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Commission on Common Ownership Communities

Minutes of the Monthly Meeting

June 3, 2015


The monthly meeting of the Commission on Common Ownership Communities was called to order at 7:07 pm by Chairperson Rand H. Fishbein.
Present: Commissioners Fishbein, Winegar, Brandes, Coyle, Cromwell, Ethier, Fonoroff, Mays, Rahmani, Stone, Weinstein, Zajic (12)
Absent: Commissioners Molloy, Dubin (2).  There is one vacancy.
Also attending: Walter Wilson, Associate County Attorney:  Peter Drymalski, CCOC Staff; Kristin Latham, Office of Legislative Oversight; Steven Muse, Larry Dorney, OCP Director Eric Friedman, Wayne Amchin, Dallas Valley.
            1. MINUTES.  The minutes of the May meeting were unanimously approved as drafted.  (Commissioner Cromwell abstained.)
            2. COMMUNITY FORUM:
            Mr. Larry Dorney circulated a printed statement in which he stated that in a recent legal action against him, he objected to a nolle prosequi, and he appealed the dismissal of the case to the Circuit Court and demanded a trial by jury.  He asked for comments.  Mr. Wilson advised that no comments by the CCOC were necessary.
            Mr. Steven Muse presented a copy of a letter previously submitted to the CCOC listing several errors he believed the hearing panel made in his case.  He complained that the CCOC was taking too long to respond.  He also stated that he disagreed with the panel’s ruling that the open meetings statute did not apply to all meetings of the association’s board of directors.  Mr. Wilson replied that Mr. Muse might have confused the Open Meetings Act for government agencies with the open meetings statute in the HOA Act, and they are not identical.  Mr. Drymalski also pointed out that the real problem with the interpretation of the HOA Act’s open meetings section is that the law does not define what is a “meeting” that is covered by the Act.
            The staff presented its summaries and recommendations for Case Numbers 40-14, 54-14, 72-14 and 88-14.  Mr. Wilson concurred in the staff’s recommendations.  The Commission voted unanimously to accept jurisdiction of those cases.  The Commission voted unanimously to refer ##40-14 and 54-14 to a hearing panel for further action and to recommend to the hearing panel that it order the parties to attend mediation prior to their hearings.  The Commission voted unanimously to enter orders of default in ##72-14 and 88-14 and to refer them to hearing panels for further action, with the recommendation that if the respondents did file motions to vacate the defaults, then the hearing panel consider ordering the parties to attend a mediation session prior to any hearing or judgment on the cases. 
            The Commission voted unanimously to accept jurisdiction of Items 2, 3, 4. 7 and 8 of the staff summary in #95-14, and to reject jurisdiction of Items 1, 5, 6, and 9.  The Commission also voted to recommend that the hearing panel to which it assigned the case order the parties to attend a mediation session prior to any hearing in the case.
            The Commission appointed the following panels: to ##40-14 and 54-14, Ethier, Weinstein and Cromwell; to ##72-14 and 88-14, Ethier, Rahmani, Fishbein; to #95-14, Winegar, Mays, Coyle.
            Ms. Winegar reported that she attended an open meeting of the Chelsea Towers Condominium, attended by 11 people.  They had several questions about proper procedures and about crime in the area.
            Staff summarized the decision in Lopez v. Spring Lake Condominium, #30-13.  Mr. Zajic asked why the panel did not order the Complainant to pay attorney fees since she did not present a strong case.  Mr. Fonoroff replied that the panel was unhappy that the Respondent never sat down with the Complainant before the hearing to explain to her why it was doing what it did, and that the case might have been settled if it had done so.
            Mr. Wilson reported that Circuit Judge Ronald Rubin reversed the CCOC’s decision in Baroni v. Avenel , #55-11.  The court concluded that the CCOC hearing panel had misapplied the law relating to the “business judgment rule” by impermissibly substituting its judgment for what the court viewed as a legitimate business decision by the HOA to adopt roofing guidelines under which natural slate was the only Class A rated roof material approved for home roofing projects in the affected area of the community.  In its ruling from the bench, the judge did not specifically address the proper interpretation of County Code Section 22-98 or the scope of the CCOC’s authority to grant injunctive relief under County Code Section 10B-13 other than to say that deciding whether the CCOC may issue injunctions was unnecessary to resolve the matter before the court .  (Section 22-98 prohibits an HOA from enforcing a rule that would require a member to install a roof material that lacks a Class A fire resistant rating.)  The “business judgment” rule was one of the primary grounds for appeal argued by the parties, but not by the County whose argument focused on interpretation of applicable County Code provisions.  However, the judge’s ruling is not binding on any other Circuit Court judges in other cases.  Mr. Wilson thought that the judge’s ruling did not affect the Fire Marshal’s interpretations of Section 22-98 as stated in the CCOC opinion.  Any further appeal must be authorized by the County Executive.  The consensus of the Commission was to support an appeal.
