Can a Maryland county like Montgomery County pass its own condominium laws, or does the state Condominium Act override them?

Plain-English summary

Four members of the Montgomery County legislative delegation asked the Attorney General to analyze how the county's own condominium ordinance, Chapter 11A of the Montgomery County Code, interacted with the statewide Maryland Condominium Act, and whether a county task force's proposed additions, including a mandatory dispute-resolution system for condominium and homeowners association disputes, were legally permissible. The opinion explained that the Condominium Act preempted any local law touching a subject the state law already covered, unless the local law fit within one of four narrow statutory exceptions covering rental-conversion right-of-first-refusal programs, extended-lease protections for vulnerable households, and consumer protection. Applying that framework, the opinion found that most of Montgomery County's existing conversion-related ordinance fit within the exceptions and was valid, with one likely exception: a provision letting the county buy a unit on terms less favorable to a departing tenant than state law required. The opinion was considerably more skeptical of the proposed mandatory dispute-resolution board, concluding it would likely conflict with a dispute mechanism the Condominium Act already established, and cautioned that the county's general consumer-protection authority to legislate did not extend to matters of internal condominium governance, such as board composition or declaration amendments, that were not tied to a unit's purchase or the services a condominium's governing board delivers to owners. The opinion closed by suggesting ways the General Assembly could clarify the scope of the consumer-protection exception going forward.

Currency note

This opinion was issued in 1983. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a Maryland county pass its own condominium law in 1983?
Only in limited circumstances. The opinion explained that the Maryland Condominium Act was "statewide in effect" and preempted any county, city, or other local law touching a subject the Act covered, unless that local law fell within one of four exceptions written into the statute: rental-conversion right of first refusal, unit-conversion right of first refusal, extended leases in a housing emergency, or consumer protection.

Which exception gave counties the most room to legislate?
The consumer protection exception, RP §11-130(d). The opinion read it to allow a county to pass condominium rules more protective than the state Consumer Protection Act, but only if those rules concerned an actual or prospective unit purchaser or the ongoing provision of goods and services by a condominium's governing board, not general condominium governance questions.

Did the opinion find that Montgomery County's existing condo ordinance was valid?
Mostly yes. The opinion found that most provisions of Chapter 11A of the Montgomery County Code, covering the county's right of first refusal on rental-to-condominium conversions and extended leases for vulnerable tenant households, were expressly authorized by and consistent with the state Condominium Act. It flagged one provision on purchase terms for the county's unit purchases as potentially in conflict with state law.

Did the AG think Montgomery County could create its own mandatory board to resolve condo disputes?
No, the opinion was skeptical. It found that the Condominium Act already established a statutory dispute mechanism effective January 1, 1982, and concluded that a county ordinance imposing a separate mandatory dispute-resolution mechanism would likely conflict with that existing state scheme and be ineffective, though it left open whether a county could require condominiums to "opt out" of the state mechanism through their own governing documents.

Background and statutory framework

The Maryland Condominium Act, Title 11 of the Real Property Article, states that its provisions "are statewide in their effect" and that local laws are "preempted by the subject and material of this title" (RP §11-122(b)), and further provides that if a local enactment conflicts with the Act, the Act "shall prevail" (RP §11-141(c)). The opinion identified four statutory exceptions where local legislation is not preempted: RP §11-138 (local right of first refusal to purchase a rental facility before condominium conversion), RP §11-139 (local right of first refusal to purchase individual converting units, capped at 20% of total units), RP §11-140 (extended leases for "designated households," including elderly or handicapped tenants, during a housing emergency caused by conversion), and RP §11-130 (consumer protection legislation more stringent than the state Consumer Protection Act).

