REPORTED 

 

IN THE COURT OF SPECIAL APPEALS

 

OF MARYLAND 

No. 1911

 September Term, 2013 

 

 SELECT PORTFOLIO SERVICING, INC. 

v. 

 SADDLEBROOK WEST 

UTILITY COMPANY, LLC, ET AL.

 

 Eyler, Deborah S., 

 Woodward, 

 Berger, 

 JJ.

 

 

Opinion by Eyler, Deborah S., J.

 

 

Filed: August 31, 2016 
2

 In this appeal, we hold that a Declaration recorded by the developer of a 

subdivision created a lien that secured payment of water and sewer charges; the lien 

could be enforced under the terms of the Declaration, without resort to the Maryland 

Contract Lien Act; and the lien has priority over a later recorded refinance deed of trust 

(“DOT”) against the property. Select Portfolio Servicing, Inc. (“SPS”), the appellant, is 

the holder of the DOT. Saddlebrook West, LLC (“Saddlebrook”), and Saddlebrook West 

Utility Company, LLC (“Utility”), the appellees, are the developer and its wholly owned 

subsidiary. Our decision affirms a declaratory judgment entered by the Circuit Court for 

Prince George’s County.

FACTS AND PROCEEDINGS

 In 1999, Saddlebrook embarked on a plan to purchase raw land in Bowie on which 

to build the Saddlebrook West residential subdivision (“the Subdivision”). The first 

phase of the Subdivision was to be comprised of 187 lots on which single family homes 

would be built. That is the only phase of the Subdivision this case concerns.

The parcel of land is located within the Washington Suburban Sanitary District. In 

December of 1999, Saddlebrook and the Washington Suburban Sanitary Commission 

(“WSSC”) entered into a Memorandum of Understanding (“MOU”) by which the WSSC 

authorized Saddlebrook to “construct water and/or sewer extensions” within the planned 

Subdivision, subject to the WSSC’s inspection and approval. Saddlebrook purchased 

bonds to secure its obligation to perform under the MOU. 

 On February 4, 2000, Saddlebrook purchased the parcel of raw land by deed that 
3

was recorded in the Land Records for Prince George’s County (“Land Records”) on 

February 17, 2000. (Liber 13643, Folio 461). Then, on April 4, 2000, Saddlebrook, as 

“Declarant,” executed a “Declaration of Deferred Water and Sewer Charges” (“the 

Declaration”) in favor of Utility. The Declaration imposes an annual Water and Sewer 

Charge on the owner of each lot in the Subdivision, to be paid by the lot owner to Utility. 

As relevant to the issues in this case, the Declaration states:

 Utility intends to provide water and sewer infrastructure and 

connections for the lots.[1] 

 

 To recoup that cost, Saddlebrook will establish an annual Water and 

Sewer Charge on each lot. 

 By accepting his deed, the lot owner agrees to pay Utility the Water 

and Sewer Charge for the lot, and any past due and unpaid such 

charge. The charge for each lot is $700 per year, for 23 years. The 

charge comes due on January 1 of the year following the owner’s 

purchase of the lot.[2] (Saddlebrook and any “Builder” are not lot 

owners.[3]) 

 

 Also by accepting his deed, the lot owner “grants [Utility] a lien to 

 

1

 The Declaration provides that the WSSC shall be responsible for maintaining the 

Water and Sewer Systems within public easements and that each lot owner shall be 

responsible for maintaining the systems on his/her lot. The WSSC shall supply water and 

sewer services to each lot, and each lot owner shall be responsible to pay the WSSC for 

those services.

2

 A lot owner may prepay the total outstanding Water and Sewer Charge at any 

time, at a 6% discount. Saddlebrook and/or Utility may assign or transfer any of the 

rights or powers granted by the Declaration. 

3

 A “Builder” is a person or entity who acquires a lot or lots from Saddlebrook 

“for the purpose of constructing residential dwelling units on such [l]ots for sale or lease 

to others.” 
4

secure payment of” the Water and Sewer Charge. The lien “shall 

have priority from the date upon which this Declaration is recorded . 

. . over any subsequently recorded or created lien, deed of trust, 

mortgage or other instrument encumbering” the lot. 

 The lot owner “grants to [Utility] a power of sale, and assents to the 

entry of a decree and order for the sale of th[e l]ot upon a default by 

the [lot o]wner under this Declaration.” 

