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§ 14-203. Liens created by breaches of contract

West's Annotated Code of MarylandReal PropertyEffective: October 1, 2011

West's Annotated Code of Maryland
Real Property (Refs & Annos)
Title 14. Miscellaneous Rules (Refs & Annos)
Subtitle 2. Maryland Contract Lien Act (Refs & Annos)
Effective: October 1, 2011
MD Code, Real Property, § 14-203
§ 14-203. Liens created by breaches of contract
In general
(a)(1) A party seeking to create a lien as the result of a breach of contract shall, within 2 years of a breach of contract, give written notice to the party against whose property the lien is intended to be imposed.
(2) Except as provided in paragraph (3) of this subsection, notice under this subsection shall be served by:
(i) Certified or registered mail, return receipt requested, addressed to the owner of the property against which the lien is sought to be imposed at the owner's last known address; or
(ii) Personal delivery to the owner by the party seeking a lien or the party's agent.
(3) If a party seeking to create a lien is unable to serve an owner under paragraph (2) of this subsection, notice under this subsection shall be served by:
(i) The mailing of a notice to the owner's last known address; and
(ii) Posting notice in a conspicuous manner on the property by the party seeking to create a lien or the party's agent in the presence of a competent witness. In the instance of a contractual lien on a building, the notice shall be posted in a conspicuous manner on the door or other front part of the building.
Contents of notice
(b) A notice under subsection (a) of this section shall include:
(1) The name and address of the party seeking to create the lien;
(2) A statement of intent to create a lien;
(3) An identification of the contract;
(4) The nature of the alleged breach;
(5) The amount of alleged damages;
(6) A description of the property against which the lien is intended to be imposed sufficient to identify the property, and stating the county or counties in which the property is located; and
(7) A statement that the party against whose property the lien is intended to be imposed has the right to a hearing under subsection (c) of this section.
Filing of complaint
(c)(1) A party to whom notice is given under subsection (a) of this section may, within 30 days after the notice is served on the party, file a complaint in the circuit court for the county in which any part of the property is located to determine whether probable cause exists for the establishment of a lien.
(2) A complaint filed under this subsection shall include:
(i) The name of the complainant and the name of the party seeking to establish the lien;
(ii) A copy of the notice served under subsection (a) of this section; and
(iii) An affidavit containing a statement of facts that would preclude establishment of the lien for the damages alleged in the notice.
(3) A party filing a complaint under this subsection may request a hearing at which any party may appear to present evidence.
Burden of proof
(d) If a complaint is filed, the party seeking to establish the lien has the burden of proof.
Process and pleadings filed in single action
(e) The clerk of the circuit court shall docket the proceedings under this section, and all process shall issue out of and all pleadings shall be filed in a single action.
Affidavits used to supplement lien
(f) Before any hearing held under subsection (c) of this section, the party seeking to establish a lien may supplement, by means of an affidavit, any information contained in the notice given under subsection (a) of this section.
Review of pleadings and hearing conducted by court
(g)(1) If a complaint is filed under subsection (c) of this section, the court shall review any pleadings filed, including any supplementary affidavit filed under subsection (f) of this section, and shall conduct a hearing if requested under subsection (c)(3) of this section.
(2) If the court determines that probable cause exists to establish a lien, it shall order the lien imposed.
(3) The order to impose a lien shall state that the owner of the property against which the lien is imposed may file a bond of a specified amount to have the lien against the property removed.
Filing statement of lien
(h)(1) If the court orders a lien to be imposed under subsection (g) of this section, or if the owner of the property against which a lien is intended to be imposed fails to file a complaint under subsection (c) of this section the party seeking to create the lien may file a statement of lien among the land records of each county in which any portion of the property is located.
(2) The party seeking to create the lien may file the lien statement in the county land records:
(i) If a complaint was filed under subsection (c) of this section, 30 days after the date of the court order allowing the creation of the lien; or
(ii) If a complaint was not filed under subsection (c) of this section, 30 days after the owner was served under subsection (a)(2) or (3) of this section.
(3) Unless the party seeking to create the lien and the owner agree otherwise, if the party seeking to create the lien fails to file the lien statement within 90 days after the expiration of the applicable time period described in paragraph (2) of this subsection, the party seeking to create the lien may:
(i) Not file the lien statement in the county land records; and
(ii) File for a new lien by complying with the requirements of subsections (a) through (h) of this section.
(4) A lien imposed under this subtitle has priority from the date the statement of lien is filed.
(5) Until an order imposing a lien is entered by the court, the owner of the property against which the lien is imposed may have the lien removed at any time by filing with the clerk of the circuit court a bond in the amount specified by the court under subsection (g)(3) of this section.
Actions proceeding to trial
(i)(1) Until an order is entered by the court either establishing or denying a lien, the action shall proceed to trial on any matter at issue.
(2) The court may award costs and reasonable attorney's fees to any party under this subtitle.
Statement of lien
(j)(1) Subject to paragraph (2) of this subsection, a statement of lien is sufficient for purposes of this subtitle if it is in substantially the following form:
STATEMENT OF LIEN
This is to certify that the property described as _______________ is subject to a lien under Title 14, Subtitle 2 of the Real Property Article, Maryland Annotated Code, in the amount of $______. The property is owned by ____________________.
I hereby affirm under the penalty of perjury that notice was given under § 14-203(a) of the Real Property Article, and that the information contained in the foregoing statement of lien is true and correct to the best of my knowledge, information, and belief.
_________________________
(name of party claiming lien)
(2)(i) This paragraph applies only to a lien that is subject to § 11-110(f) or § 11B-117(c) of this article.
(ii) In addition to satisfying the requirements of paragraph (1) of this subsection, a statement of lien is sufficient for purposes of this subtitle if the statement includes specific information about the amount of the regular monthly assessments, or the equivalent of the regular monthly assessments, for common expenses in substantially the following form:
The amount of the regular monthly assessments, or the equivalent of the regular monthly assessments, for common expenses, that is the basis of the priority portion of this lien as provided in § 11-110(f) or § 11B-117(c) of the Real Property Article, is $______. This sum represents ____ months of unpaid regular assessments, at $______ per month.
Notations in land records releasing lien
(k) If an order is entered under subsection (i) of this section denying a lien, or if a bond is filed under subsection (h) of this section, the clerk of the circuit court shall enter a notation in the land records releasing the lien.

Credits

Added by Acts 1985, c. 736, § 1, eff. July 1, 1985. Amended by Acts 1989, c. 383; Acts 1990, c. 6 § 2; Acts 1991, c. 293; Acts 2011, c. 387, § 2, eff. Oct. 1, 2011.

Editors' Notes

HISTORICAL AND STATUTORY NOTES
2011 Legislation
Acts 2011, c. 387, § 3, provides:
“SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall be construed to apply only prospectively and may not be applied or interpreted to have any effect on or application to any first mortgage or first deed of trust on a condominium unit or a lot in a homeowners association that is recorded before the effective date of this Act.”
MD Code, Real Property, § 14-203, MD REAL PROP § 14-203
Current through legislation effective June 1, 2019, from the 2019 Regular Session of the General Assembly.
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