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WES MOORE, Governor Ch. 717
Chapter 717
(Senate Bill 747)
AN ACT concerning
Condominiums – Unit Owner Responsibility for Damage or Destruction and
Mandatory Insurance Coverage
FOR the purpose of providing that a certain unit owner is responsible for a certain cost of
repair or replacement for certain portions of a condominium under certain
circumstances; requiring a council of unit owners to inform unit owners annually of
certain responsibilities; requiring a certain condominium unit owner to obtain a
certain insurance policy for the unit; requiring a certain insurance policy to include
certain provisions; authorizing a council of unit owners to acquire a certain insurance
policy and charge a certain assessment under certain circumstances; and generally
relating to unit owner responsibility for damage or destruction and mandatory
insurance coverage for condominiums.
BY repealing and reenacting, with amendments,
Article – Real Property
Section 11–114
Annotated Code of Maryland
(2023 Replacement Volume and 2025 Supplement)
BY adding to
Article – Real Property
Section 11–114.3
Annotated Code of Maryland
(2023 Replacement Volume and 2025 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Real Property
11–114.
(a) Commencing not later than the time of the first conveyance of a unit to a
person other than the developer, the council of unit owners shall maintain, to the extent
reasonably available:
(1) Property insurance against risks of direct physical loss commonly
insured against in amounts determined by the council of unit owners, but not less than any
amounts specified in the declaration or bylaws:
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Ch. 717 2026 LAWS OF MARYLAND
(i) For attached units, multifamily dwelling units, or detached units
located within a condominium not composed entirely of similar detached units, on the
common elements and units, exclusive of improvements and betterments installed in units
by unit owners other than the developer; and
(ii) For detached units located within a condominium composed
entirely of similar detached units, on the common elements; and
(2) Comprehensive general liability insurance, including medical
payments insurance, in an amount determined by the council of unit owners, but not less
than any amount specified in the declaration or bylaws, covering occurrences commonly
insured against for death, bodily injury, and property damage arising out of or in connection
with the use, ownership, or maintenance of the common elements.
(b) (1) (i) The council of unit owners shall give notice to all unit owners of
the termination of any insurance policy within 10 days of termination.
(ii) The declaration or bylaws may require the council of unit owners
to carry any other insurance, and the council of unit owners in any event may carry any
other insurance it deems appropriate to protect the council of unit owners or the unit
owners.
(2) (i) The council of unit owners shall give an annual notice, in writing,
of any obligation of an owner of a residential, detached unit to obtain property insurance
coverage on the unit.
(ii) If there is a change in any obligation under subparagraph (i) of
this paragraph, the council of unit owners shall promptly provide the unit owner with an
updated notice.
(c) Insurance policies carried pursuant to subsection (a) of this section shall
provide that:
(1) Subject to the applicable coverage specified under subsection (a)(1) of
this section, each unit owner is an insured person under the policy with respect to liability
arising out of the unit owner’s ownership of an undivided interest in the common elements
or membership in the council of unit owners for property and casualty losses to the common
elements and the units, exclusive of improvements and betterments installed in the units
by unit owners other than the developer;
(2) The insurer waives its right to subrogation under the policy against any
unit owner of the condominium or members of his household;
(3) An act or omission by any unit owner, unless acting within the scope of
his authority on behalf of the council of unit owners, does not void the policy and is not a
condition to recovery under the policy; and
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WES MOORE, Governor Ch. 717
(4) [If] SUBJECT TO THE RESPONSIBILITY OF A UNIT OWNER UNDER
SUBSECTION (G)(2)(III) OF THIS SECTION, IF, at the time of a loss under the policy, there
is other insurance in the name of a unit owner covering the same property covered by the
policy, the policy is primary insurance not contributing with the other insurance.
(d) (1) Subject to the applicable coverage specified under subsection (a)(1) of
this section, any loss covered by the property policy shall be adjusted with the council of
unit owners, but the insurance proceeds for that loss shall be payable to any insurance
trustee designated for that purpose, or otherwise to the council of unit owners, and not to
any mortgagee.
(2) The insurance trustee or the council of unit owners shall hold any
insurance proceeds in trust for unit owners and lien holders as their interests may appear.
(3) (i) Subject to the provisions of subsection (g) of this section, the
proceeds shall be disbursed first for the repair or restoration of the damaged common
elements and, for condominiums with attached units, multifamily units, or detached units
located within a condominium not composed entirely of similar detached units that must
maintain a property insurance policy on the units, the damaged units.