 If a lot owner fails to pay the Water and Sewer Charge, Utility shall 

be entitled to all available legal or equitable relief, including 

acceleration of the Water and Sewer Charge; an action at law against 

the lot owner; foreclosure on the “lien” “in the manner now or 

hereafter provided for the foreclosure of mortgages, deeds of trust or 

other liens on real property in . . . Maryland”; and foreclosure on the 

“lien” under the Maryland Contract Lien Act.

 All lots will be held, encumbered, sold, etc., “subject to the 

covenants, conditions, restrictions, obligations and charges set forth 

in this Declaration,” which “shall run with such [l]ots and be binding 

on all parties having any right, title or interest in all or any portion of 

such [l]ots,” etc., and “shall inure to the benefit of [Saddlebrook], 

Utility and their respective successors, transferees and assigns.” 

 

 “All provisions of this Declaration, including the benefits and 

burdens, shall touch, concern and run with the land[.]” 

 

 On May 17, 2000, the Declaration was recorded in the Land Records. (Liber 

13818, Folio 503). An exhibit to the Declaration identifies by lot, block, and plat number 

the 187 lots to which the Declaration pertains. A “Land Instrument Intake Sheet” for the 

Declaration shows that Saddlebrook paid a $75 recordation charge and a $2 surcharge. 

No recordation or transfer taxes were charged and none were paid.

 Saddlebrook paid W.F. Wilson & Sons, Inc. (“Wilson”), to construct and install 
5

the water and sewer facilities for the 187 lots. By letter of November 21, 2000, the 

WSSC certified that the conditions of the MOU had been satisfied and that those lots 

were being released for service. Almost a year later, on October 3, 2001, Saddlebrook 

entered into a “Lot Purchase Agreement” with Maryland Homes, LLC (“Maryland 

Homes”), a builder, for the 187 lots. A copy of the Declaration was attached to the Lot 

Purchase Agreement and “incorporated [t]herein by reference.” Under the terms of the 

Lot Purchase Agreement, Maryland Homes agreed to disclose the existence of an “annual 

deferred water and sewer benefit charge” to any purchaser of a developed lot. It further 

agreed “to include in sales contracts to home purchasers for homes to be constructed all 

required and appropriate notices/disclosures pertaining to the Water and Sewer Systems 

mandated by applicable law[4]

 and acknowledging receipt by the home purchaser of such 

disclosures, which must be furnished at the time of contract.” 

 

4

 The Real Property Article includes notice provisions for the sale of any 

residential real property in Maryland that is subject to deferred water and sewer charges. 

Md. Code (1974, 1996 Repl. Vol., 2000 Supp.), section 14-117(b) of the Real Property 

Article (“RP”) provides:

(b)(1) In this subsection, “water and sewer authority” includes a person to 

which the duties and responsibilities of the [WSSC] have been delegated by 

a written agreement or in accordance with a local ordinance.

(2) A contract for the initial sale of improved, residential real property to a 

member of the public who intends to occupy or rent the property for 

residential purposes shall disclose the estimated cost, as established by the 

appropriate water and sewer authority, of any deferred water and sewer 

charges for which the purchaser may become liable.
6

 The 187 lots were conveyed to Maryland Homes by separate deeds that covered 

one or more lots. The property at issue in this case is lot 5, block J, Plat 20 of the 

Subdivision, later designated 8201 River Park Road (“the Property”). A deed conveying 

that lot and three others to Maryland Homes was recorded in the Land Records on 

November 13, 2001. (Liber 15170, Folio 694). It states that it is subject to “all 

easements, covenants and restrictions of record.” 

 Maryland Homes built single-family homes on all 187 lots. On April 1, 2002, 

Charles Bradley, Jr., purchased the Property for $347,388. He financed the transaction 

by a $351,922 purchase-money mortgage. The deed conveying the Property to Mr. 

Bradley was recorded in the Land Records on April 23, 2002. (Liber 15727, Folio 361). 

It states that it is made “SUBJECT to all easements, covenants, and restrictions of 

record.” 

 On January 1, 2003, Mr. Bradley’s first annual $700 Water and Sewer Charge 

came due. He did not pay it. He also did not pay the $700 Water and Sewer Charge that 

came due a year later, on January 1, 2004.

