The Maryland General Assembly has passed amendments to the Maryland Contract Lien Act that effect the foreclosure of liens by condominiums and homeowners associations. The changes to Section 14-204 of the Real Property Article of the Maryland Annotated Code prohibit condominiums and homeowners associations from foreclosing on liens for anything other than delinquent periodic or special assessments; meaning that unpaid fines may not be the basis for a lien foreclosure. Additionally, the new law requires that related costs and fees be limited to “reasonable costs and attorney’s fees directly related to the filing of the lien and not exceeding the amount of the delinquent assessments”.
Both the Senate and House of Delegates had previously passed similar bills, but the House version had included cooperative housing corporations within the scope of the legislation. The bills were reconciled in committee, with cooperatives being eliminated in accordance with the Senate version. Late amendments added “reasonable costs,” and provided that costs and fees not exceed the amount of the principal amount of the unpaid assessment. The legislation expressly provides that these provisions do not preclude the use of other means to enforce a lien other than foreclosure. Accordingly, suits for money judgments can still be pursued.
