Selling a Maryland house with an HOA or condo lien: the resale packet, the Contract Lien Act, and what gets paid at closing

Roughly half the houses we look at in Columbia, Owings Mills, Odenton, Waldorf and Bowie sit inside a homeowners association or a condominium, and a good share of the owners who call us are behind on the dues, have a lien recorded against the house, or have been fighting the architectural committee over a shed for longer than they care to admit. None of it stops a sale. What it changes is the paperwork the seller owes the buyer, the order in which money comes out at closing, and how long a retail sale takes. This is the Maryland version, and what a cash sale removes.

The resale packet is the real clock

Maryland gives every buyer of a house in an association the right to a set of documents from that association before the contract is firm. For a condominium the rule is section 11-135 of the Real Property Article: the seller has to deliver a resale certificate that covers the current fee, any unpaid assessments on the unit, pending special assessments, the association’s budget and reserves, known capital expenditures, pending lawsuits, the insurance in place and any violation notice against the unit. The association has twenty days to produce it after the seller asks, may charge a fee the statute caps, and the buyer gets a window after receiving it to walk away for any reason. For a homeowners association the parallel rule is section 11B-106, with a similar list, a similar fee cap, and a cancellation right for the buyer if the packet arrives after the contract instead of before.

In practice the packet is where a retail sale loses its second and third week. The management company is slow, the certificate comes back showing a pending special assessment for the roofs or the parking lot, the buyer’s lender sends the association a questionnaire about reserves and owner occupancy, and a condo that is not on the FHA approved list quietly loses every first time buyer in the market. A seller who is already behind on dues has one more problem: the certificate says so, in writing, to the buyer.

How dues become a lien

Associations in Maryland collect unpaid assessments through the Maryland Contract Lien Act, sections 14-201 through 14-206 of the Real Property Article. The association first mails a notice of intent to create a lien that states the amount, the basis for it and your right to contest. You have thirty days to file a complaint in the circuit court to fight the amount. If you do nothing, the association records a statement of lien in the land records, and from that point the debt rides with the house and the title company will find it. The lien can be foreclosed the way a mortgage is foreclosed, and since 2017 that foreclosure right covers unpaid assessments and the costs of filing the lien, not fines for the fence or the trash cans. Fines still get paid at settlement, but the association cannot take the house over them.

Two things follow from that. A lien does not need to be paid before you sell. It is a payoff at closing, like a second mortgage, and the title company orders a statement from the management company and cuts the check from your proceeds. And the sooner you sell, the smaller it is. Late fees, interest at the rate in the declaration and the association’s attorney fees all keep running until settlement. Our closing costs article shows where the payoff sits on the seller side of the settlement sheet.

Open covenant violations

The other thing the resale packet reports is an open violation: the unapproved deck, the vinyl fence in a wood fence neighborhood, the shutters painted the wrong green, the driveway parking. On a retail sale the buyer’s agent asks you to cure it before settlement or credit for it, the association wants an application and an inspection to close the case, and a project that would take a weekend takes six weeks because the architectural committee meets monthly. A violation transfers with the house if nobody fixes it. A cash buyer who plans to renovate anyway treats it as one more line on the scope of work.

Columbia is its own case

The largest association in Maryland is not technically a homeowners association under Title 11B. The Columbia Association annual charge is a covenant lien that dates to the 1960s deeds, assessed on the property and collected by the association, with village architectural covenants layered on top. A retail sale in Columbia still needs the village’s resale packet and a clearance of any open covenant matter, and unpaid CA charges are a lien paid from proceeds the same way. Our Howard County page and our Columbia page cover the local version.

Special assessments and reserve problems

A pending special assessment is the item that most often turns a clean condo listing into a stale one. The certificate discloses it, the buyer asks the seller to pay it in full at settlement whether or not it has been billed yet, the lender reads the reserve study and wants a larger down payment or declines the building, and the price drifts down for three months. Older garden condos in Owings Mills, Glen Burnie and Laurel and the townhouse associations in Waldorf built through the 1980s are where we see it most. We read the same certificate, price the assessment into the offer and close. The seller pays the share due at settlement from the proceeds and is done with the building.

What the seller has to disclose

Beyond the association documents, Real Property section 10-702 still applies to a house in an HOA or a condominium unit, and most sellers behind on dues use the disclaimer form. The disclaimer covers the condition of the house. It does not cover the association paperwork, which has its own delivery rules, and a contract that skipped the resale packet gives the buyer a way out at the last minute. Deliver it. If you are selling to us, we order it, we pay for it, and we do not use it as a reason to reprice.

Selling to a cash buyer with a lien in place

Send us the address and, if you have it, the last letter from the management company or the association’s attorney. We order the resale certificate or the HOA disclosures ourselves, walk the house in person or on a video call, and put a written offer in front of you within a day that shows the finished value, the repair estimate and the margin. A licensed Maryland title company handles settlement, pays the assessment lien, any fines and the attorney fees from the proceeds, and wires you the rest. Two to three weeks is typical, and the date moves only if the association is slow with the packet, in which case the price holds while we wait. Nothing has to be fixed, painted or approved before you sell. Our as-is page covers what we do and do not ask for, and our how it works page shows the math with a real example.