What this means for homeowners

The Maryland Contract Lien Act is the machinery. A condominium's or homeowners association's power to collect comes from its own statute. Real Property § 11-110(d)(1) lets a condominium enforce payment of assessments, interest, late charges, costs of collection and reasonable attorney's fees by a lien “in accordance with the provisions of the Maryland Contract Lien Act”; § 11B-117(b) sends a homeowners association's assessments and charges the same way, in accordance with the Maryland Contract Lien Act. This is that Act, all seven sections.

What can be liened, and for what

A lien may be created by a contract and enforced here — the two conditions read as prerequisites — if the contract expressly provides for the creation of a lien and expressly describes both the party entitled to establish and enforce it and the property it may be imposed on (§ 14-202(a)). No express lien provision, no lien under this subtitle.

“Contract” (§ 14-201(b)) means a real covenant running with the land, or a contract recorded among the land records, and includes a declaration or bylaws recorded under the Maryland Condominium Act or the Maryland Real Estate Time-Sharing Act, and a regulated sustainable energy contract recorded under State Government Title 9, Subtitle 20D. The Homeowners Association Act is not named in that list — it does not have to be: a recorded HOA declaration already fits § 14-201(b)(1) as a contract recorded among the land records (and as a covenant running with the land), and § 11B-117 routes homeowners association assessments through this subtitle by name.

A lien may secure only four things (§ 14-202(b)):

Damages — defined in § 14-201(c) as unpaid sums due under the contract plus interest accruing on them under the contract or as provided by law, including fines levied under the Condominium Act or the Time-Sharing Act. It expressly does not include consequential or punitive damages.
Costs of collection.
Late charges permitted by law. The cap is not in this Act — it is $15 or one-tenth of the delinquent amount, whichever is greater, once per delinquency and only after 15 calendar days.
Attorney's fees provided for in the contract or awarded by a court for its breach.

Note the interaction between item 1 and § 14-204(d) below: fines can be secured by the lien, and cannot be the basis for foreclosing it.

The notice, and the 30-day window that follows it

Section 14-203 is the part an owner has to know, because it is the only point at which the process is easy to stop.

The two-year outer limit. A party seeking to create a lien must give written notice within 2 years of the breach. Service is by certified or registered mail, return receipt requested, to the owner's last known address, or by personal delivery. Only if neither works may the party mail the notice to the last known address and post it conspicuously on the property in the presence of a competent witness — on a building, on the door or other front part.

What the notice must contain (§ 14-203(b)): the name and address of the party seeking the lien; a statement of intent to create a lien; an identification of the contract; the nature of the alleged breach; the amount of alleged damages; a description of the property sufficient to identify it and the county it is in; and a statement that the owner has the right to a hearing. A notice missing any of these is not a compliant notice.

Thirty days to answer. Under § 14-203(c), the owner may, within 30 days after the notice is served, file a complaint in the circuit court for the county where any part of the property is, to determine whether probable cause exists to establish the lien. The complaint needs the names of both parties, a copy of the notice, and an affidavit stating facts that would preclude the lien for the damages alleged — and the owner may request a hearing at which any party may present evidence.

And then the burden flips. Section 14-203(d): “If a complaint is filed, the party seeking to establish the lien has the burden of proof.” The association must prove its case; the owner does not have to disprove it. If no complaint is filed, no one tests the claim at all before it reaches the land records.

On a complaint the court reviews the pleadings and any supplementary affidavit — and holds a hearing if one was requested — and, if it finds probable cause, orders the lien imposed. The order must state an amount of bond the owner may file to have the lien removed — and until an order imposing the lien is entered, the owner may remove it at any time by filing that bond with the clerk. The court may award costs and reasonable attorney's fees to any party (§ 14-203(i)(2)) — either party.

Recording, and the deadlines that discipline it

Once the court has ordered the lien, or once the owner's 30 days have passed without a complaint, the claimant may file a statement of lien among the land records of every county holding part of the property — but not before 30 days from the court order, or from service of the notice where no complaint was filed.

The 90-day forfeiture. Unless the parties agree otherwise, if the claimant does not file the statement of lien within 90 days after that waiting period expires, it may not file at all on that notice — it has to start over and comply with the whole of subsections (a) to (h) again.

Priority runs from filing, not from the breach and not from the notice (§ 14-203(h)(4)). And if the court denies the lien, or a bond is filed, the clerk enters a notation in the land records releasing it.

Section 14-203(j) sets out the form of the statement of lien, affirmed under penalty of perjury. There is a second form for a lien subject to § 11-110(f) or § 11B-117(c) — the super-priority slice — which is sufficient if it also states the amount that is the basis of the priority portion, how many months of unpaid regular assessments that represents, and the amount per month.