Reviewing Montgomery County's Chapter 11A ordinance against this framework, the opinion found the county's rental-facility right of first refusal (§11A-3) and unit-purchase right of first refusal (§11A-4) largely tracked and, in the rental-facility context, exceeded the relocation protections of state law, but flagged that §11A-4(b)(3)'s purchase-price terms for county acquisitions appeared to conflict with RP §11-136(e), which barred an owner from offering more favorable terms to a later buyer than were offered to the tenant during the statutory notice period. On consumer protection, the opinion read RP §11-130(d) together with the Commercial Law Article's definition of "consumer" (CL §13-101(c)) to authorize county legislation addressing a unit purchaser's acquisition of a condominium or the governing board's provision of goods and services, citing the county's consumer-guide disclosure rule (§11A-7) and reserve-fund contribution requirement (§11A-9) as examples within that scope (citing 67 Opinions of the Attorney General 13, 1982). The opinion declined to read the consumer-protection exception as a blanket grant of local authority over condominium law generally (citing County Council for Montgomery Co. v. Montgomery Assoc., Inc. and City of Baltimore v. Sitnick & Firey), reasoning that matters like board-composition limits or declaration amendments were governed by the Condominium Act's own amendment procedures (RP §§11-109(b), 11-104(e), 11-103(c)(1)) rather than by local consumer-protection ordinances. It further cautioned that proposed restrictions on selling or leasing units to nonresidents could raise separate concerns about restraints on alienation of property (citing Real Estate Co. v. Serio and Kenney v. Morgan), contrasting them with a right-of-first-refusal model used in other states (citing Lyons v. King and Backus v. Smith, and Mass. Gen. Laws Ann. ch. 183A, §12(c)) that could not be used to restrict alienation based on race, color, creed, national origin, or sex (citing Montgomery Citizens League v. Greenhalgh). On the proposed mandatory dispute-resolution board, the opinion found the Condominium Act already supplied a dispute mechanism applicable to complaints arising on or after January 1, 1982 (RP §11-113(a)), making a conflicting mandatory local alternative ineffective under RP §11-141(c), while leaving open whether county law could require condominiums to "opt out" of the state mechanism through their own governing documents as RP §11-113 itself permits.

Citations

Statutes:

• RP §11-122(b) (statewide preemption of local condominium legislation, with four exceptions)
• RP §11-141(c) (state Condominium Act prevails over conflicting local law)
• RP §11-138 (local right of first refusal, rental facility conversion)
• RP §11-139, §11-139(a)(3), §11-139(b) (local right of first refusal, individual unit conversion, 20% cap)
• RP §11-136(a)(1), §11-136(a)(2)(i), §11-136(c)(2), §11-136(e) (tenant right of first refusal and offer terms on conversion)
• RP §11-102.1 (notice of conversion)
• RP §11-140, §11-140(b)(2)(ii) (extended leases for designated households in a housing emergency)
• RP §11-137(a)(2), §11-137(k)(1) (definition and 20% cap on designated households)
• RP §11-130, §11-130(b)(1), §11-130(c), §11-130(c)(1), §11-130(d) (consumer protection exception to preemption)
• RP §11-126, §11-126(b)(5)(iii) (developer disclosure requirements, including reserve fund)
• RP §11-113(a), §11-113 (statutory condominium dispute mechanism)
• RP §11-109(b), §11-109(d) (council/board powers)
• RP §11-104(e) (bylaws amendment)
• RP §11-103(c)(1) (declaration amendment)
• RP §11-131 (warranties)
• CL §13-103, §13-101(c), §13-101(d), §13-101(i), §13-101(j), §13-102 (Consumer Protection Act definitions and scope)
• Chapter 246, Laws of Maryland 1981 (1981 amendments creating the local-legislation exceptions)
• Chapter 836, Laws of Maryland 1982 (repeal and reenactment of former RP §11-139(c)(4))
• Mass. Gen. Laws Ann., Chapter 183A, §12(c) (out-of-state comparison, right of first refusal model)
• Sections 11A-3, 11A-4, 11A-5(b), 11A-7, 11A-9, 11A-10, Montgomery County Code

Cases:

• County Council for Montgomery Co. v. Montgomery Assoc., Inc., 274 Md. 52, 59 (1975)
• City of Baltimore v. Sitnick & Firey, 254 Md. 303 (1969)
• Real Estate Co. v. Serio, 156 Md. 229, 234-35 (1929)
• Kenney v. Morgan, 22 Md. App. 698, 704-06 (1974)
• Lyons v. King, 397 So.2d 964 (Fla. App. D4, 1981)
• Backus v. Smith, 364 So.2d 786 (Fla. App. D1, 1978)
• Montgomery Citizens League v. Greenhalgh, 253 Md. 151 (1969)
• Mayor and Council of Forest Heights v. Frank, 291 Md. 331, 337 (1981)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1983/Volume68_1983.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

Condominiums, Local Government, Preemption, Conflict, Consumer Protection, Analysis Of Montgomery County Condominium Legislation And Proposals.