(ii) Unit owners and lien holders are not entitled to receive payment
of any portion of the proceeds unless:
1. There is a surplus of proceeds after the common elements
and, for condominiums with attached units, multifamily units, or detached units located
within a condominium not composed entirely of similar detached units that must maintain
a property insurance policy on the units, the units have been completely repaired or
restored; or
2. The condominium is terminated.
(e) (1) [An] IN ADDITION TO THE REQUIREMENT IMPOSED ON A UNIT
OWNER UNDER § 11–114.3 OF THIS TITLE, AN insurance policy issued to the council of
unit owners does not prevent a unit owner from obtaining ADDITIONAL insurance for his
own benefit.
(2) Unless a council of unit owners exercises the authority under
paragraph (3) of this subsection, an owner of a residential, detached unit located within a
condominium composed entirely of similar detached units, shall carry homeowners
insurance coverage on the entirety of the unit.
(3) A council of unit owners may carry homeowners insurance on the
entirety of all detached units located within a condominium composed entirely of similar
detached units.
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Ch. 717 2026 LAWS OF MARYLAND
(f) (1) An insurer that has issued an insurance policy under this section shall
issue certificates or memoranda of insurance to the council of unit owners and, upon
request, to any unit owner, mortgagee, or beneficiary under a deed of trust.
(2) An insurer may cancel an insurance policy issued under this section in
accordance with § 27–603 of the Insurance Article.
(g) (1) Subject to the applicable coverage specified under subsection (a)(1) of
this section, any portion of the common elements and the units, exclusive of improvements
and betterments installed in the units by unit owners other than the developer, damaged
or destroyed shall be repaired or replaced promptly by the council of unit owners unless:
(i) The condominium is terminated;
(ii) Repair or replacement would be illegal under any State or local
health or safety statute or ordinance; or
(iii) 80 percent of the unit owners, including every owner of a unit or
assigned limited common element which will not be rebuilt, vote not to rebuild.
(2) (i) 1. The cost of repair or replacement in excess of insurance
proceeds and reserves is a common expense.
2. A property insurance deductible is not a cost of repair or
replacement in excess of insurance proceeds.
(ii) If the cause of any damage to or destruction of any portion of the
condominium originates from the common elements or an event outside of the condominium
units and common elements, the council of unit owners’ property insurance deductible is a
common expense.
(iii) 1. If the cause of any damage to or destruction of any portion
of the condominium originates from a unit, the owner of the unit where the cause of the
damage or destruction originated is responsible for THE LEAST OF:
A. THE TOTAL COST OF THE REPAIR OR REPLACEMENT;
B. THE AMOUNT OF the council of unit owners’ property
insurance deductible [not to exceed $10,000] AS SPECIFIED IN THE COUNCIL OF UNIT
OWNERS’ PROPERTY INSURANCE POLICY; OR
C. $25,000.
2. The council of unit owners shall inform each unit owner
annually in writing of:
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WES MOORE, Governor Ch. 717
A. The unit owner’s responsibility [for the council of unit
owners’ property insurance deductible] UNDER SUBSUBPARAGRAPH 1 OF THIS
SUBPARAGRAPH; and
B. The amount of the COUNCIL OF UNIT OWNERS’
deductible AS SPECIFIED IN THE COUNCIL OF UNIT OWNERS’ PROPERTY INSURANCE
POLICY.
3. The ACTUAL AMOUNT OF THE council of unit owners’
property insurance deductible amount exceeding the [$10,000] responsibility of the unit
owner UNDER SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH is a common expense.
(iv) In the same manner as provided under § 11–110 of this title, the
council of unit owners may make an [annual] assessment against the unit owner
responsible under subparagraph (iii) of this paragraph.
(3) If the damaged or destroyed portion of the condominium is not repaired
or replaced:
(i) The insurance proceeds attributable to the damaged common
elements shall be used to restore the damaged area to a condition compatible with the
remainder of the condominium;
(ii) The insurance proceeds attributable to units and limited
common elements which are not rebuilt shall be distributed to the owners of those units
and the owners of the units to which those limited common elements were assigned; and
(iii) The remainder of the proceeds shall be distributed to all the unit
owners in proportion to their percentage interest in the common elements.
(4) (i) If the unit owners vote not to rebuild any unit, that unit’s entire
common element interest, votes in the council of unit owners, and common expense liability
are automatically reallocated upon the vote as if the unit had been condemned under §
11–112 of this title, and the council of unit owners promptly shall prepare, execute, and
record an amendment to the declaration reflecting the reallocations.
(ii) Notwithstanding the provisions of this subsection, § 11–123 of
this title governs the distribution of insurance proceeds if the condominium is terminated.
(h) The council of unit owners shall maintain and make available for inspection a
copy of all insurance policies maintained by the council of unit owners.
(i) The provisions of this section do not apply to a condominium all of whose units
are intended for nonresidential use.
11–114.3.