Foreclosure — and the fines that cannot get you there

Section 14-204(a): a lien may be enforced and foreclosed in the same manner, and subject to the same requirements, as the foreclosure of a mortgage or deed of trust containing a power of sale or an assent to a decree. If the owner is personally liable, a suit for any deficiency following foreclosure may be brought in the same proceeding, and a suit for a money judgment does not waive the lien. An action to foreclose must be brought within 12 years of recording the statement of lien.

Subsection (d) is the one to read twice. It applies to a common ownership community — a condominium as defined in § 11-101 or a homeowners association as defined in § 11B-101 — and it applies “[n]otwithstanding the declaration, articles of incorporation, bylaws, rules, or regulations”, so the governing documents cannot take it back. A governing body may foreclose on a lien against a unit or lot owner only if the damages secured by the lien:

consist of delinquent periodic or special assessments and any interest, plus reasonable costs and attorney's fees directly related to the filing of the lien that do not exceed the amount of the delinquent assessments, excluding interest; and
do not include fines imposed by the governing body, or attorney's fees or costs related to recovering those fines.

So a foreclosure driven by accumulated violation fines, or by legal fees that have outgrown the assessments themselves, is outside what subsection (d) permits. What it does not do is erase the debt: § 14-204(d)(3) says the subsection “does not preclude a governing body from using any other means to enforce a lien” — a personal money judgment among them.

Two sections that mark the edges

Section 14-203.1 bars a lien on owner-occupied residential property, by contract or by breach of contract, for the payment of medical debt, and requires a court to remove one created in violation. Medical debt is a debt owed by a consumer to a person whose primary business is providing medical services, products or devices, or to their agent or assignee, for the provision of those services, products or devices; it excludes credit card debt unless the card was issued under an open-end or closed-end credit plan offered solely for the payment of health care services.

Section 14-205 is one line: the subtitle does not apply to land installment contracts, or to deeds of trust or mortgages. Those have their own foreclosure law. And § 14-206 is the short title.

How this fits with Maryland's other HOA law

The power comes from the association statute; the procedure comes from here. Real Property § 11-110(d)(1) lets a condominium enforce payment of assessments, interest, late charges, costs of collection and reasonable attorney's fees “by the imposition of a lien on a unit in accordance with the provisions of the Maryland Contract Lien Act”, and § 11B-117 does the same for a homeowners association. Both are reproduced in full on the Condominium Act and Homeowners Association Act pages.

The super-priority slice is in those statutes, not in this one. On foreclosure of a first mortgage or deed of trust recorded on or after 1 October 2011, part of the association's lien takes priority over the lender: not more than 4 months of unpaid regular assessments for common expenses, capped at $1,200. That priority is lost if the governing body fails to give a requesting lender written information about it within 30 days of filing the statement of lien. This Act's contribution is § 14-203(j)(2), which requires the statement of lien itself to spell out the amount that is the basis of the priority portion and the number of months behind it.

Cooperatives are outside all of this. Under Corporations and Associations § 5-6B-16 a cooperative interest is personal property, and this subtitle reaches a real covenant running with the land or a contract recorded among the land records. There is no assessment lien on a co-op home and no super-lien; the pressure point is eviction, which § 5-6B-31 restrains — but only in a project no longer subject to a mortgage or deed of trust, where it requires three months' delinquency, notice, a hearing and a chance to cure. See the Cooperative Housing Corporation Act page.

How the collection is conducted is a different statute. The Maryland Consumer Debt Collection Act governs the conduct of whoever is collecting — including the association itself, since its definition of “collector” has no carve-out for the party owed the money. Threatening to enforce a right known not to exist is item (8) on its list, and a foreclosure threat that § 14-204(d) does not permit is exactly the shape of that item.

Contents · 7 sections ▾

§ 14-201Definitions
§ 14-202Creation of lien by contract
§ 14-203Creation of lien as result of breach of contract
§ 14-203.1Creation of lien for breach of contract for medical debt payment
§ 14-204Enforcement and foreclosure of lien
§ 14-205Exemptions
§ 14-206Short title

No sections match that filter.

Maryland Contract Lien Act

§ 14-201 Definitions(a) In this subtitle the following words have the meanings indicated unless the context requires otherwise.
(b) (1) “Contract” means a real covenant running with the land or a contract recorded among the land records of a county or Baltimore City.
(2) “Contract” includes a:
(i) Declaration or bylaws recorded under the provisions of the Maryland Condominium Act or the Maryland Real Estate Time-Sharing Act; or
(ii) Regulated sustainable energy contract recorded under the provisions of Title 9, Subtitle 20D of the State Government Article.
(c) (1) “Damages” means unpaid sums due under a contract, plus interest accruing on the unpaid sums due under a contract or as provided by law, including fines levied under the Maryland Condominium Act or the Maryland Real Estate Time-Sharing Act.
(2) “Damages” does not include consequential or punitive damages.
(d) “Lien” means a lien created under this subtitle.
(e) “Party” means any person who:
(1) Is a signatory to a contract;
(2) Is described in a contract as having the benefit of any provision of the contract; or
(3) Owns property subject to the provisions of a contract.
(f) “Statement of lien” means the statement described under § 14-203(j) of this subtitle.

