Maryland’s highest court handed down an important decision affirming what many believe was the only common-sense conclusion. The Court of Appeals held that a lien filed by a homeowners’ association or condominium can only secure money due at the time the lien is filed. The case, In Re: Anthony D. Walker and Denicia P. Walker, analyzed the intent and meaning of the Maryland Contract Lien Act (“MCLA”), the statute that permits a community association to file liens without ever going to court.
Argued on February 4, the opinion was published less than two months after argument. Writing for a unanimous Court, Judge Michelle Hotten said “[t]he plain text, legislative history, and case law relevant to the MCLA collectively demonstrate the intent of the General Assembly to prohibit continuing liens.” The Court’s decision halts an abusive practice whereby some law firms representing HOAs and condominiums claimed that a lien could secure monies that homeowners never had a right to challenge because they were not owed at the time of the line. Homeowners were often put in difficult positions when they went to sell or refinance their homes because the associations and their attorneys claimed that they must pay $15,000, for example, to remove a lien with a face value of $2,000, for example. This difference was often largely due to purported attorneys’ fees and collection costs that the associations claim came due after the filing of the lien that homeowners never had a chance to challenge and courts never evaluated for reasonableness.
“Prior to the Court’s decision, the practice was very difficult to challenge. It hurt those already financially vulnerable,” said attorney Matthew Skipper, who, along with co-counsel David Mintz, argued the case before the Court of Appeals. “Homeowners were often left with the impossible choice of paying money they may not owe legally or losing a sale.” Those that employed this practice, referred to as continuing liens in the Court’s opinion, relied on the language of the lien document they drafted stating that it secured future sums, but the Court found that language violated the MCLA and was not enforceable.
“This was the only decision that made sense,” said Skipper. “That the Court asked opposing counsel so many questions during argument suggests they apparently struggling to understand any justification under the law for this theory.” Conversely, neither Skipper nor Mintz were asked a single question during their argument. The attorneys for the prevailing party, Ms. Walker, were Matthew Skipper and Jeffrey Kahntroff of Skipper Law and David Mintz.