 On March 1, 2004, pursuant to the Maryland Contract Lien Act (“MCLA”), Md. 

Code (1974, 2003 Repl. Vol.), sections 14-201–206, of the Real Property Article (“RP”), 

Tidewater Property Management, Inc., acting as Utility’s agent, recorded in the Land 

Records a “Statement of Lien” against the Property, for $1,210, for the unpaid Water and 

Sewer Charges. (Liber 19023, Folio 451). On November 17, 2004, it recorded a second 
7

“Statement of Lien” against the Property, for $1,578.80, also for the unpaid Water and 

Sewer Charges. (Liber 20718, Folio 127). Both Statements of Lien recite that the 

Property is subject to the Declaration and that, pursuant to the MCLA, is subject to a lien 

for Water and Sewer Charges, plus the cost to record the Statements of Lien.

 The next year, by deed dated January 6, 2005, Mr. Bradley conveyed the Property 

to Sherrylyn Mitchell for $565,000. The deed was recorded in the Land Records on 

March 8, 2005. (Liber 21579, Folio 001). The deed does not include a “subject to all 

easements, covenants, and restrictions of record” clause, and makes no reference to the 

Declaration. In the deed, Mr. Bradley represents that he “has not done or suffered to be 

done any act, matter or thing whatsoever, to encumber the property hereby conveyed[.]” 

 Ms. Mitchell had been living in the Property since 2002, but the record does not 

disclose the circumstances under which she was living there or her relationship to Mr. 

Bradley.5 A Land Instrument Intake Sheet shows that Ms. Mitchell financed the purchase 

with a $480,250 loan, and that a deed of trust securing the loan against the Property was 

recorded in the Land Records. The deed of trust is not in the record, however, and there 

is nothing in the record showing the source of Ms. Mitchell’s loan. The record includes a 

form document entitled “NOTICE TO PURCHASER OF DEFERRED WATER AND 

SEWER CHARGES,” acknowledging that the Property is subject to the annual Water 

 

5 And this is true even though, as we shall explain, Ms. Mitchell was a party to the 

declaratory judgment action and testified at trial. 
8

and Sewer Charge of $700. Ms. Mitchell’s signature is on the document, next to the date 

“9-1-01,” also in her handwriting. The document also is signed by a representative of 

Maryland Homes, which is described as the “Seller.” That signature is dated “9/4/01.” 

These dates are long before the conveyance to Ms. Mitchell, and indeed pre-date the 

conveyance by Maryland Homes to Mr. Bradley. 

 The Statements of Lien were not paid, cleared, and released upon closing of the 

sale of the Property by Mr. Bradley to Ms. Mitchell. Nothing in the record explains why 

that did not happen.

 Sometime in early 2005, Ms. Mitchell decided to refinance. She applied to Long 

Beach Mortgage Company (“Long Beach”) for a $552,000 loan. Before extending the 

loan, Long Beach ordered a two-party title search of the Property, i.e., a search that 

included Ms. Mitchell and Mr. Bradley, but not prior owners. The search did not reveal 

the Declaration. Also, the person who performed the title search did not find the 

recorded Statements of Lien. On May 25, 2006, Ms. Mitchell settled on the refinance 

loan. The Statements of Lien were not paid, cleared, and released at closing. Ms. 

Mitchell’s refinance loan was secured by the DOT to Long Beach, which was recorded in 

the Land Records on August 18, 2006. (Liber 25810, Folio 228).6

 The Statements of 

Lien expired in 2007. See RP § 14-204(c) (an action to foreclose under a statement of 

 

6 The DOT was re-recorded on November 10, 2009, because as originally recorded 

it did not contain an adequate description of the Property. (Liber 31142, Folio 555).
9

lien must be commenced within three years of the date of recordation).7

 On October 7, 2010, in the Circuit Court for Prince George’s County, agents of 

Utility filed an order to docket, seeking to foreclose on its lien against the Property under 

the Declaration, for non-payment of the Water and Sewer Charges. By then, Long Beach 

had sold Ms. Mitchell’s loan to JP Morgan Chase Bank, N.A. (“Chase”). On March 5, 

2012, Chase filed a motion to stay and dismiss. That same day, it filed the declaratory 

judgment action that gives rise to this appeal. Utility canceled the foreclosure sale and 

voluntarily dismissed the foreclosure case. 

