The Maryland Contract Lien Act and its Effect on Condominium and Homeowner Associations

Condominiums and homeowners associations do not have “continuing liens” for future charges. Many condominiums and homeowners associations have recorded documents (e.g., declarations) that permit charging owners of properties for such things as assessments, dues, late charges and attorney’s fees. The Maryland Contract Lien Act (Real Property §14-201 et seq., “MCLA”) allows condominiums and homeowners associations to place liens on properties of their residents. The Court of Appeals recently issued a decision styled as In re Walker, 473 Md. 68 (2021) that interpreted MCLA.

That decision holds that a recorded lien cannot include amounts that become due after the lien was recorded. The lien can only include amounts that are then due. If additional amounts become due after the filing of the lien, then another lien must be filed to secure those amounts. It is anticipated that this decision will cause changes in the practices of many condominiums and homeowners associations.

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