December 20, 1983

The Honorable Sidney Kramer
The Honorable Idamae Garrott
The Honorable Lucille Maurer
The Honorable Joseph E. Owens
Montgomery County Delegation

You have asked us for an analysis of the impact of existing and proposed county legislation upon the Maryland Condominium Act, Title 11 of the Real Property Article ("RP" Article).

Specifically, you inquire:

(1) Whether existing county condominium law conflicts, in any fashion, with State law;

(2) Whether issues proposed for study by the Montgomery County Task Force are appropriate areas for supplemental county legislation, in light of the Condominium Act; and

(3) How State legislation might be clarified or amended to reduce ambiguity and better define the county's role in enacting condominium legislation.

In general, the Maryland Condominium Act preempts county condominium legislation if the local law concerns any subject or matter covered by the State law. RP §§11-122(b) and 11-141(c). However, if the local legislation falls within one of the four exceptions enumerated in RP §11-122(b), the local legislation will not be preempted; then, unless the local legislation is in conflict with State law, RP §11-141(c), the local legislation will be given effect.1 With one minor exception, the

1 RP §11-122(b) provides as follows:

"Except as otherwise expressly provided in §§11-130, 11-138, 11-139, and 11-140 of this title, the provisions of this title are statewide in their effect. Any law, ordinance, or regulation enacted by a county, city, or other jurisdiction is preempted by the subject and material of this title."

Montgomery County law as currently enacted fits clearly within the express exceptions of RP §11-122(b).

It is less clear, however, that topics now under study by the county are uniformly suitable areas for supplemental county legislation, given the General Assembly's overall emphasis on State preemption in the condominium field and the range of the Condominium Act. By way of illustration, we will discuss the proposed county "dispute resolution" bill, as well as several other problematic issues implicated by the Task Force work plan. In so doing, we hope to better define the scope of permissible supplemental legislation in the area of condominium law. At your express request, we also consider various proposals to clarify the Condominium Act in this regard.

I
Montgomery County Condominium Legislation

Chapter 11A of the Montgomery County Code was enacted in response to specific amendments made to the Maryland Condominium Act during the 1981 Legislative Session. In pertinent part, Chapter 246, Laws of Maryland 1981, authorized local governments (i) to take certain preventive steps to alleviate the displacement of tenants in rental facilities undergoing conversion; and (ii) to adopt, in the condominium field, more stringent consumer protection laws not inconsistent with State law.

RP §11-141(c) provides as follows:

"If the application of the provisions of this title conflict with the application of other provisions of the public general laws, public local laws, or any local enactment, in the State, the provisions of this title shall prevail."

For a review of the history of and interplay between these provisions, see generally 67 Opinions of the Attorney General 13 (1982).

A. Rental Housing Conversion

1. RP §11-138

RP §11-138 authorizes a local government to require that it be offered the right to purchase a rental facility slated for condominium conversion before any other purchaser. Section 11A-3 of the Montgomery County Code embodies the county's right of first refusal and is patterned extensively after the State law. In fact, the county law is more attentive to relocation hardships than State law, as it requires the county, on resale of the property after the 3-year retention period, to try to sell the facility to an entity that will also minimize displacement of resident tenants. See §11A-3(b)(6)b of the County Code.

2. RP §11-139

A local government also may provide itself with a right of first refusal as to the purchase of individual units in a facility undergoing condominium conversion. RP §11-139 authorizes county purchase of up to 20% of the total number of units, subject to the current tenant's option to buy. See RP §11-139(a)(3) and (b). With one apparent exception, §11A-4 of the Montgomery County Code carefully articulates county rights and obligations as a purchaser of condominium units under the RP §11-139 preemption exception.

Nevertheless, we note one troublesome area. Under §11A-4(b)(2), if a tenant in possession fails to exercise timely his or her option to buy the unit, or, alternatively, requests reimbursement for moving expenses, the county may exercise its right of first refusal.2 Section 11A-4(b)(3) then states:

"The purchase price, terms and conditions of the contract of sale of the unit to the county or its designated housing agency shall be no less favorable than the purchase price, terms and conditions of comparable units offered to tenants under section 11-136, Real Property Article, unless otherwise agreed by all parties to the contract of sale."