 Chase filed a first amended complaint in the declaratory judgment action, which 

became the operative complaint. Saddlebrook, Utility, Ms. Mitchell, the Saddlebrook 

West Homeowners Association, Inc. (“the HOA”), and Utility’s agents in the foreclosure 

action (“the substitute trustees”) were named as defendants. Also named were the Clerk 

of the Circuit Court for Prince George’s County (“Clerk”), the Director of the Prince 

George’s County Office of Finance (“Finance Director”), and the Director of the State 

Department of Assessments and Taxation (“SDAT Director”) (collectively, the “public 

defendants”). 

 Chase alleged that the Declaration is not a lien instrument and therefore it did not 

create a lien against the Property. It pointed out that if the Declaration were a lien 

 

7 This section was amended in 2008 to extend the period in which to commence an 

action to foreclose to 12 years. See 2008 Md. Laws, Ch. 286. 
10

instrument there would have been no need for Utility to have obtained “Statements of 

Lien” under the MCLA. It asserted that, although the Declaration purports to create a 

lien, it was filed in the Land Records without payment of approximately $60,000 in 

recordation and transfer taxes required to record a lien instrument securing more than $3 

million in Water and Sewer Charges.8

 In Count I, Chase sought a finding that the Declaration is invalid and the DOT is 

the first priority lien against the Property. In Count II, it sought mandamus relief against 

the public defendants, requiring them to “either . . . collect the appropriate taxes from . . . 

Utility or . . . remove the Declaration from the Land Records.”9

 The circuit court granted summary judgment in favor of the public defendants in 

an order stating that “the dispute concerning the priority of the lien must be resolved 

between [Chase] and [Utility and u]ntil that time (if ever) no justiciable controversy 

 

8

 Chase further asserted that Saddlebrook and Utility had “created and recorded” 

the Declaration to “artificially suppress prices for the lots in the [Subdivision] . . . by not 

including the cost of water and sewer improvements in the purchase price of each lot.”

9

 In a third count, Chase alleged that Saddlebrook and Utility had engaged in fraud 

by “draft[ing]” and “record[ing]” the Declaration “in such a manner as to conceal from 

the taxing authorities and the public that the Declaration was intended to be a lien 

instrument.” It sought $750,000 in compensatory damages, $1,500,000 in punitive 

damages, and attorneys’ fees and costs. Chase voluntarily dismissed that count with 

prejudice. 
11

exists between [Chase and the public defendants].”10 The remaining parties engaged in 

discovery. 

 On September 17 and 18, 2013, Chase’s declaratory judgment action was tried to 

the court against Saddlebrook, Utility, and Ms. Mitchell (who was self-represented). 

 

10 As mentioned, Chase also named the HOA and the substitute trustees as 

defendants. Both were served on June 7, 2012. 

The HOA answered the first amended complaint on July 20, 2012 and admitted all 

of the relevant allegations. On August 16, 2012, Chase filed a “Motion for Entry of 

Consent Order.” The pertinent terms of the consent order were that the HOA had a lien 

interest in the Property; that it “consent[ed] and agree[d] that [its] lien interest . . . is 

junior and subordinate in priority to the lien of the [DOT]”; that the consent order would 

be recorded in the Land Records; and that upon entry of the consent order, the HOA 

would be dismissed as a defendant. Over six months later, the Clerk filed a partial 

opposition to the motion for consent order, arguing that the consent order was not an 

appropriate document to be recorded in the Land Records. The record does not reflect 

that the motion for consent order ever was ruled upon by the circuit court. As a result, 

the HOA never was dismissed as a party. 

The substitute trustees never answered the first amended complaint and also were 

not dismissed as parties. 

Ordinarily, a judgment that “adjudicates fewer than all of the claims in an action . . 

. or . . . less than an entire claim, or that adjudicates the rights and liabilities of fewer 

than all the parties to the action” is not final and appealable. Md. Rule 2-602(a) 

(emphasis added). The HOA and the substitute trustees were named as defendants 

because they were interested parties whose rights or interests relative to the Property 

could be affected by the declaration. See Md. Code (1973, 2013 Repl. Vol.), section 3- 

405 of the Courts and Judicial Proceedings Article. The first amended complaint sought 

no relief against them, however. The court’s entry of the declaratory judgment 

adjudicated the rights and liabilities of all of the parties and was a final, appealable 

judgment. 

