Maryland HOA Foreclosure

Section 1: Overview — How HOA foreclosure works in Maryland

Maryland governs its community associations with two parallel statutes, enforces association assessment liens through a separate Contract Lien Act, and runs foreclosures on a dual-track procedure. One rule anchors the whole system: the state bars an association from foreclosing for fines, late fees, or fee-recovery costs alone. Condominiums fall under the Maryland Condominium Act, Md. Code Ann., Real Prop. § 11-101 et seq.¹ Planned communities fall under the Maryland Homeowners Association Act, Real Prop. § 11B-101 et seq.² Both statutes route lien enforcement and foreclosure through the Maryland Contract Lien Act, Real Prop. § 14-201 et seq.³

Start with that categorical restriction, because it drives everything else. Under Real Prop. § 14-204(d), a governing body may foreclose on a lien only when the secured damages consist of delinquent periodic or special assessments and interest, plus reasonable costs and attorney fees that directly relate to filing the lien and do not exceed the delinquent assessments. The foreclosable amount may not include fines, or the fees and costs of recovering fines.⁴ The legislature enacted that restriction through HB 286 in the 2013 session, effective October 1, 2013 — and people frequently misattribute it to later reserve-study legislation.⁵

A residential foreclosure moves through the circuit court under Real Prop. § 7-105 et seq. and the Maryland Rule 14-200 series, and for owner-occupied homes it carries pre-foreclosure mediation, a trustee sale, and court ratification of that sale.⁶ Federal law runs alongside the state framework — the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the Bankruptcy Code's automatic stay all apply. The sections that follow detail the statutory framework, the procedural sequence, and the recent legislative and judicial activity.

Section 2: The statutory framework

2A. The Condominium Act, the HOA Act, and the Contract Lien Act

Maryland has not adopted the Uniform Common Interest Ownership Act. Condominiums operate under the Maryland Condominium Act at Real Prop. §§ 11-101 through 11-143, and planned communities operate under the Maryland Homeowners Association Act at Real Prop. §§ 11B-101 through 11B-118.^1,2 The two are not interchangeable. The HOA Act expressly does not reach property that is part of a condominium regime governed by Title 11.⁷

Each Act authorizes an assessment lien, but each locates enforcement in the Maryland Contract Lien Act. For condominiums, Real Prop. § 11-110(d) lets the association enforce payment of assessments — together with interest, late charges, costs of collection, and reasonable attorney fees — by imposing a lien under the Contract Lien Act.⁸ For homeowners associations, Real Prop. § 11B-117(b) lets an association enforce the assessments and charges set in the declaration by imposing a lien under the same Act.⁹ What a lien may secure and what a sale may collect are two different questions. A condominium lien may include interest up to 18 percent and a late charge of $15 or one-tenth of the delinquent amount, whichever is greater, once a delinquency runs 15 days.⁸

The categorical foreclosure restriction governs what an association may collect through a forced sale. As one community-association firm summarizes the rule, a foreclosure "may only be pursued to the extent that damages secured by the lien consist of: (1) delinquent periodic assessments or special assessments and any interest; (2) reasonable costs and attorney's fees directly related to the filing of the lien that do not exceed the amount of the delinquent assessments, excluding any interest; and (3) do not include fines imposed by the governing body or attorney's fees or costs related to recovering the fines," citing Real Prop. § 14-204(d)(2).⁴ An association may still record a lien that includes fines and late fees, and it may pursue a personal money judgment for those amounts, but it may not use them as the basis for a foreclosure sale.⁴ This is a categorical limit, not a minimum-dollar threshold; Maryland sets no statutory minimum debt for association foreclosure.

On priority, Maryland grants a limited super-priority that runs narrower than the UCIOA six-month model. Under Real Prop. § 11-110(f) for condominiums and § 11B-117(c) for HOAs, when a first mortgage or deed of trust recorded on or after October 1, 2011 is foreclosed, a portion of the association lien takes priority — no more than four months, or the equivalent of four months, of unpaid regular assessments for common expenses, capped at $1,200, and excluding interest, collection costs, late charges, fines, attorney fees, and special assessments.^9,10 As a title-industry underwriting bulletin puts the limit, "the lien priority is for 4 months of regular HOA dues, or $1,200.00, whichever is less."¹⁰ Outside that narrow slice, the association lien generally sits junior to a first mortgage. A declaration may set assessment levels and certain charges, but it cannot expand the foreclosable categories beyond what § 14-204(d) allows.

