Legal Question in Real Estate Law in Maryland

The condominium association where i live is using condo fees to operate an llc.There is nothing in the bylaws that would address this matter. Is this legal?


Asked on 12/19/10, 5:04 am

1 Answer from Attorneys

Phillip M. Cook Cook Legal Services, LLC

Good question. I'm reading a lot into your question, but it sounds like you are a little confused as to how a condo association is legally created.

When a developer builds a condominium (for example, let's call it Highland Condominiums), the developer has the right to organize/create an LLC for the purpose of operating/managing the Condominium. The LLC would be called something like Highland Condominiums Association, LLC. The LLC would likely comprised of a board of directors and officers (president, vice president, treasurer/secretary, perhaps a member-at-large, etc.).

The developer will usually have the power to act as the board of directors and officers until a certain time in the future. For instance, until the developer has sold a certain percentage (or all) of the condo units, or until a date specific such as December 31, 2020. Once that certain event happens, the Developer hands control of the association over to the condo owners. The condo owners get together and elect a board of directors, who appoint officers.

The powers of these people are found in your Declaration of Condominium and condo Bylaws. One of these powers is almost always the power to levy and collect condo fees and use/allocate those condo fees to operate the condo.

If you have a specific question about how the money is being used, speak with a Maryland real estate attorney who has community association law experience (like me!) and can address your question more specifically.

Best of luck.******The above is for informational purposes only and does not create an attorney-client privilege.*******

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Answered on 12/24/10, 5:47 am


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