Contractors – Construction Liens – Maryland
Note: This summary is not intended to be an all inclusive discussion of Maryland’s construction or mechanic’s lien laws, but does include basic provisions.
What is a construction or mechanic’s lien?
Every State permits a person who supplies labor or materials for a construction project to claim a lien against the improved property. While some states differ in their definition of improvements and some states limit lien claims to buildings or structures, most permit the filing of a document with the local court that puts parties interested in the property on notice that the party asserting the lien has a claim. States differ widely in the method and time within which a party may act on their lien. Also varying widely are the requirements of written notices between property owners, contractors, subcontractors and laborers, and in some cases lending institutions. As a general rule, these statutes serve to prevent unpleasant surprises by compelling parties who wish to assert their legal rights to put all parties who might be interested in the property on notice of a claim or the possibility of a claim. This by no means constitutes a complete discussion of construction lien law and should not be interpreted as such. Parties seeking to know more about construction laws in their State should always consult their State statutes directly.
Who can claim a lien in this State?
Maryland law is unusual in that it provides that a party cannot have a lien against property until a suit is filed, a hearing held, and a judge orders a lien be placed. Parties that can begin the process include parties that work on a building that has been erected, repaired, rebuilt, or improved to the extent of 15% of its value. Also, waterlines, sewers, drains, and street developments may be subject to liens, as well as machines, wharves, and bridges. However, “…a building or the land on which the building is erected may not be subjected to a lien under this subtitle if, prior to the establishment of a lien in accordance with this subtitle, legal title has been granted to a bona fide purchaser for value.” Md. Code. Ann. Real Property 9-102.
How long does a party have to claim a lien?
A party seeking to claim a lien must file a petition in the circuit court within one hundred eighty (180) days after the work has been finished or materials furnished. Md. Code. Ann. Real Property 9-105.
What kind of notice is required prior to claiming a lien?
A subcontractor seeking to clam a lien is required to provide written notice of his intent to claim a lien within one hundred twenty (120) days after doing the work or furnishing the materials. Md. Code. Ann. Real Property 9-104.
By what method is a lien filed in this State?
Maryland law requires the filing of a petition for lien before the Circuit court of the county in which the property is situated. A hearing must be held and parties in interest given the opportunity to respond.
How long is a lien good for?
The right to enforce any lien under Maryland law expires at the end of one year from the day on which the petition to establish the lien was first filed. Md. Code. Ann. Real Property 9-109.
Are liens assignable?
Any party classified as a ‘vendor’ for purposes of Maryland’s statutes may assign a lien in the same manner prescribed for the assignment or release of a mortgage. Md. Code. Ann. Real Property 7-204.
Does this State require or provide for a notice from contractors and subcontractors to property owners?
Only to the extent a subcontractor is required to provide a notice of intent ot claim a lien. The notice must be provided within one hundred twenty (120) days from of the last date of work furnished. Md. Code. Ann. Real Property 9-104.
Does this State permit a person with an interest in property to deny responsibility for improvements?
No. Although some states allow a party with an interest in the property to deny responsibility, Maryland law does not contain that provision.
Is a notice attesting to the satisfaction of a lien provided for or required?
No. Maryland’s statutes do not provide or require a written notice of the satisfaction of a lien.
By what method does the law of this State permit the release of a lien?
Maryland’s statutes have no specific provision for the release of a lien other than by expiration of the statute of limitations after one year from the date of the filing of a petition to establish a lien.