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Ch. 717 2026 LAWS OF MARYLAND
(A) (1) THIS SECTION APPLIES ONLY TO A CONDOMINIUM COMPOSED
ENTIRELY OF UNITS INTENDED FOR RESIDENTIAL USE.
(2) THIS SECTION DOES NOT APPLY TO DETACHED UNITS OF A
CONDOMINIUM COMPOSED ENTIRELY OF SIMILAR DETACHED UNITS.
(B) (1) A UNIT OWNER SHALL MAINTAIN A CONDOMINIUM UNIT OWNER
INSURANCE POLICY OR A SUBSTANTIALLY SIMILAR PROPERTY INSURANCE POLICY
ON THE UNIT.
(2) AN INSURANCE POLICY REQUIRED UNDER PARAGRAPH (1) OF
THIS SUBSECTION SHALL INCLUDE:
(I) COVERAGE FOR THE COUNCIL OF UNIT OWNERS’ PROPERTY
INSURANCE DEDUCTIBLE OR A PORTION OF THE DEDUCTIBLE REQUIRED UNDER §
11–114 OF THIS TITLE;
(II) A COVERAGE LIMIT THAT IS SUFFICIENT TO REPAIR OR
REPLACE THE UNIT OWNER’S PERSONAL PROPERTY OR THE CONTENTS OF THE UNIT;
(III) LOSS OF USE COVERAGE IN AN AMOUNT SUFFICIENT TO
PROVIDE ALTERNATE HOUSING FOR AT LEAST 12 MONTHS IF THE UNIT OWNER
CANNOT LIVE IN THE UNIT;
(IV) PERSONAL LIABILITY COVERAGE OF AT LEAST $500,000;
(V) LOSS ASSESSMENT COVERAGE OF AT LEAST $25,000; AND
(VI) (III) DWELLING OR BUILDING PROPERTY COVERAGE OF AT
LEAST THE GREATER OF:
1. $25,000; OR
2. THE AMOUNT NECESSARY TO REPAIR AND REPLACE:
A. ALTERATIONS, ADDITIONS, IMPROVEMENTS AND
BETTERMENTS, AND INVESTMENTS MADE BY THE CURRENT OWNER OR ACQUIRED
BY THE CURRENT UNIT FROM ANY PREVIOUS OWNER OTHER THAN THE DEVELOPER;
AND
B. UPGRADES CONVEYED TO THE UNIT OWNER THAT
ARE THE RESPONSIBILITY OF THE UNIT OWNER TO INSURE UNDER THE BYLAWS OF
THE CONDOMINIUM.
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WES MOORE, Governor Ch. 717
(C) THE BYLAWS OF A CONDOMINIUM MAY NOT REQUIRE A UNIT OWNER TO
MAINTAIN AN INSURANCE POLICY THAT INCLUDES COVERAGE AMOUNTS IN EXCESS
OF THE REQUIREMENTS UNDER SUBSECTION (B) OF THIS SECTION.
(D) EACH UNIT OWNER SHALL PROVIDE EVIDENCE OF THE INSURANCE
POLICY REQUIRED UNDER SUBSECTION (B) OF THIS SECTION TO THE COUNCIL OF
UNIT OWNERS:
(1) ANNUALLY; AND
(2) ON REQUEST BY THE COUNCIL OF UNIT OWNERS.
(E) (1) IF A UNIT OWNER DOES NOT MAINTAIN AN INSURANCE POLICY AS
REQUIRED UNDER SUBSECTION (B) OF THIS SECTION, THE COUNCIL OF UNIT
OWNERS MAY ACQUIRE AN INSURANCE POLICY ON BEHALF OF THE UNIT OWNER.
(2) A COUNCIL OF UNIT OWNERS THAT ACQUIRES AN INSURANCE
POLICY ON BEHALF OF A UNIT OWNER UNDER PARAGRAPH (1) OF THIS SUBSECTION
MAY CHARGE THE INSURANCE PREMIUM AS AN ASSESSMENT TO THE UNIT OWNER.
(3) FOR AN INSURANCE POLICY ACQUIRED ON BEHALF OF A UNIT
OWNER UNDER THIS SUBSECTION, THE INSURANCE CARRIER SHALL PAY DIRECTLY
TO THE COUNCIL OF UNIT OWNERS THE PORTION OF THE COUNCIL’S DEDUCTIBLE
THAT THE UNIT OWNER IS RESPONSIBLE FOR UNDER § 11–114 OF THIS TITLE THE
ABSENCE OF INSURANCE COVERAGE UNDER THIS SECTION DOES NOT LIMIT A UNIT
OWNER’S RESPONSIBILITY UNDER § 11–114(G)(2)(III) OF THIS TITLE.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2026 2027.
Approved by the Governor, May 26, 2026.
–7–Every fact on this page links to its source, starting with the official bill record.