In re: Walker and Walker
473 Md. 68 (2021)
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Rule of Law:
The Maryland Contract Lien Act (MCLA), Md. Code Ann., Real Prop. §§ 14-201–206, does not authorize the creation of a 'continuing lien' for a community association. A lien perfected under the MCLA only secures the specific amount of unpaid damages, costs, and fees that are due and owing at the time the lien is recorded, and it cannot automatically secure sums that accrue thereafter.
Facts:
- On June 30, 2000, Denicia P. Walker purchased a condominium unit governed by the Long Reach Knolls Condominium, Inc. (Appellant).
- As a unit owner, Walker was contractually obligated under the association's bylaws to pay monthly assessments for common expenses.
- Walker repeatedly defaulted on her monthly assessment payments over a period of many years.
- On October 6, 2015, the association notified Walker of its intent to record a ninth lien against her unit for unpaid assessments, interest, and attorney's fees.
- The lien notice specified an amount of $4,702.80 owed as of that date, and purported to also secure 'all sums becoming due thereafter.'
- Walker did not pay the specified amount or otherwise challenge the lien.
- The association recorded the ninth lien against Walker's property on December 22, 2015.
Procedural Posture:
- Denicia P. Walker filed for Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of Maryland.
- Long Reach Knolls Condominium, Inc. filed a proof of secured claim for $42,298.89, an amount that included assessments, interest, and costs that accrued after its ninth lien was recorded.
- Walker objected to the secured claim, arguing that the Maryland Contract Lien Act does not permit a lien to secure future-accruing sums.
- As there was no controlling Maryland appellate decision on the issue, the parties jointly petitioned the Bankruptcy Court to certify the question of law to the Court of Appeals of Maryland.
- The United States Bankruptcy Court for the District of Maryland issued a certification order, asking the Court of Appeals of Maryland to answer the question of law.
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Issue:
Does the Maryland Contract Lien Act permit a community association's perfected lien to secure unpaid damages, costs of collection, late charges, and attorney’s fees that accrue subsequent to the recordation of the lien?
Opinions:
Majority - Hotten, J.
No, the Maryland Contract Lien Act (MCLA) does not permit a community association's lien to secure unpaid assessments, costs, and fees that accrue after the lien has been recorded. The court reasoned that the MCLA's plain text, legislative history, and statutory context all prohibit such 'continuing liens.' First, the statutory text defines 'Damages' as unpaid sums 'due' under a contract, and future assessments are not yet 'due' at the time of recording. Second, the legislative history shows the MCLA was enacted to provide debtors with procedural due process, specifically the right to notice and an opportunity to challenge a specific, finite amount of debt before a lien attaches, a purpose that a continuing lien would undermine. Finally, the court noted that the General Assembly has explicitly authorized continuing liens in other statutes (e.g., wage garnishments), and its conscious omission of such language in the MCLA indicates an intent to forbid them in this context.
Analysis:
This decision provides a definitive interpretation of the Maryland Contract Lien Act, clarifying that community association liens are static and limited to the amount owed at the time of recordation. The ruling prioritizes the due process rights of homeowners to contest specific debts over the administrative convenience for associations. As a result, community associations in Maryland must now file separate, successive liens to secure new debts that accrue after an initial lien is filed, potentially increasing their legal and administrative costs but ensuring greater transparency and protection for property owners.
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