Can an HOA Enforce Payment Fees in Maryland?
Residents and homeowners associations (HOAs) have specific rights and responsibilities. Residents are liable for fees and charges that arise while they own their property. HOA fees have an important purpose. They cover a range of services that make the community safe and clean and can include everything from waste and snow removal to maintenance for pools, playgrounds, and clubhouses. If a resident falls behind on their fees, or refuses to pay at all, Maryland HOAs can enforce payments under the law.
Most HOA communities have their own guidelines for residents who do not pay assessments. They might be banned from using pools, clubhouses, and other amenities, for example. In addition to community-specific regulations, state law empowers HOAs in Maryland to take further action against a non-paying resident. They can place a lien against the property for delinquent fees and other costs associated with the process.
An HOA lien remains attached to the property until these fees are satisfied, which will hinder the owner’s ability to refinance or sell. If the property owner continues to default on their assessments, the HOA can sue for the money owed and/or foreclose its lien.
Foreclosure on Liens for Unpaid Assessments
It is a common misconception that foreclosure cannot happen if the property owner is current on their mortgage. That is not the case. Lien priority determines the outcome of the foreclosure process.
In Maryland, an HOA has 12 years from the date the statement of lien is recorded to initiate the foreclosure process. A foreclosure gives the HOA the right to force a sale to a new owner. All of this information and more can be found in the association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs).
What Is Lien Priority?
A single property can have multiple liens. Lien priority refers to the order in which lienholders get paid when a foreclosed property is sold. Typically, liens follow a “first in time, first in right” principle that gives preference to the first lien recorded. However, this order can possibly be adjusted according to the association CC&Rs or state law. It is also possible for a lienholder to get nothing at all if they are at the bottom of the priority list.
Ocean City HOA Attorneys at Oliveri & Larsen Help HOAs Collect Assessments From Delinquent Owners
HOA fees are essential in helping communities operate as intended, with access to all the services and amenities residents expect. Our Ocean City HOA attorneys at Oliveri & Larsen represent associations in enforcing delinquent fees in a timely and efficient manner. To learn more about our legal services, call us at 410-295-3000 or contact us online. Located in Annapolis, Maryland, our legal team represents clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.