Maryland HOA Assessment Limits

Section 1: Overview — How assessment authority and limits work in Maryland

Maryland draws no hard line in its statutes on how much a homeowners association can raise assessments. The governing document — the recorded declaration — sets the limit. But there is a catch: a statewide reserve-funding law gives a board the power to override that limit when reserve funding demands it. Condominiums operate under the Maryland Condominium Act, Md. Code, Real Property § 11-101 et seq., and planned-community associations operate under the Maryland Homeowners Association Act, Md. Code, Real Property § 11B-101 et seq.¹ Since the 2022 reserve-study law took effect, an association that must fund reserves to the level its reserve study recommends may increase assessments to meet that amount — regardless of any declaration, articles, or bylaw provision that restricts or caps increases.² Associations enforce unpaid assessments through a lien created and foreclosed under the Maryland Contract Lien Act, Md. Code, Real Property § 14-201 et seq. — not through a standalone lien section of either association statute.³ On the national spectrum, Maryland sits apart from statutory-cap states such as California and from the budget-ratification mechanism of the UCIOA family. It falls among the declaration-driven states, distinguished by a reserve-funding rule that can override a declaration cap. The sections below lay out the framework, the procedures, and the recent legislative and judicial activity in detail.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

In a Maryland condominium, the council of unit owners holds the power to adopt budgets and collect assessments for common expenses; the board of directors exercises that authority by adopting the annual budget.⁴ The association funds current common expenses and reserves by assessing unit owners in proportion to their percentage interests in common expenses and common profits — the default allocation formula under § 11-110(b).⁵ Where the declaration or bylaws allow, the association may assess utility charges based on usage and charge limited-common-element maintenance costs to owners who have exclusive use, extending the allocation formula beyond the percentage-interest default.⁵

In a planned-community HOA, assessment authority flows from the recorded declaration — not from a broad statutory grant. A lot owner is liable, as the declaration provides, for all assessments and charges that come due while the owner holds the lot.⁶ The Appellate Court of Maryland confirmed in 2023 that the Homeowners Association Act does not by itself create an entity with the power to levy mandatory assessments; that authority must be granted in the governing documents.⁷ In both settings, the board sets the dollar amount through the budget, and the declaration controls the allocation formula and any member-approval threshold.

2B. Limits on regular assessment increases

Maryland law sets no general statutory percentage ceiling on regular assessment increases. Any cap on increases comes from the recorded declaration, articles of incorporation, or bylaws, and the board's authority to raise the regular assessment is otherwise governed by those documents — including any member-approval or quorum threshold the documents impose.⁸

The one statutory override is the reserve-funding rule. For a residential condominium, the board may increase the assessment levied to cover the reserve-funding amount required under § 11-109.4 "notwithstanding any provision of the declaration, articles of incorporation, or bylaws restricting assessment increases or capping the assessment that may be levied in a fiscal year."² The Homeowners Association Act contains a parallel rule: notwithstanding any declaration, articles, or bylaw provision restricting increases or capping the assessment, the governing body may increase an assessment levied to cover the reserve-funding amount required under § 11B-112.3.⁹ This override was added by the 2022 reserve-study law and carried forward in the 2025 amendments. Where a declaration would otherwise cap an increase or require a member vote, that limit yields to the reserve-funding obligation. A board that raises an assessment outside the reserve-funding context without following the declaration's procedure opens itself to challenge, and an association that fails to fund reserves as required exposes its board to fiduciary-duty claims and the community to enforcement by the Maryland Attorney General's Consumer Protection Division.¹⁰

2C. Special assessments, reserves, and the declaration

Special assessments are authorized and limited by the declaration; Maryland's association statutes set no general percentage limit on a special assessment and impose no statutory member-vote threshold, so the governing documents control whether and how a special assessment may be levied. The reserve-funding requirement reduces the practical need for surprise special assessments while making a minimum level of regular reserve contribution mandatory. Each covered association must obtain a reserve study, update it at least every five years, and — following 2025 amendments — develop a funding plan in consultation with the study preparer and deposit the budgeted reserve amount into the reserve account by the last day of each fiscal year.¹¹ Emergency handling and most special-assessment mechanics remain as set in the declaration. The practical result is direct: a Maryland board must fund reserves to the recommended level and may exceed a declaration cap to do so, while the declaration continues to control other increases and special assessments.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

The board adopts an annual budget under the procedure in its declaration and bylaws. For condominiums, the annual proposed budget process is set out in § 11-109.2, and the board must review the reserve study in connection with the budget and summarize it for owners.¹² This framework applies to both condominiums and HOAs, with the condominium budget mechanics set by statute and the HOA mechanics primarily declaration-defined. The budget must include the reserve-funding amount the most recent study recommends, and the board may raise the assessment to reach it regardless of any declaration cap.² Notice and effective date for an increase follow the declaration and bylaws — no separate statutory notice rule governs a routine increase for either type of association.