2B. Foreclosure procedure and pre-foreclosure mediation

Maryland is a dual-track foreclosure state. Real Prop. § 7-105 recognizes that a mortgage or deed of trust may authorize a power of sale or declare the borrower's assent to a decree for sale on default.¹¹ An association lien follows the same path. Real Prop. § 14-204(a) provides that a Contract Lien Act lien may be enforced and foreclosed in the same manner, and subject to the same requirements, as the foreclosure of mortgages or deeds of trust that contain a power of sale or an assent to a decree.⁴ Most residential foreclosures proceed through the assent-to-a-decree variant, which the circuit court administers under the Maryland Rule 14-200 series; that series governs how the action begins, service, notice before sale, the sale, post-sale procedures, and proceeds.¹²

Because § 14-204(a) imports the same requirements as a deed-of-trust foreclosure, the residential foreclosure protections in § 7-105 et seq. carry into association lien foreclosures of owner-occupied homes. Real Prop. § 7-105.1 sets the residential foreclosure procedure and mediation framework, requiring a notice of intent to foreclose, a loss-mitigation analysis, and the option of pre-file or post-file foreclosure mediation for owner-occupied residential property.⁶ The Office of Administrative Hearings administers mediation requests and files its report with the court.⁶ The statute defines owner-occupied residential property as property in which at least one unit is occupied by an individual who holds an ownership interest and uses the property as a primary residence.⁶ The mediation provisions are written around a secured party under a mortgage or deed of trust, so their precise application to an association lien turns on the same-requirements language of § 14-204(a); the conservative compliance practice is for an association foreclosing on an owner-occupied home to observe the residential notice and mediation requirements.⁴

The sequence runs from the filing of an order to docket or complaint to foreclose, through any pre-foreclosure mediation, to the trustee or substitute trustee sale, then the auditor's report and the court's ratification of sale, and finally to final ratification.¹³ A foreclosure sale of residential property may not occur until the statutory waiting periods run — generally at least 45 days after service of process that includes a final loss-mitigation affidavit, and no sooner than 15 days after any mediation is held.⁶ A homeowner may cure the default and reinstate at any time up to one business day before the sale.⁶

2C. Federal overlays and state consumer protection

Pre-sale collection activity by associations and their agents can amount to debt collection. The federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., governs third-party collectors and many association-affiliated collectors during the dunning phase.¹⁴ The Supreme Court narrowed FDCPA exposure for foreclosure conduct in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), holding that a business engaged only in nonjudicial foreclosure is not a debt collector under the Act's principal operative provisions, subject to a limited exception.¹⁵ Maryland's analog, the Maryland Consumer Debt Collection Act, Md. Code Ann., Com. Law § 14-201 et seq., prohibits abusive, deceptive, or unfair collection conduct and reaches creditors collecting their own debts, which gives it broader scope than the FDCPA in some respects.¹⁶

Two further federal overlays can halt a foreclosure outright. The Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq., provides stays and protections for active-duty servicemembers.¹⁷ A bankruptcy filing triggers the automatic stay under 11 U.S.C. § 362, which halts foreclosure activity the moment the owner petitions.¹⁸ Maryland has no dedicated HOA regulator. Real estate licensing sits with the Maryland Real Estate Commission within the Department of Labor.¹⁹ The state does not require community association managers to hold a license; Real Prop. § 14-131 establishes a Community Association Managers Registry rather than a licensing regime, and some local jurisdictions impose their own registration.²⁰

Section 3: The Maryland HOA foreclosure procedural sequence

A. Lien establishment and recording

The lien arises from the governing documents, but the association must perfect it through the Contract Lien Act. For condominiums, the lien authority is Real Prop. § 11-110(d); for HOAs, it is Real Prop. § 11B-117(b).^8,9 Both route to Real Prop. § 14-203, which requires the party seeking to create a lien to give the owner written notice within two years of the breach, served by certified mail or personal delivery, stating the amount, the basis, a property description, and the owner's right to a hearing.²¹ The owner may file a complaint in the circuit court within 30 days to contest probable cause for the lien, and the association bears the burden of proof.²¹ The association then records a statement of lien in the land records. For a lien claiming the limited super-priority slice under § 11-110(f) or § 11B-117(c), § 14-203 requires the statement to specify the months and monthly amount of regular assessments that make up the priority portion.²¹ What the recorded lien may secure runs broader than what a sale may later collect; the § 14-204(d) categorical limit applies at the foreclosure stage.⁴