2 The tenant's option to buy is viable for 60 days following delivery of the notice of condominium conversion. RP §11-136(a)(2)(i) and (c)(2).

However, RP §11-136(e) expressly provides:

"If the offer terminates, the owner may not offer to sell that unit at a price or on terms and conditions more favorable to the offeree than the price, terms, and conditions offered to the tenant during the 180 day period following the giving of the notice required by §11-102.1."

Apparently, the State law guards against the forced displacement of tenants by an owner who charges inordinately high purchase prices, planning to then sell the empty facility to a developer or other buyer at a vastly more favorable price.3 However, §11A-4(b)(3) of the County Code would implicitly permit an owner to offer the county contract terms or prices substantially more favorable than those offered to tenants. This section thus seems to conflict directly with RP §11-136, the portion of the Condominium Act that establishes the general terms and conditions of all condominium conversion offerings.4

3 See also RP §11-136(a)(1): "The offer [to the tenant] shall be at a price and on terms and conditions at least as favorable as the price, terms, and conditions offered for that portion of the property to any other person during the 180 day period following the giving of the notice required by §11-102.1."

4 It is our understanding that §11A-4(b) tracked the language of former RP §11-139(c)(4), which has since been repealed and reenacted. See Chapter 836, Laws of Maryland 1982. We are informed, however, that §11A-4(b) will be redrafted to accord with current State law.

3. RP §11-140

The exception in RP §11-140 enables a county, upon finding a housing emergency caused by conversion of rental housing to condominiums, to grant extended leases to "designated households", including those families with elderly or handicapped members.5 In Montgomery County, "designated households" as defined by RP §11-137(a)(2) are eligible for lifetime leases. Furthermore, under §11A-5(b), other tenant households, less able to cope with displacement pressures, are also eligible for

5 Units occupied by designated households may not exceed 20% of the total number of units. RP §11-137(k)(1).

the three-year tenancy authorized by RP §11-140(b)(2)(ii). This type of legislative activity is contemplated, even encouraged, by the language of RP §11-140.

B. Consumer Protection Legislation

The fourth statutory exception to statewide preemption in the condominium field is RP §11-130. RP §11-130(d) provides:

"A county or incorporated municipality, or an agency of any of those jurisdictions, may adopt laws or ordinances for the protection of a consumer to the extent and in the manner provided for under §13-103 of the Commercial Law Article." ("CL" Article.)

A consumer is defined as "an actual or prospective purchaser, lessee, assignee or recipient of a condominium unit". RP §11-130(b)(1).

According to CL §13-103 and RP §11-130(d), therefore, a county may adopt legislation for the protection of individuals acquiring condominium units, if that legislation is consistent with and more stringent in its protection than the Consumer Protection Act. See 67 Opinions of the Attorney General 13 (1982). However, legislation enacted under this consumer protection exemption may not otherwise conflict with the Condominium Act. RP §11-141(c).

The remaining provisions of the Montgomery County condominium law relate intrinsically to the acquisition of units by "actual or prospective purchasers" and are clearly designed to protect individuals making such a substantial investment. For example, §11A-7 requires disclosure of additional information by the developer in the form of a "consumer guide". Section 11A-9 places an affirmative obligation on a developer to contribute to the condominium's reserve fund for common element repairs; in effect, this requirement prevents a disproportionate escalation of condominium fees on assumption of control by the condominium council.6 Section 11A-10 authorizes a tenant

6 The Maryland Condominium Act merely requires disclosure of the existence or absence of this fund. See RP §11-126(b)(5)(iii). Here, the county law is supplemental in nature, guarding against hidden costs incidental to the purchase of a newly converted unit.

organization to designate a professional engineer to verify the various conversion documents required by RP §11-126; again, this provision confers additional protection on prospective unit buyers, and is therefore within the scope of county legislative activity expressly permitted by RP §§11-122(b) and 11-130(d).

Nevertheless, we hesitate to construe the language of RP §11-130(d) as an unlimited grant of authority enabling a political subdivision to legislate in every area of condominium law. First, RP §11-141(c) expressly states that the Condominium Act "shall prevail" if the application of its provisions "conflict with the application of other provisions of the public general laws, public local laws, or any other local enactment". Thus, a political subdivision may not legislate in a fashion inconsistent with existing State law. Co. Council for Montgomery Co. v. Montgomery Assoc., Inc., 274 Md. 52, 59 (1975) (discussing City of Baltimore v. Sitnick & Firey, 254 Md. 303 (1969)).

