Maryland passes sweeping changes to condominium law, particularly in the area of insurance.  Owners of condominiums in Maryland should immediately contact their management and their insurance carriers to be sure they have the proper insurance and that there is no duplication of coverage.

The law now REQUIRES condominium master policies to cover the reconstruction of the interior of the unit to the condition in which it was first delivered by the developer.  Previously, under a Maryland Court of Appeals ruling, associations and their master policy carriers were given the green light to refuse to do any work inside a unit. Often, owners purchased coverage for replacement of carpet, interior partitions, bathrooms and kitchens because the master policy did not cover those items. Now it must.

Owners are also now clearly liable for damage to common elements and to other units when the damage originates from their unit.  Previously, it was necessary to prove negligence–no longer the case.  If the fire starts in your unit or the water comes from your unit, you must pay.  The liability is limited to the lesser of the master policy deductible or $5,000.  Your condominium unit owner’s policy can cover your liability under the master policy deductible.

Remember, the master policy repairs need only restore the unit to the condition delivered by the developer.  If you have added hardwood floors or upgraded your kitchen, you need to talk to your agent about including “betterments and improvements” coverage to help restore these upgrades should a disaster occur.

Don’t delay.  This law change is already in effect.  You may have duplicate coverage. You may not have coverage for the deductible or upgrades. Disaster will not wait until you have time to make the appropriate changes to your policy. This change is to the Condominium Act and has no impact on units in homeowners associations.