Moreover, even if existence of the outstanding defendants made the judgment nonfinal, we would exercise our discretion under Rule 8-602(e) to enter a final judgment on 

our own initiative. 
12

Chase called three fact witnesses: John C. Puiles,11 a member of Saddlebrook and the 

managing member of Utility (adversely); Ms. Mitchell (also adversely); and Albert 

Smith, Jr., Chase’s custodian of records. 

 Mr. Puiles recounted the history of the Subdivision and testified that Saddlebrook 

paid Wilson to construct and install the water and sewer facilities for the 187 lots. 

Saddlebrook hired counsel to draft the Declaration. Mr. Puiles identified the MOU 

between the WSSC and Saddlebrook and the contract between Saddlebrook and Wilson, 

under which those facilities in fact were constructed and installed and Wilson was paid. 

He identified the Declaration and the Lot Purchase Agreement. He stated that at the time 

of settlement on the sales of lots by Maryland Homes to lot owners, Maryland Homes 

was required “by contract,” i.e., under the terms of the Lot Purchase Agreement, to 

provide a “NOTICE TO PURCHASER OF DEFERRED WATER AND SEWER 

CHARGES” like the one signed by Mitchell. These documents all were moved into 

evidence.

 Ms. Mitchell testified that since purchasing the Property, she has received bills for 

Water and Sewer Charges. She did not testify whether she has paid these charges.12

 

11 Mr. Puiles’s name appears elsewhere in the record as “Pyles.” We use the 

spelling he gave during his testimony at the trial.

12 Ms. Mitchell also did not testify whether she has made her monthly payments 

on the refinance loan. She stated, however, that “2009 [wa]s the last time [Chase had] 

made a demand for payment” on that loan. Comments by counsel for Saddlebrook and 

 (Continued...) 
13

 Chase called three expert witnesses. Kristy Wingate, a title abstractor, testified 

that lenders typically only order a two-party examination for a refinance loan, and such 

an examination would not have revealed the Declaration. If competently performed, such 

an examination would have revealed the Statements of Lien, however, because they were 

recorded after Mr. Bradley took title to the Property. And the Statements of Lien would 

have resulted in the discovery of the Declaration, because they referenced the Declaration 

by its Liber and Folio numbers.13

 According to Ms. Wingate, if the Declaration had been 

discovered in the title search, the industry standard would have been to report it as an 

exception to the title, not as a lien or encumbrance. 

 Lynne Boileau, an attorney for a title insurance company, opined as well that a 

declaration for water and sewer charges, such as the Declaration in this case, would be 

treated as an exception on a title report, i.e., it would not be covered by the title insurance 

policy. It “affects the property and the use of the property and the way the property 

owner can use the property. So [the] property conveys subject to [the Declaration], and it 

is an important document but we do not view it as an existing lien.” However, “a lien 

could arise if these charges are not paid.” Specifically, she opined that if the water and 

 

(...continued)

Utility in opening statement intimated that there is a foreclosure action against the 

Property, initiated by substitute trustees for Chase, that remains unresolved, likely 

because of the lien priority dispute between Chase and Saddlebrook/Utility. 

13 Every expert witness who testified agreed with this. 
14

sewer charge is not paid, “a statement of lien can be recorded [under the MCLA], and 

that we do view as an encumbrance on property that would have to be paid, cleared and 

released.” Ms. Boileau further opined that were a title insurance company to consider a 

declaration of this sort as creating a lien against the property being conveyed, it would 

not issue a title insurance policy “unless [the] property was either released from the lien 

altogether or it was subordinated, the lien was subordinated to [the loan being issued].” 

 Shawn Goldfaden, a lawyer and underwriter for a title insurance company, 

opined that the Declaration is a “notice instrument” not a “lien instrument.” If he had 

been underwriting a title insurance policy for the Property, he would have agreed “to 

insure title with [the Declaration] shown as an exception in the policy itself.” The 

Declaration would not need to be “satisfied, subordinated, or paid” before a title 

commitment was issued. This is so, Mr. Goldfaden explained, because the Declaration 

gives notice of an annual assessment but does not create a present lien interest that 

“trump[s] . . . priority” over a properly recorded deed of trust securing a loan. 