B. Pre-foreclosure notice and mediation

Before a sale, the same-requirements rule of § 14-204(a) brings the residential foreclosure protections to bear on owner-occupied association foreclosures.⁴ A notice of intent to foreclose must precede the filing, and for owner-occupied residential property the order to docket or complaint to foreclose must arrive with a loss-mitigation affidavit and a request-for-mediation form under § 7-105.1.⁶ The Office of Administrative Hearings administers foreclosure mediation.⁶ Pre-suit collection conduct triggers FDCPA and Maryland Consumer Debt Collection Act exposure, so associations and their counsel should document validation and avoid misstating the foreclosable balance.^14,16 Counsel should also run pre-filing checks for an active bankruptcy, which triggers the 11 U.S.C. § 362 automatic stay, and for active-duty military status under the Servicemembers Civil Relief Act.^17,18 These checks apply the same way to condominium foreclosures under Title 11 and HOA foreclosures under Title 11B, because both proceed through the Contract Lien Act.⁴

C. Foreclosure sale procedures

The action begins when the association files an order to docket or complaint to foreclose in the circuit court for the county where the property sits, under Real Prop. § 7-105 and the Maryland Rule 14-200 series.^11,12 For residential property, the notice of intent to foreclose must go out before filing, and for owner-occupied property it must include loss-mitigation and mediation materials.⁶ The trustee or substitute trustee must publish notice of the time, place, and terms of sale once a week for three successive weeks before the sale in a newspaper in the county.²² The property sells at public auction to the highest bidder, the purchaser takes equitable title at the moment of sale, and a certificate or report of sale goes to the court.²² These steps are identical for condominium associations proceeding under Title 11 and HOAs proceeding under Title 11B, because § 14-204(a) directs both to follow deed-of-trust foreclosure procedure; a declaration may add notice obligations but cannot reduce the statutory minimums.⁴

D. Post-sale rights and remedies

After the sale, the trustee files a report of sale, and the court sets a period for exceptions. A debtor's exceptions may challenge procedural irregularities at the sale, and the debtor may challenge the statement of indebtedness through exceptions to the auditor's report.²³ The court ratifies the sale once the exceptions period passes or the court overrules the exceptions and finds the sale fairly made; ratification completes the purchaser's title, retroactive to the sale date.²² A court-appointed auditor then files a report distributing the proceeds.⁶ Maryland's post-sale redemption is limited: the owner may redeem up until the court ratifies the sale, after which the property vests in the purchaser.⁶ A deficiency judgment is available — the moving party may file for a deficiency within three years after ratification of the auditor's report under Md. Rule 14-216(b) and Real Prop. § 7-105.17.⁶ These remedies apply to both condominium and HOA foreclosures.⁴

Section 4: Recent legislative and judicial activity

A. Recent bills

Maryland's recent sessions have left the categorical foreclosure restriction untouched and trained their attention elsewhere — on reserve funding and on the personal data associations may collect. Two 2025 acts stand out.

The categorical foreclosure restriction itself stayed out of the recent sessions. It remains as HB 286 enacted it in 2013, codified at Real Prop. § 14-204(d).^4,5

B. Recent appellate rulings

Maryland's appellate courts have not rewritten association-lien law from the bench. They have, however, clarified how a board levies assessments and when title passes at a foreclosure sale. Two recent unreported decisions, plus the leading 2005 authority, frame the current picture.

The leading authority on association lien foreclosure remains Greenbriar Condominium, Phase I Council of Unit Owners, Inc. v. Brooks, 387 Md. 683 (2005) — decided when the high court was still the Court of Appeals of Maryland — which addresses exceptions to sale and the effect of an overstated payoff on the right of redemption.²³

C. Active legislative debates

Recent sessions have focused on reserve funding, association governance, elections, and data protection — not on the foreclosure restriction itself. Pressure to revisit the reserve mandates carried into 2025. On January 21, 2025, the Baltimore County Council unanimously approved a resolution asking the General Assembly to give common-ownership communities "more time to conduct reserve studies," specifically "five years to collect the fees, rather than three years."²⁴