Moreover, we believe that the exception in RP §11-130(d) must be confined to legislation specifically designed to protect a "consumer", as defined by RP §11-130(b)(1) and CL §13-101(c).7 In this context, the Consumer Protection Act's application to transactions involving the sale or provision of consumer goods and services is implicated. RP §11-130(c)(1) specifically refers to the "enforcement duties and powers" of the Consumer Protection Division of the Office of the Attorney General in policing violations of the Condominium Act. Presumably, the term "consumer", as used in RP §11-130(c), incorporates the basic scope and limitations of the Consumer Protection Act. In a similar fashion, RP §11-130(d), the consumer protection exception, may also be read to encompass both the acquisition of a unit and the unit owner's receipt of a range of commercially viable goods and services from and through the condominium's governing board. 67 Opinions of the Attorney General 13, 19 (1982). By contrast, if local legislation enacted under the consumer protection aegis involves neither the initial acquisition of a unit, nor the board's ongoing provision of goods or services to the condominium occupants, that legislation will

7 CL §13-101(c) defines consumer as "an actual or prospective purchaser, lessee, or recipient of consumer goods, consumer services, consumer realty, or consumer credit". Consumer goods and services are those goods and services that are "primarily for personal, household, family, or agricultural purposes". CL §13-101(d).

be preempted by the State condominium law. See RP §11-122(b); 67 Opinions of the Attorney General at 17-18.

In fact, as we noted in 67 Opinions of the Attorney General at 18 n. 5, the General Assembly deleted a proposed amendment to RP §11-122(b) that would have enabled political subdivisions to enact legislation to supplement generally provisions of the Condominium Act even beyond the four specifically enumerated areas. See Chapter 246, Laws of Maryland 1981, p. 1474.

C. Summary

To recapitulate, therefore: Any law, ordinance, or regulation affecting condominiums, enacted by a county, municipal corporation, or other jurisdiction, is preempted by the subject and material of the Maryland Condominium Act, unless that legislation clearly falls within one of the four exceptions enumerated in RP §11-122(b). And even legislation enacted pursuant to one of these exceptions may not conflict in any fashion with existing State law.

The exception most conducive to supplemental county legislation is RP §11-130, the consumer protection exception. RP §11-130(d) authorizes local legislation that is: (i) for the protection of a "consumer"; (ii) more stringent than the Consumer Protection Act; and (iii) not inconsistent with either the Consumer Protection Act or the Condominium Act.

With this in mind, we turn to an analysis of certain issues now under study by the Montgomery County Task Force.

II
The Task Force Proposals

A. Dispute Resolution

The Montgomery County Council is currently considering legislation to establish a compulsory dispute resolution mechanism for local condominiums, cooperatives, and homeowners' associations. The legislation is designed to provide "a new efficient, inexpensive and even-handed method for resolving

homeowners' disputes". Homeowners' Association Task Force (Group 1), Alternative Dispute Resolution for Condominiums, Cooperatives and Homeowner Associations (July, 1983), p. 14 ("Report").

But, as members of the Task Force recognize, the General Assembly has carefully circumscribed the authority of political subdivisions to legislate in the condominium field. Report at 36, 38. To the extent that the county legislation affects condominium affairs, it is preempted by the Maryland Condominium Act, unless, as explained above, the legislation (a) fits within one of four specific exceptions, and (b) does not conflict with the Condominium Act or other State law.

The avowed purposes behind the county dispute resolution proposal are: (i) to redress the inequity in legal and financial resources available to a board of directors as compared to a unit owner; (ii) to provide a disinterested, third-party arbiter not involved with the condominium regime; and (iii) to handle all disputes arising from association documents or agreements, including the declaration, bylaws, rules, and regulations. Report at 6, 8, 9, 14, 22, 25. Ostensibly, the proposal is cast as being authorized by RP §11-130(d), enacted for the protection of consumers.

However, the Condominium Act already details a condominium dispute mechanism "applicable to complaints or demands formally arising on or after January 1, 1982". RP §11-113(a). A public local law that creates an alternative mandatory dispute mechanism for condominiums would be in clear conflict with this preexisting Statewide provision and, as such, would be ineffective under RP §11-141(c).