 At the close of Chase’s case-in-chief, the court granted judgment in favor of 

Saddlebrook and Utility on the claim that the Declaration could not be a valid lien 

instrument because recordation and transfer taxes were not paid. 

 In their case, Saddlebrook and Utility called Brian Bichy, a real estate lawyer, who 

was accepted as an expert in that field. Mr. Bichy testified that he routinely drafts 

declarations for water and sewer charges that are nearly identical to the Declaration. He 
15

has initiated foreclosure proceedings under the power of sale provisions in those 

declarations; and in some of those cases, courts have ratified foreclosure sales. He 

explained that in drafting these declarations he relies upon certain provisions of the Anne 

Arundel County Code (“AACC”) pertaining to deferred water and sewer charges. He 

acknowledged that there is no similar provision in the Prince George’s County Code 

(“PGCC”). 

 Mr. Bichy opined that the Declaration “creates a lien for the water and sewer 

charges based on the covenant that’s recorded in the specific paragraph where each 

owner is granting a lien for repayment of the water and sewer charges, as well as granting 

a power of sale to execute on that lien.” He further opined that the Declaration is a 

covenant running with the land and an “interest against” the Property. He did not express 

an opinion about the lien priority of the Declaration. 

 After the evidence phase of the case concluded and the court heard closing 

arguments, the court directed counsel to submit proposed findings of fact and conclusions 

of law. 

 Chase proposed the following: 1) the Declaration is void because it violates the 

Rule Against Perpetuities; 2) the Declaration is not a covenant running with the land 

because it does not touch and concern the land and because it lacks vertical privity; 3) the 

Declaration does not create a lien, but is a contractual agreement that, when a lot owner 

defaults upon payment of the annual water and sewer charge, Utility may obtain a lien; 4) 
16

in Maryland, the MCLA is the only vehicle by which to obtain a lien against real property 

based on a contract; 5) a lien obtained under the MCLA does not relate back in time, for 

recording purposes, to the date of the contractual agreement to create a lien; 6) the 

Statements of Lien that Utility obtained against the Property were valid, but because they 

expired, they had no impact on the priority of the DOT; and 7) the Declaration is not 

enforceable against third parties because recordation and transfer taxes were not paid. 

 Saddlebrook and Utility proposed the following: 1) the Declaration created a lien 

against each lot that is subject to the Water and Sewer Charges, including the Property; 2) 

the lien was effective on the date the Declaration was recorded, which was before the 

DOT was recorded, and therefore the lien has priority over the DOT; 3) the Declaration 

satisfies the “touch and concern” and vertical privity requirements for a covenant running 

with the land; 4) the Declaration does not violate the Rule Against Perpetuities; and 5) 

the Declaration permits Saddlebrook/Utility to obtain a Statement of Lien under the 

MCLA, but that is not the only remedy available to it, nor does that mean that the 

Declaration did not create a lien. 

 On November 20, 2013, the court docketed its final opinion and order.14 It made 

the following findings of fact and conclusions of law. 

 

14 The court first issued an opinion and order on November 5, 2013. On 

November 20, 2013, it docketed an “Amended Opinion and Order of the Court,” to 

correct a typographical error. Our reference to the final opinion of the court is to that 

amended opinion. 
17

 Under the terms of the Declaration, Saddlebrook was required to install the water 

and sewer facilities for the Subdivision. Because Saddlebrook fulfilled that obligation, 

the Declaration “create[d] a lien.” The lien is “what some refer to as a ‘super lien.’ No 

developer would undertake this development process without legal assurances of 

payment and assurances that such payment would be a priority.” The lien on a lot 

“take[s] effect” when the owner takes title to the lot. In this case, the lien on the Property 

took effect in 2002, when Mr. Bradley purchased the Property. That preceded the 

recording of the DOT in the Land Records. Because it was reasonable to infer that the 

lots in the first phase of the Subdivision would be sold within the perpetuities period, and 

therefore the lien for each lot would arise within that period, the Declaration does not 

violate the Rule Against Perpetuities and is not void. The lien created by the Declaration 

“is a covenant running with the land”; Saddlebrook benefits from the payment by lot 

owners of the Water and Sewer Charges, and the charges “certainly touch the land.” 