Section 5: National positioning and related coverage

Maryland is a comprehensive non-UCIOA state with two parallel statutes — the Condominium Act and the HOA Act — both channeling lien enforcement through the Maryland Contract Lien Act. It runs a dual-track foreclosure that proceeds mainly through the assent-to-a-decree variant in the circuit court, layers residential pre-foreclosure mediation on top, and imposes a categorical restriction that bars foreclosure for fines, late fees, or fee-recovery costs alone. That model contrasts with non-judicial trustee's-sale states such as Arizona, Georgia, and Idaho, where association foreclosures move outside court supervision, and with UCIOA-style super-priority states such as Colorado, where, under Colo. Rev. Stat. § 38-33.3-316, an HOA may foreclose once "the total amount secured due is equal to six months or more of common expense assessments." Maryland's super-priority runs narrower, capped at four months and $1,200.

Maryland's categorical restriction also predates reform statutes like Colorado's HB 22-1137, which Governor Jared Polis signed on June 3, 2022, and which "limits HOAs from seeking foreclosure against homeowners who accumulate fines for violating community rules" and caps such penalties at $500. Maryland uses a category bar rather than a minimum-debt threshold. For a multi-state operator, the practical takeaway is straightforward: Maryland demands separate condominium and HOA playbooks and careful screening of the foreclosable balance before any sale.

1. Md. Code Ann., Real Prop. § 11-101 et seq. (Maryland Condominium Act) ↩
2. Md. Code Ann., Real Prop. § 11B-101 et seq. (Maryland Homeowners Association Act) ↩
3. Md. Code Ann., Real Prop. § 14-201 et seq. (Maryland Contract Lien Act) ↩
4. Md. Code Ann., Real Prop. § 14-204 (enforcement and foreclosure of lien; subsection (d) categorical restriction) ↩
5. HB 286 (2013 Regular Session), Maryland General Assembly ↩
6. Md. Code Ann., Real Prop. § 7-105.1 (residential property foreclosure procedure; mediation) ↩
7. Md. Code Ann., Real Prop. § 11B-101 (HOA Act inapplicable to condominium regimes governed by Title 11) ↩
8. Md. Code Ann., Real Prop. § 11-110(d), (e) (condominium lien; interest and late charge) ↩
9. Md. Code Ann., Real Prop. § 11B-117(b), (c) (HOA lien and limited priority) ↩
10. Md. Code Ann., Real Prop. § 11-110(f) (limited four-month, $1,200 super-priority) ↩
11. Md. Code Ann., Real Prop. § 7-105 (sales; power of sale or assent to a decree) ↩
12. Maryland Rules, Title 14, Chapter 200 (foreclosure of liens on real property) ↩
13. Md. Code Ann., Real Prop. § 7-105.1; Maryland Rule 14-200 series (procedural sequence) ↩
14. 15 U.S.C. § 1692 et seq. (Fair Debt Collection Practices Act) ↩
15. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
16. Md. Code Ann., Com. Law § 14-201 et seq. (Maryland Consumer Debt Collection Act) ↩
17. 50 U.S.C. § 3901 et seq. (Servicemembers Civil Relief Act) ↩
18. 11 U.S.C. § 362 (automatic stay) ↩
19. Maryland Real Estate Commission, Maryland Department of Labor ↩
20. Md. Code Ann., Real Prop. § 14-131 (Community Association Managers Registry) ↩
21. Md. Code Ann., Real Prop. § 14-203 (creation of lien; notice, hearing, statement of lien) ↩
22. Maryland Rule 14-200 series and Md. Code Ann., Real Prop. § 7-105 (sale, publication, post-sale procedures, ratification) ↩
23. Greenbriar Condominium, Phase I Council of Unit Owners, Inc. v. Brooks, 387 Md. 683 (2005) (exceptions to sale; statement of indebtedness; effect of overstated payoff on right of redemption) ↩
24. HB 292 / SB 63 (2025 Regular Session), Chapter 519, Maryland General Assembly ↩
25. HB 755 / SB 540 (2025 Regular Session), Chapter 523, Maryland General Assembly ↩
26. Furlow v. Ulmstead Gardens Community Association, Inc., No. 1093, Sept. Term 2022 (Appellate Court of Maryland, Nov. 21, 2023) (unreported) ↩
27. Wonder City, LLC v. DiPietro, No. 0311, Sept. Term 2024 (Appellate Court of Maryland, Dec. 22, 2025) (unreported) ↩