE COURT OF
SPECIAL APPEALS AFFIRMED;
COSTS IN THIS COURT TO BE
SPLIT EQUALLY BETWEEN THE
PARTIES.
27