§ 14-202 Creation of lien by contract(a) A lien on property may be created by a contract and enforced under this subtitle if:
(1) The contract expressly provides for the creation of a lien; and
(2) The contract expressly describes:
(i) The party entitled to establish and enforce the lien; and
(ii) The property against which the lien may be imposed.
(b) A lien may only secure the payment of:
(1) Damages;
(2) Costs of collection;
(3) Late charges permitted by law; and
(4) Attorney’s fees provided for in a contract or awarded by a court for breach of a contract.

§ 14-203 Creation of lien as result of breach of contract(a) (1) A party seeking to create a lien as the result of a breach of contract shall, within 2 years of a breach of contract, give written notice to the party against whose property the lien is intended to be imposed.
(2) Except as provided in paragraph (3) of this subsection, notice under this subsection shall be served by:
(i) Certified or registered mail, return receipt requested, addressed to the owner of the property against which the lien is sought to be imposed at the owner’s last known address; or
(ii) Personal delivery to the owner by the party seeking a lien or the party’s agent.
(3) If a party seeking to create a lien is unable to serve an owner under paragraph (2) of this subsection, notice under this subsection shall be served by:
(i) The mailing of a notice to the owner’s last known address; and
(ii) Posting notice in a conspicuous manner on the property by the party seeking to create a lien or the party’s agent in the presence of a competent witness. In the instance of a contractual lien on a building, the notice shall be posted in a conspicuous manner on the door or other front part of the building.
(b) A notice under subsection (a) of this section shall include:
(1) The name and address of the party seeking to create the lien;
(2) A statement of intent to create a lien;
(3) An identification of the contract;
(4) The nature of the alleged breach;
(5) The amount of alleged damages;
(6) A description of the property against which the lien is intended to be imposed sufficient to identify the property, and stating the county or counties in which the property is located; and
(7) A statement that the party against whose property the lien is intended to be imposed has the right to a hearing under subsection (c) of this section.
(c) (1) A party to whom notice is given under subsection (a) of this section may, within 30 days after the notice is served on the party, file a complaint in the circuit court for the county in which any part of the property is located to determine whether probable cause exists for the establishment of a lien.
(2) A complaint filed under this subsection shall include:
(i) The name of the complainant and the name of the party seeking to establish the lien;
(ii) A copy of the notice served under subsection (a) of this section; and
(iii) An affidavit containing a statement of facts that would preclude establishment of the lien for the damages alleged in the notice.
(3) A party filing a complaint under this subsection may request a hearing at which any party may appear to present evidence.
(d) If a complaint is filed, the party seeking to establish the lien has the burden of proof.
(e) The clerk of the circuit court shall docket the proceedings under this section, and all process shall issue out of and all pleadings shall be filed in a single action.
(f) Before any hearing held under subsection (c) of this section, the party seeking to establish a lien may supplement, by means of an affidavit, any information contained in the notice given under subsection (a) of this section.
(g) (1) If a complaint is filed under subsection (c) of this section, the court shall review any pleadings filed, including any supplementary affidavit filed under subsection (f) of this section, and shall conduct a hearing if requested under subsection (c)(3) of this section.
(2) If the court determines that probable cause exists to establish a lien, it shall order the lien imposed.
(3) The order to impose a lien shall state that the owner of the property against which the lien is imposed may file a bond of a specified amount to have the lien against the property removed.
(h) (1) If the court orders a lien to be imposed under subsection (g) of this section, or if the owner of the property against which a lien is intended to be imposed fails to file a complaint under subsection (c) of this section the party seeking to create the lien may file a statement of lien among the land records of each county in which any portion of the property is located.
(2) The party seeking to create the lien may file the lien statement in the county land records:
(i) If a complaint was filed under subsection (c) of this section, 30 days after the date of the court order allowing the creation of the lien; or
(ii) If a complaint was not filed under subsection (c) of this section, 30 days after the owner was served under subsection (a)(2) or (3) of this section.
(3) Unless the party seeking to create the lien and the owner agree otherwise, if the party seeking to create the lien fails to file the lien statement within 90 days after the expiration of the applicable time period described in paragraph (2) of this subsection, the party seeking to create the lien may:
(i) Not file the lien statement in the county land records; and
(ii) File for a new lien by complying with the requirements of subsections (a) through (h) of this section.
(4) A lien imposed under this subtitle has priority from the date the statement of lien is filed.
(5) Until an order imposing a lien is entered by the court, the owner of the property against which the lien is imposed may have the lien removed at any time by filing with the clerk of the circuit court a bond in the amount specified by the court under subsection (g)(3) of this section.
(i) (1) Until an order is entered by the court either establishing or denying a lien, the action shall proceed to trial on any matter at issue.
(2) The court may award costs and reasonable attorney’s fees to any party under this subtitle.
(j) (1) Subject to paragraph (2) of this subsection, a statement of lien is sufficient for purposes of this subtitle if it is in substantially the following form: STATEMENT OF LIEN This is to certify that the property described as __________ is subject to a lien under Title 14, Subtitle 2 of the Real Property Article, Maryland Annotated Code, in the amount of $__________. The property is owned by ____________________. I hereby affirm under the penalty of perjury that notice was given under § 14-203(a) of the Real Property Article, and that the information contained in the foregoing statement of lien is true and correct to the best of my knowledge, information, and belief. ______________________________ (name of party claiming lien)
(2) (i) This paragraph applies only to a lien that is subject to § 11-110(f) or § 11B-117(c) of this article.
(ii) In addition to satisfying the requirements of paragraph (1) of this subsection, a statement of lien is sufficient for purposes of this subtitle if the statement includes specific information about the amount of the regular monthly assessments, or the equivalent of the regular monthly assessments, for common expenses in substantially the following form: The amount of the regular monthly assessments, or the equivalent of the regular monthly assessments, for common expenses, that is the basis of the priority portion of this lien as provided in § 11-110(f) or § 11B-117(c) of the Real Property Article, is $_________. This sum represents ________ months of unpaid regular assessments, at $________ per month.
(k) If an order is entered under subsection (i) of this section denying a lien, or if a bond is filed under subsection (h) of this section, the clerk of the circuit court shall enter a notation in the land records releasing the lien.

