Opinion ID: 2319221
Heading Depth: 1
Heading Rank: 2

Heading: The Annapolis Towne Centre and The Purchase Agreement

Text: Annapolis Towne Centre at Parole, LLC (ATC), the Respondent, is the owner and developer of a 33-acre, mixed-use development known as the Annapolis Towne Center at Parole (the Development). As contemplated by ATC, the entire project would be declared a land condominium pursuant to the Maryland Condominium Act. See Maryland Code, (1974, 2003 Repl. Vol.), § 11-101, et seq. of the Real Property Article. The units of ATC's land condominium were a mixture of office, retail, and residential parcels. [2] The Development also had one additional and unusual featurethe Declaration and plat showed a nominal common element of only one square foot. Areas that would typically be included in a common area were instead designated as the Common Facilities Parcel. [3] ATC retained ownership of the Common Facilities Parcel even after the other parcels were sold, and planned to pay for its upkeep by collecting annual common area maintenance (CAM) fees from each of the parcel owners. This case deals with Parcel 14 and Parcel 15, residential parcels at the western end of the development, abutting Riva Road. As with the other residential parcels, ATC sought a residential developer to purchase these parcels and construct residential towers and parking garages. Petitioner Hovnanian Land Investment Group, LLC (Hovnanian), [4] a residential developer who, on March 3, 2005, entered into a Purchase and Development Agreement (the Purchase Agreement) with HTC for Parcels 14 and 15. Under the Purchase Agreement, Hovnanian was to construct three residential towers on the properties, containing 550 residential units, each with a minimum of 1,300 net useable square feet. Section 14 of the Purchase Agreement, titled Seller's Undertakings, required ATC to meet certain obligations prior to the closing. Relevant here, Section 14(d) addressed the funding of common area maintenance (CAM): ... [ATC] shall be solely responsible for... recording a declaration (the Declaration) for the maintenance of the common areas of the Development[ [5] ].... The Declaration ... shall provide annual assessments against the office and retail portions of the Development for the purpose of providing funds for the maintenance of the office and retail buildings and associated common areas.... The Declaration ... shall also provide that each owner of a condominium unit shall pay an annual fee of [$1,200], which annual fee shall increase at the rate of three percent (3%) per annum to be calculated on a per diem basis. (Emphasis added). [6] The Purchase Agreement thus required ATC to establish predetermined CAM fees for Hovnanian's parcel, and provide CAM funding for the other parcels. The Purchase Agreement stated that Hovnanian's obligation to go to closing shall be conditioned upon completion of the conditions precedent, and gave Hovnanian certain remedies in case ATC failed to meet them: If [ATC] is unable or unwilling to complete or fulfill its obligations as set forth ... for the parcels to be closed upon, [Hovnanian] may at its option (i) close on said parcels to be closed upon notwithstanding [ATC's] failure but without waiving [ATC's] obligations to perform hereunder, or (ii) delay the applicable Closing until after [ATC] has satisfied its obligations, or (iii) terminate this Agreement and have its Deposit returned[.] The Purchase Agreement also contained a non-waiver clause: No change or modification of this Agreement shall be valid unless the same is in writing and signed by Purchaser and Seller. No purported or alleged waiver of any of the provisions of this Agreement shall be binding or effective unless in writing and signed by the party against whom it is sought to be enforced.