B. Special assessment procedure

The declaration defines the authority to levy a special assessment, any member-approval threshold, and the notice required; Maryland's statutes impose no general percentage cap or statutory vote requirement on special assessments — for both condominiums and HOAs, these matters are declaration-defined. A special assessment for delinquency purposes is among the charges an association may pursue, but it is excluded from the priority portion of an association lien on foreclosure for both types of association.¹³

C. Caps, ceilings, and override mechanisms

Maryland sets no general statutory percentage cap on regular or special assessments; any ceiling is whatever the declaration sets — for both condominiums and HOAs, this is declaration-defined. The key statutory mechanism is the reserve-funding override, which lets the board raise the assessment to the reserve study's recommended funding level regardless of a governing-document cap or approval requirement — under § 11-110(b) for condominiums and § 11B-117(a) for HOAs.²

D. Notice, documentation, and disclosure tied to assessments

Notice of an assessment or increase follows the declaration and bylaws for both condominiums and HOAs. The reserve study must be available for inspection and copying by any unit owner and must be summarized for submission with the annual proposed budget — under § 11-109.4(e) for condominiums and the parallel HOA disclosure provision in § 11B-112.3.¹⁴ On resale, both HOAs and condominiums disclose assessment and reserve information to buyers through the statutory resale-disclosure package — under § 11B-106 for HOAs and § 11-135 for condominiums.¹⁵

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

C. Active legislative debates

The 2025 session also saw proposals — SB 464 and HB 581 — that would have let a condominium board raise the non-reserve common-expense assessment by up to 5% regardless of a governing-document approval requirement. Those proposals did not pass. Reserve-funding and common-ownership-community oversight remain active subjects before the General Assembly.

Section 5: National positioning and related coverage

Maryland occupies a distinct position on the assessment-limit spectrum. In statutory-cap states, led by California, the law sets a hard ceiling: Cal. Civ. Code § 5605(b) bars a board from imposing a regular assessment more than 20 percent greater than the preceding fiscal year's assessment, or special assessments that in the aggregate exceed 5 percent of budgeted gross expenses, without the approval of a majority of a quorum of members. In the ratification-mechanism states of the UCIOA family — Alaska, Colorado, Connecticut, Delaware, Maine, Minnesota, Vermont, and Washington — owners control increases through a veto of the board-adopted budget rather than a fixed percentage. Declaration-driven states such as Maryland, Alabama, Arkansas, and Georgia leave assessment limits to the recorded declaration. Within that group, Maryland stands out: a statutory reserve-funding rule lets a board override a declaration cap. For a multi-state operator entering Maryland, the practical implication is clear: the board must fund reserves to the recommended level and may exceed a declaration cap to do so. Maryland overhauled its reserve-funding framework in 2022 and again in 2025, and renamed its appellate courts effective December 14, 2022 — after voters approved the change by 75 percent to 25 percent — so older references to the Court of Appeals and Court of Special Appeals describe the same courts now called the Supreme Court of Maryland and the Appellate Court of Maryland.

Footnotes

1. Md. Code, Real Property § 11-101 et seq. (Maryland Condominium Act); § 11B-101 et seq. (Maryland Homeowners Association Act) ↩
2. Md. Code, Real Property § 11-110(b)(1)(ii) ↩
3. Md. Code, Real Property § 14-201 et seq. (Maryland Contract Lien Act) ↩
4. Md. Code, Real Property § 11-109(b)(3) ↩
5. Md. Code, Real Property § 11-110(b) ↩
6. Md. Code, Real Property § 11B-117(a)(1) ↩
7. Logan v. Dietz, 258 Md. App. 629 (2023) ↩
8. Md. Code, Real Property § 11-110; § 11B-117 (no statutory percentage cap stated) ↩
9. Md. Code, Real Property § 11B-117(a)(2) ↩
10. Maryland Attorney General, Consumer Protection Division ↩
11. Md. Code, Real Property § 11-109.4(f); § 11-109.2(c); § 11B-112.3(f); § 11B-112.2(d) ↩
12. Md. Code, Real Property § 11-109.2 ↩
13. Md. Code, Real Property § 11-110(f)(3); § 11B-117(c)(3) ↩
14. Md. Code, Real Property § 11-109.4(e) ↩
15. Md. Code, Real Property § 11B-106; § 11-135 ↩
16. Maryland General Assembly, HB 292 (2025 Regular Session), Chapter 519 ↩
17. Chapter 519, Laws of Maryland 2025 (HB 292), enrolled text ↩
18. Furlow v. Ulmstead Gardens Community Ass'n, Inc., No. 1093, Sept. Term 2022 (Md. App. Nov. 21, 2023) (unreported) ↩
19. Logan v. Dietz, 258 Md. App. 629 (2023) ↩