The Maryland Court of Appeals ruled that consumer protection laws apply to parties other than direct sellers in real estate transactions, saying a condo owners’ association could be held liable for lowballed damage and repair costs.
In the landmark decision, Judge Lynne A. Battaglia found that Maryland law, which requires condo associations to outline operating expenses and potential code violations to would-be buyers, opens the associations to culpability because they are an intrinsic part of the sale.
The case centers on a group of 25 condo owners who say the Tomes Landing Condominium Association — the resident-elected governing body of the Tomes Landing complex in Port Deposit — understated operating expenses and concealed structural damage and health risks in the required presale certificates, duping buyers into purchasing properties they otherwise wouldn’t have.
The condo buyers lodged their suit in 2005, alleging the association kept secret damages they knew about as early as 1996 and repair costs they knew about as early as 2000.
The judge said the association and MRA could be liable under the Consumer Protection Act, “given that every plaintiff averred in his or her affidavit that he or she would not have purchased a unit if a budget provided by MRA and the association had disclosed the expenses necessary to correct the problems.”