Nonetheless, RP §11-113 does authorize condominiums to "opt out" of the statutory scheme if explicit dispute settlement mechanisms are incorporated into the documents creating the condominium regime. Whether county law may purport to "supplement" State law by, in effect, requiring a condominium to "opt out" through inclusion in its documents of a scheme that is mandated by local law, is a determination beyond the scope of this Opinion. See generally City of Baltimore v. Sitnick & Firey, 254 Md. 303 (1969).

Assuming, arguendo, that such supplemental legislation is permissible, RP §11-130(d) by its very nature limits the range of disputes that a county settlement mechanism may handle.

Because "consumer" is explicitly defined as "an actual or prospective purchaser, lessee, assignee or recipient of a condominium unit", RP §11-130(b), the county forum would be authorized to entertain only those issues germane to either (1) the acquisition of a unit; or (2) the provision of commercially valuable goods or services by the council or board to the unit owners. See CL §13-101(c); 67 Opinions of the Attorney General at 19. See also Report at 38.

Throughout the Condominium Act, the preemptive nature of the State law is emphasized. See, e.g., RP §11-122(b) and 11-141(c). We do not believe that the General Assembly intended RP §11-130(d) to be read as a broad exception to this general rule of Statewide uniformity.8 Supplemental county authority should therefore be limited by existing State law, by the careful definition of "consumer" in RP §11-130(b), as well as by the scope of the consumer protection laws, which are only applicable to transactions involving the sale of consumer goods and services. See CL §13-101(i) and (j) and §13-102. Matters beyond the finite scope of the consumer protection exception should be handled through the system already established by RP §11-113 or comparable condominium documents.9

8 If §§11-122(b) and 11-130(d) were read to authorize county legislative activity irrespective of existing law, the county would in effect be given carte blanche to supersede not only the Condominium Act, but also provisions of all other State law, including real property law, commercial law, and so on. We do not believe this result was intended.

9 For example, the maintenance and usage of condominium recreational areas clearly involves a condominium service otherwise available in the commercial business marketplace. By contrast, violation of a particular rule or bylaw that does not directly impact upon the acquisition of a unit or condominium service, per se, is arguably a matter of condominium governance and, as such, is outside county jurisdiction.

B. Other Task Force Proposals

Unfortunately, the Montgomery County Task Force work plan offers only the barest of topic outlines for our review. Nevertheless, our analysis remains consistent. If the proposed county legislation (1) affects matters already covered by the Condominium Act, and (2) is not reasonably related to "consumer" issues (the acquisition of a condominium unit or the

receipt of goods or services from the condominium's governing entity), that law is preempted.

By way of illustration, limitations on the number of non-residents who may serve on a condominium board of directors are, at most, only tangentially related to the "consumer" issues contemplated by RP §11-130; the same is true of matters affecting a condominium's declaration. Although perhaps cumbersome, the Condominium Act specifies that the appropriate method for dealing with such matters is by amendment to the particular condominium documents. See RP §§11-109(b), 11-104(e), and 11-103(c)(1).

On the other hand, topics directly related to the acquisition of a unit or the provision of condominium services may be eminently suitable for supplemental legislative activity, as long as such legislation is more stringent than the Consumer Protection Act and consistent with both the Consumer Protection Act and the Condominium Act. Warranty concerns, the public offering statement, certain voting provisions, and issues of developer accountability to prospective or actual unit purchasers are matters of this nature. We caution, however, that attention be given to relevant sections of the Condominium Act, as well as those of the Commercial Law and Corporations Articles. See RP §§11-109(d), 11-131, and 11-141(c).

We are troubled, moreover, by what appear to be proposals that might amount to impermissible restraints upon the alienation of property. For example, limitations on the sale of units to nonresident owners and requirements that rental leases be approved by the board of directors are both potentially repugnant to the absolute, fee simple nature of condominium unit ownership. Such clauses in effect give the condominium's governing entity unqualified and potentially arbitrary control over the use and disposition of individually owned property. See Real Estate Co. v. Serio, 156 Md. 229, 234-35 (1929); Kenney v. Morgan, 22 Md. App. 698, 704-06 (1974).