            Ms. Ethier stated that her committee (Process & Procedures) was considering amending County law to require that all HOAs adopt dispute resolution procedures similar to those in the Condominium and Cooperative  Housing Acts, and that all associations be required to establish procedures for handling complaints by members against their associations.  Mr. Wilson responded that the County is likely less inhibited in its authority to regulate certain HOA activities than with respect to condominiums and cooperatives, because state laws regulate their dispute resolution procedures in some detail. Therefore, there may be “implied pre-emption” by the State.  However, the State has not regulated HOA dispute procedures, so implied preemption is less likely to be an issue.  In order to answer the question of whether there is any implied preemption of the proposed laws, a State senator or delegate could ask for an informal opinion from the Attorney General, or the County Council’s staff attorney could give an opinion on a proposal.
            7. STAFF REPORTS:
            The staff circulated the monthly statistical report for May, 2015.  Staff also reported that the CCOC was co-hosting a seminar taught by the District Court judges on issues connected with association debt collections, which will be held June 10.
            Staff circulated a draft of a letter to the Mayor of Rockville expressing the CCOC’s interest in, and support of, legislation to renew the City’s compliance with Chapter 10B of the County Code.  The consensus of the CCOC was to support the letter, have the chairperson sign it, and send it to the City.
            Staff withdrew its proposed draft of an enforcement policy for the mandatory training as premature.  It was not clear at this time if the law would take effect on January 1, 2016, or if it would have to be delayed due to problems creating the training class.
            8. COMMITTEE REPORTS:
            Ms. Ethier presented a draft of a report from the Process & Procedures Committee on improvements in the CCOC’s dispute resolution procedures which will be sent to the County Executive.  One of its goals is to facilitate early resolution of complaints by adding an investigator to the staff who can meet onsite with the parties and try to conciliate them.  The goal also includes changing the law to make mediations mandatory; a standing hearing panel would review any refusals to mediate.  Another goal is to increase assistance to laymen by, for example, offering more pre-hearing assistance and referrals for free or reduced cost legal advice.  A third goal is to speed up the process by reducing the numbers of continuance requests and postponements, this would be accomplished by delaying the first hearing so that the parties have more time to research and prepare their cases and more time to eliminate scheduling conflicts.  The committee has a draft proposal—not a final, comprehensive proposal—which it intends to submit to both the County Executive and the County Council. 
            Ms. Ethier asked all the commissioners to send her their comments and votes on the package of proposals by June 13, because the package must go to the OLO by June 15 in time for the joint committee meetings on June 18 with the Council.  She requested that members not comment on the details of the proposals, because  they are working papers, but rather to vote on whether the preliminary proposals should be sent to the Executive and the Council.
            Ms. Ethier reported that one of the possible solutions considered by her committee is to ban lawyers from the process at least until the case is set for a hearing.  Mr. Wilson replied that such a proposal was probably unconstitutional.
            Mr. Stone reported for the Legislation Committee on Council Bill 19-15, offered by Mr. Elrich.  The bill proposes that the Director of the Department of Housing and Community Affairs draft a model lease which all landlords would be required to use.  The bill itself does not state the contents of the model lease.  The bill would have no effect on community associations unless it banned the use of lease addenda, which it does not do at this time.  The real purpose of the bill is to collect more data on rent increases and to control such increases.  There was no need for CCOC action at this time.
            9. OLD BUSINESS:
             Dr. Fishbein reported that he had had a long discussion with Robert Cobb, staff attorney to the Ethics Commission, about solutions to its opinion that it is a conflict of interest for the CCOC to use as panel chairs lawyers who also practice before the CCOC in other cases.  The Ethics Commission seems fixed in its position at this time, although Mr. Cobb was sympathetic to the CCOC’s problems.
            Mr. Stone and Ms. Ethier asked the basis for the Ethics opinion, since panel chairs are not paid for their services and aren’t employees regulated by the County.  Mr. Wilson responded that the Ethics law says that “no employee” can work “for” or be “employed by” a person or firm which is regulated by the County without a waiver from the Ethics Commission.  As defined by the law, an employee is any person who serves the County, whether or not paid; and community associations are “regulated” by the CCOC.
            10. NEW BUSINESS:
            Ms. Mays tendered her resignation as vice-chairperson of the Commission, and the Commission offered her its sincere thanks for her services, especially in responding to OLO inquiries. 
            Ms. Ethier nominated Ms Winegar as vice-chairperson, Mr. Fonoroff seconded the nomination, and the Commission elected Ms. Winegar by acclamation.
            The Commission adjourned at 9:20pm.
            11. NEXT MEETING:  The next meeting will be Wednesday,  July 1, and the following meeting will be Wednesday, August 5.

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