HOA and condo association foreclosure in Maryland

HOA and condo collection rules in Maryland, step by step

• Which law covers your community

  Check your recorded declaration

  Condos are governed by the Maryland Condominium Act, Real Property title 11, and homeowners associations by the Maryland Homeowners Association Act, Real Property title 11B. Both use the Maryland Contract Lien Act, Real Property title 14, subtitle 2, to put a lien on your home for unpaid assessments.

  Md. Code, Real Prop. §§ 11-110(d), 11B-117(b), 14-204(d)

• Notice of intent to create a lien

  Within 2 years of the missed payment

  Before a lien is recorded, the association must give you written notice by certified or registered mail or personal delivery. The notice must name the association, state the amount claimed, describe the property, and say you have a right to a hearing. If notice cannot be served that way, it can be mailed and posted on the property.

  Md. Code, Real Prop. § 14-203(a), (b)

• Your 30 days to ask a court for a hearing

  30 days after you are served

  You can file a complaint in the circuit court within 30 days to have a judge decide whether there is probable cause for the lien, with an affidavit of facts showing why it should not be imposed. The association then has the burden of proof. If you do not file, it can record a statement of lien 30 days after service, and the lien ranks from the day it is filed.

  Md. Code, Real Prop. § 14-203(c), (d), (h)

• No foreclosure over fines

  Any time

  Whatever the community documents say, an association can foreclose a lien only for delinquent regular or special assessments and interest, plus reasonable costs and attorney's fees tied to filing the lien that are no more than the delinquent assessments. Fines, and fees for collecting fines, cannot be part of a foreclosure. The association can still use other ways to collect.

  Md. Code, Real Prop. § 14-204(d)

• Foreclosure follows mortgage rules

  Within 12 years after the lien is recorded

  A lien is foreclosed in the same manner, and under the same requirements, as a Maryland mortgage or deed of trust with a power of sale or assent to a decree. Any foreclosure must be brought within 12 years after the statement of lien is recorded. See our Maryland pages on how foreclosure works for those steps.

  Md. Code, Real Prop. § 14-204(a), (c)

• Limited priority over your first mortgage

  When a lender forecloses a first mortgage recorded on or after Oct. 1, 2011

  Up to 4 months of unpaid regular assessments, no more than $1,200, can come ahead of the first mortgage. Interest, late charges, fines, attorney's fees, collection costs and special assessments are not included. The association loses this priority if it does not give the lender the required information within 30 days after filing the lien.

  Md. Code, Real Prop. §§ 11-110(f), 11B-117(c)

• Caps on interest and late fees

  After 15 days late

  A late charge can be no more than $15 or one tenth of the late payment, whichever is greater, charged only once per late payment and only after 15 calendar days. Condo assessments can carry interest of up to 18% a year. A condo can demand the rest of the year's assessment only after a 15-day warning notice.

  Md. Code, Real Prop. §§ 11B-112.1, 11-110(e)

Common questions in Maryland