In contrast, statutes in other jurisdictions make the unit owner's right to sell or lease subject to the condominium governing board's right of first refusal. The owner is required to first offer the management body the right to lease or purchase the unit, before placing the property in the general market. See, e.g., Mass. Gen. Laws Ann., Chapter 183A, §12(c). See also Lyons v. King, 397 So.2d 964 (Fla. App. D4, 1981);

Backus v. Smith, 364 So.2d 786 (Fla. App. D1, 1978). This right of first refusal may not be exercised so as to restrict alienation because of race, color, creed, national origin, or sex. See, e.g., Mass. Gen. Laws, supra, §12(c). See also Montgomery Citizens League v. Greenhalgh, 253 Md. 151 (1969).

III
Alternative Legislative Proposals

You also ask how the Condominium Act might be clarified to minimize the confusion generated by concurrent State and county regulatory power in the condominium field.

In our view, one effective method of improving existing law would be to clarify the scope of the consumer protection exception. By specifying in the Condominium Act exactly which sections of the Act are to be treated as involving "consumer protection" issues subject to supplemental local legislation, the counties would be given clear guidance as to appropriate areas for legislative activity.10

Limitations of this nature, however, would also affect the enforcement jurisdiction of the Consumer Protection Division of the Office of the Attorney General. RP §11-130(c) now provides as follows:

"(1) To the extent that a violation of any provision of this title affects a consumer, that violation shall be within the scope of the enforcement duties and powers of the Division of Consumer Protection of the office of the Attorney General, as described in Title 13 of the Commercial Law Article.

(2) The provisions of this title shall otherwise be enforced by each agency of the State within the scope of its authority."

10 Some sections that are clearly consumer oriented in focus are as follows: §11-102.1 (notice of conversion); §11-126(f) (disclosure requirements); §11-131 (warranties); §11-136 (tenant's right of first refusal); and §11-137 (designated households). This list is by no means exhaustive.

As presently drafted, RP §11-130(c) and (d) are closely tied. Under current law, for example, a developer's failure to make necessary disclosures on the public offering statement or a council's refusal to maintain property and liability insurance may become an issue for Consumer Protection Division or county agency intervention. Unless otherwise provided, a legislative proposal to limit or refine the meaning of "consumer" will necessarily affect both the ability of local jurisdictions to legislate under the RP §11-130(d) exception and the scope of the Consumer Protection Division's existing enforcement powers and duties. In examining how the current law may be improved, you may wish to sever the present linkage between RP §11-130(c) and (d).

At the other extreme, the General Assembly could eliminate the RP §11-130(d) consumer protection exception in its entirety, effectively preempting this aspect of supplemental county legislation. See County Council for Montgomery County v. Montgomery Association, Inc., 274 Md. 52 (1975); 67 Opinions of the Attorney General at 17-18.

A less extreme alternative would be to expressly authorize counties to enact supplemental legislation in areas not covered by the Condominium Act, in order to correct real property abuses unique to a given locale. See, e.g., Sitnick & Firey, 254 Md. at 317, 324-25; 63 Opinions of the Attorney General 377, 388-89 (1978). See also Mayor and Council of Forest Heights v. Frank, 291 Md. 331, 337 (1981). At present, unless one of the four exceptions enumerated in §11-122(b) applies, local legislation is preempted by the "subject and material" of the Condominium Act. See RP §11-122(b).

IV
Conclusion

In summary, the Maryland Condominium Act preempts county condominium legislation on any subject or matter that is addressed by the State law. However, local legislation enacted pursuant to RP §11-130, §11-138, §11-139, or §11-140 is not so preempted, and is effective, unless it conflicts with existing State law. It is our opinion that, for the most part, those

sections of the current Montgomery County Code regulating condominium conversions are both expressly authorized by and in compliance with the Condominium Act.

We have attempted here to clarify the meaning and impact of the consumer protection exception contained in RP §11-130. This exception authorizes counties to enact legislation for the protection of a consumer, as defined by RP §11-130(b) and CL §13-101(c). In this context, a county may legislate with regard to (i) the actual or prospective acquisition of a condominium unit, and (ii) the ongoing provision of goods and services to the unit owners by the condominium's governing entity.

Stephen H. Sachs, Attorney General
Eleanor M. Carey, Deputy Attorney General
Lynette M. Phillips, Staff Attorney, Opinions and Advice
Avery Aisenstark, Chief Counsel, Opinions and Advice

Editor's Note: The preceding Opinion was originally written as a letter of advice. Because of the special problems and issues discussed, it is published here in a slightly revised format.