A Maryland HOA banned short-term rentals after one owner started, and the ban reached him too
A Maryland HOA banned short-term rentals after one owner started, and the ban reached him too
2026-09-12 · Maryland · Courts
What happened. A Queen Anne's County homeowners association amended its declaration by supermajority to ban short-term rentals community-wide, after the tenth homeowner in the community began renting his house out. A circuit court held the amendment unenforceable against that homeowner. The Appellate Court of Maryland held that was wrong.1
The decision is Tracy v. 107 Terrapin Lane, LLC and The Cove Creek Club, Inc. v. 107 Terrapin Lane, LLC, consolidated at Nos. 1107 and 1675, September Term 2023, filed 24 July 2025, opinion by Albright, J.
It is unreported. Under Maryland Rule 1-104 it is not precedent in any Maryland court, and may be cited for persuasive value only where no reported authority adequately addresses the issue. It is nonetheless the most substantial judicial reading of the Maryland Homeowners Association Act's amendment power in either of the last two years, and there is no reported Maryland decision on the point.
The dispute
The association's declaration dates from 2008. In 2022, after the tenth homeowner began short-term rentals, the members amended it by supermajority to prohibit them throughout the community.1
The owner argued, in effect, that a restriction adopted after he had already begun the use could not be applied to him. The circuit court agreed, declaring the 2022 amendment unenforceable against him, and separately denied nine supporting homeowners intervention and necessary-party status.
The Appellate Court affirmed in part and reversed in part: the circuit court erred in declaring the amendment unenforceable against him, while the nine intervening homeowners lost on a threshold timeliness question without the court needing to reach the intervention requirements.
The statute at the centre of it
The operative provision is Real Property § 11B-116, the Maryland Homeowners Association Act's amendment power — which, on its own terms, operates “notwithstanding the provisions of a governing document.” The court also worked with § 11B-111.1, the no-impact home-based business provision, § 11B-106, and Walton v. Jaskiewicz, 317 Md. 264 (1989), on uniformity and mutuality of covenant enforcement.1
Why the grandfather argument is weaker in Maryland than owners assume
The intuition that a rule adopted after you started cannot reach you is strong, and it is not how covenant amendment generally works.
A Maryland declaration is a contract running with the land, and an owner takes title subject to it — including subject to the amendment mechanism it contains. Where that mechanism is validly exercised, the amended covenant binds every lot, because the whole structure depends on covenants applying uniformly rather than lot by lot. That is the thrust of Walton v. Jaskiewicz, and it is the reason a use-by-use exemption is difficult to sustain.
§ 11B-116's “notwithstanding the provisions of a governing document” language cuts in the same direction: the legislature contemplated amendment power operating over what the documents say, not subordinate to it.
An owner is not without arguments. A defect in the amendment process, a failure to meet the required supermajority, selective or non-uniform enforcement, or a vested property right of a kind Maryland recognises could each matter on different facts. What the decision indicates is that “I was already doing it” is not, by itself, one of them.
This publication does not predict outcomes in individual disputes, and an unreported decision cannot settle the question. But there is no reported Maryland authority pointing the other way.
Short-term rentals: what Maryland law actually says
Two layers, and 2026 left both where they were.
The association layer. Governing documents control, and they may be amended. Notably, Maryland's 2025 accessory-dwelling-unit act — which bars associations from unreasonably limiting ADUs and requires every county and municipality to permit them on single-family lots by 1 October 2026 — expressly does not limit short-term-rental restrictions. So an owner may gain a protected right to build an ADU and still be barred by the declaration from letting it nightly.
The local layer. Counties and municipalities regulate short-term rentals directly, and the 2026 session's attempt to constrain them failed. HB 993 would have prohibited a county or municipality from barring a short-term rental solely because the operator is a lessee or sublessee, while allowing a local cap of one such rental per operator. It passed the House 102–31, was reported favourably by Senate Judicial Proceedings on 13 April 2026 — sine die day — passed second reading the same day, and never reached third reading. Its cross-file, SB 666, was reported favourably and never reached second reading.2
One scope point worth stating plainly, because it is widely misread: HB 993 regulated local governments, not governing documents. Had it passed, it would not have overridden a single condominium or HOA rental restriction.
Where the pressure is
Queen Anne's County is Eastern Shore, and that is not incidental. Maryland's short-term-rental disputes concentrate where the housing stock is seasonal, and that is the same stretch of the state where the condominium market is under other pressures at once.
In July 2026 Worcester County homes took a median 51 days to sell against 39 a year earlier, with 4.7 months of inventory — against statewide figures of 14 days and 3.0 months. Neighbouring Somerset ran 87 days against 43, and Dorchester 64 against 33.3 Those are all-property-type figures, not condominium-only, but the direction is unambiguous: the Shore is where Maryland's market is loosening.
A rental ban adopted in a community where owners have been counting on rental income is therefore being adopted into a softening market, which is precisely the condition that turns a governance vote into litigation.
What to watch next
Whether a reported decision arrives. The amendment-power question has now been answered once, in an opinion that cannot be cited as precedent. The next Maryland association to litigate it starts almost from scratch, and a reported ruling would be worth more to boards and owners than anything the 2027 session is likely to pass.
Whether HB 993 returns. It got closer than any Maryland short-term-rental bill has, on its second filing — the 2025 version, HB 705, died after a committee hearing. Pre-file drafting requests are due 20 November 2026 for a session convening 13 January 2027.
Related Maryland HOA Topics
- Kevin Tracy, et al. v. 107 Terrapin Lane, LLC, et al.; The Cove Creek Club, Inc. v. 107 Terrapin Lane, LLC (consolidated), Nos. 1107 and 1675, September Term 2023, Appellate Court of Maryland — UNREPORTED opinion by Albright, J., filed 24 July 2025; Circuit Court for Queen Anne's County No. C-17-CV-23-000033; Real Property §§ 11B-116, 11B-111.1, 11B-106 and Walton v. Jaskiewicz, 317 Md. 264 (1989). Not precedent under Md. Rule 1-104 ↩
- House Bill 993 (2026), Real Property – Short-Term Rentals — passed House 102-31; Senate Judicial Proceedings favourable report and second reading passed 13 April 2026, no third reading (cross-file SB 666 reported favourably, never reached second reading) ↩
- Maryland REALTORS, Housing Statistics July 2026 (data from Bright MLS, current as of 6 August 2026) — Worcester, Somerset and Dorchester County median days on market against statewide figures; all property types, not condominium-only ↩
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