FLS Friday Forum is a free write-in column authored by Brian R. Fellner on topics of law affecting community associations. To submit a question, email Mr. Fellner at bfellner@flslawyer.com. All posts are for informational purposes only and do not constitute legal advice. Only your individual attorney can provide assurances that this information is applicable or appropriate to your particular situation. Nothing hereunder creates an attorney-client relationship between any reader and the author.
Does my HOA have to record its Declaration or Bylaws for them to be effective in Maryland?
— Ms. W in Anne Arundel County, Maryland
In order to establish an HOA, the developer will record the Declaration, sometimes referred to as the CC&Rs (Covenants, Conditions, and Restrictions – not these guys) in Land Records. Doing so makes the Declaration itself enforceable against any and all lots to which it refers and against which it is properly recorded. Land Records can be found in each county in Maryland or online, and contains the ownership history, or chain of title, for every indexed property within each county. It also contains claims and restrictions against title, such as an HOA Declaration, a mortgage deed of trust, a tax lien, and more.
Typically for an HOA, the Declaration contains the covenants and use restrictions – that is, it contains a list of things that are prohibited or limited within the Association. In fact, the Maryland HOA Act, found at Maryland Code Real Property, Title 11B, specifically defines the Declaration in § 11B-101 as ” an instrument… recorded among the land records of the county in which the property of the declarant is located, that creates the authority for a homeowners association to impose on lots, or on the owners or occupants of lots… any mandatory fee in connection with the provision of services or otherwise for the benefit of some or all of the lots, the owners or occupants of lots, or the common areas,” and Recorded Covenants and Restrictions are defined as “any instrument of writing which is recorded in the land records of the jurisdiction within which a lot is located, and which instrument governs or otherwise legally restricts the use of such lot.”
So your Declaration must be recorded with Land Records in order to be enforceable against the lots within the Association.
Beyond that, though, the Maryland HOA Act goes further; MD Code, Real Property § 11B-113 provides that each Maryland county (and Baltimore City) shall establish, separate from Land Records, a homeowners association depository that does the following:
— Contains a record of the names of all homeowners associations for the county;
— Contain all disclosures deposited by a homeowners association;
— Is available to the public for viewing and for obtaining copies during the regular business hours of the office of the clerk; and
— Is indexed, maintained by, and charged for by the clerk.
So in addition to the Land Records, where any covenants must be recorded in order to be effective and binding upon a lot, a Maryland HOA faces an additional requirement.
Each homeowners association shall deposit in the depository all disclosures required by certain sections of the HOA Act. The most important requirement of this section is that “the bylaws and rules of the primary development and of other related developments to the extent reasonably available, to which the purchaser shall become obligated on becoming an owner of the lot, including a statement that these obligations are enforceable against an owner and the owner’s tenants, if applicable,” must be deposited with the HOA Depository, as well as any amendment to any of the disclosures required. This section excludes two basic categories of documents: (a) ones that are available elsewhere (e.g. the Declaration as described above or the Articles of Incorporation as described below), and ones that change year to year by definition (such as the budget and the assessment schedule). But the most important part of that section states: “If a homeowners association fails to deposit in the depository any of the disclosures required to be deposited by this section… then those disclosures which were not deposited shall be unenforceable until the time they are deposited.” So the answer to the question posed is that not only do the covenants have to be recorded with Land Records, but the Bylaws and Rules and Regulations for a Maryland HOA must be recorded with the HOA Depository.
Finally, many if not all Maryland HOAs are also incorporated entities. In order to be incorporated, you must file articles of incorporation with the Maryland Department of Assessments and Taxation (or “SDAT”). You can search here to see if your Association has already incorporated, and if so, what its status is. Many associations do not realize, or forget, that they are obligated to file an annual report and personal property tax return to keep in good standing.
These are general concepts for a Maryland HOA to keep in mind to make sure that its documents are properly recorded and enforceable.