What is a Leisure World of Maryland Mutual
and why do they exist?
“Mutual” is the original designation given to each of the separate housing associations built in Leisure World of Maryland. The first four Mutuals were Cooperatives; they were later legally consolidated into a single Cooperative corporation (Montgomery Mutual, Inc.), comprising 898 units.
There are also many Condominiums in Leisure World, which were incorporated separately. All Mutuals became members of the Leisure World Community Corporation and the Board of Directors. The transfer of power to the unit owners is governed by section 11-109(c)(15) of the Maryland Condominium Act. Each Mutual maintains full legal powers over its own property and may make its own decisions on the size of its budget, its reserves and investments, maintenance policies, house rules, and the like. Each Mutual may choose to transfer or delegate its powers to management staff or anyone else. By signing the Instrument of Adoption, a Mutual naturally becomes subject to the provisions of the Trust Agreements, but those apply to community facilities and not to the internal workings of the Mutual.
As a Trustor, the Mutual is, of course, obliged to pay a fraction of the expenses of the community (Trust) facilities, as determined each year by the Board of Directors, in accordance with the Trust Agreements. Those expenses are included in the budgets of the individual Mutuals, and the budgets determine the assessments payable by individual owners. The mandatory charges of the Trust thus are obligations of the Trustors (Mutuals), not the individual residents. Trust charges directly applicable to those persons are voluntary, in the sense that they are payable only for special community facilities or services provided by the central management at the option of the recipient. They include, for example, so-called user fees for the golf course, swimming pool, meeting rooms, and private dining rooms; charges for nursing visits; and charges for certain appliance repairs and maintenance of individual housing units not payable out of a Mutual’s treasury.
On the other hand, the Trust Agreements give certain legal powers to the Mutuals. A number of important decisions may be made under the Trust Agreements only with the consent of all or a specified majority of the Mutuals (Trustors), each acting through its respective board of directors. For example, the Trust budget may not be increased from year to year beyond a certain amount without the approval of all the Trustors, and the Trustee may not submit a plan of operation that includes any substantial change in community services from those specified in Schedule A of the Trust Agreement of 1966, unless the change is approved by at least two-thirds of the Trustors, each acting through its board.
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