§ 14-203.1 Creation of lien for breach of contract for medical debt payment(a) (1) In this section the following words have the meanings indicated.
(2) (i) “Medical debt” means a debt owed by a consumer to a person whose primary business is providing medical services, products, or devices, or to the person’s agent or assignee, for the provision of the medical services, products, or devices.
(ii) “Medical debt” does not include debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered solely for the payment of health care services.
(3) “Owner-occupied residential property” has the meaning stated in § 7-105.1 of this article.
(b) A lien on owner-occupied residential property may not be created by contract or as a result of a breach of contract for the payment of medical debt.
(c) If a lien is created in violation of this section, the court shall remove the lien.

§ 14-204 Enforcement and foreclosure of lien(a) Except as provided in subsection (d) of this section, a lien may be enforced and foreclosed by the party who obtained the lien in the same manner, and subject to the same requirements, as the foreclosure of mortgages or deeds of trust on property in this State containing a power of sale or an assent to a decree.
(b) If the owner of property subject to a lien is personally liable for alleged damages, suit for any deficiency following foreclosure may be maintained in the same proceeding, and suit for a monetary judgment for unpaid damages may be maintained without waiving any lien securing the same.
(c) Any action to foreclose a lien shall be brought within 12 years following recordation of the statement of lien.
(d) (1) (i) In this subsection the following words have the meanings indicated.
(ii) “Common ownership community” means:
1. A condominium as defined in § 11-101 of this article; or
2. A homeowners association as defined in § 11B-101 of this article.
(iii) “Governing body” means a person who has authority to enforce the declaration, articles of incorporation, bylaws, rules, or regulations of a common ownership community.
(2) Notwithstanding the declaration, articles of incorporation, bylaws, rules, or regulations of a common ownership community, a governing body may foreclose on a lien against a unit owner or lot owner only if the damages secured by the lien:
(i) Consist of:
1. Delinquent periodic assessments or special assessments and any interest; and
2. Reasonable costs and attorney’s fees directly related to the filing of the lien that do not exceed the amount of the delinquent assessments, excluding any interest; and
(ii) Do not include fines imposed by the governing body or attorney’s fees or costs related to recovering the fines.
(3) This subsection does not preclude a governing body from using any other means to enforce a lien against a unit owner or lot owner.

§ 14-205 Exemptions

The provisions of this subtitle do not apply to land installment contracts or to deeds of trust or mortgages on property in this State.

§ 14-206 Short title

This subtitle may be cited as the Maryland Contract Lien Act.

Source. Reproduced from the official text of the Annotated Code of Maryland, the Maryland Contract Lien Act (Md. Code, Real Property §14-201 to §14-206), as published by the General Assembly of Maryland. Section headings are from the Michie’s Annotated Code table of contents; the General Assembly’s own compilation prints none. General information, not legal advice; the statutes are amended every session, so confirm the current text against the official source.

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