 The court further found that because the Declaration was recorded in the Land 

Records, the “world” was on constructive notice of the lien it created. Long Beach’s 

two-party title search did not reveal the Declaration, “despite references to it in a number 

of recorded filings in the land records.” And Long Beach did not order the type of title 

search “that everyone agrees would have revealed the Declaration.” “One who does not 

request a thorough search . . . does so at his peril. . . . Here, [Chase] comes to court 

complaining that it shouldn’t be bound by something it didn’t know about when in fact it 
18

was by its own lack of a competent search that it was unaware.” Finally, Saddlebrook did 

not pay recordation and transfer taxes when the Declaration was recorded in the Land 

Records because none were charged. Any “mistake” in this regard “was the [C]ounty’s 

mistake” and did not affect the validity of the Declaration. 

 The court ruled that the Declaration “is a valid, enforceable first-priority lien 

encumbering the [P]roperty . . . .”15 Although the court did not expressly address Chase’s 

argument that the MCLA was the sole vehicle for enforcement of the lien, it was implicit 

in the court’s lien priority determination that it rejected that argument. 

 Chase noted a timely appeal. During the pendency of the appeal, Chase sold its 

interest in the DOT to SPS, and SPS was substituted for Chase as the appellant in this 

Court.

 SPS presents four questions for review, which we have reordered and rephrased: 

I. Did the trial court err in ruling that the Declaration is not void as in 

violation of the Rule Against Perpetuities? 

II. Did the trial court err in ruling that the Declaration is a covenant 

running with the land and therefore binds downstream purchasers? 

III. Did the trial court err in ruling that the fact that recordation and 

transfer taxes were not paid did not render the Declaration 

unenforceable as a lien instrument? 

 

15 The court also ruled that Chase, the then-current holder of the promissory note 

secured by the DOT, had standing to bring suit and that joinder of the owners of the other 

186 lots subject to the Declaration was not required. Those rulings are not being 

challenged on appeal.
19

IV. Did the trial court err in ruling that the Declaration created a lien that 

could be enforced other than through the process set forth in the 

Maryland Contract Lien Act, and that the lien created by the 

Declaration has priority over the DOT?

Finding no error on the part of the trial court, we shall affirm the judgment.

DISCUSSION

 Before delving into the issues, we shall summarize them, how they interrelate, and 

how SPS maintains their resolution will affect the outcome of this appeal. First, is any 

lien the Declaration created of no effect because the Declaration violates the Rule 

Against Perpetuities and therefore is void? If the answer to that question is yes, it is 

dispositive of the entire appeal. Second, and obviously alternatively, is any lien created 

by the Declaration a covenant running with the land? A negative answer to that question 

also is dispositive, because, if the lien is not a covenant running with the land, Ms. 

Mitchell, as a subsequent purchaser, would not be bound by the obligation to pay the 

Water and Sewer Charges, and the lien would be of no effect as to her or Chase. Third, 

and likewise alternatively, does the fact that recordation and transfer taxes were not paid 

when the Declaration was recorded mean that the Declaration could not create a lien? An 

affirmative answer to this question is dispositive as well.

 Finally, if none of those issues is resolved dispositively, did the Declaration create 

a lien against the Property to secure payment of Water and Sewer Charges, effective 

either when the Declaration was recorded or (as the trial court found) when Mr. Bradley 
20

took title to the Property? If so, can the lien be enforced by Utility, exercising its power 

of sale under the Declaration, through a foreclosure action against the Property, or can the 

lien only be enforced pursuant to the MCLA? If the lien only can be enforced under the 

MCLA, SPS’s DOT has first priority status because the Statements of Lien that Utility 

obtained under the MCLA have expired, and any Statement of Lien it may obtain in the 

future will be effective only from the date it is recorded. If the lien can be enforced 

outside the MCLA process, then whether the lien takes priority over a competing lien 

held by a third party will depend, in part, on whether the third party had adequate notice 

of the lien created by the Declaration when its own lien was recorded. 

I.

Rule Against Perpetuities

 Under the rule against perpetuities, “[n]o interest [in property] is good unless it 

must vest, if at all, not later than twenty-one years after some life in being at the creation 

of the interest.” Dorado Ltd. P’ship v. Broadneck Dev. Corp. 317 Md. 148, 152 (1989) 

(quoting Fitzpatrick v. Mercantile-Safe Deposit & Tr. Co., 220 Md. 534, 541 (1959), in 

turn quoting Gray, The Rule Against Perpetuities, § 201 (4th ed. 1942)). The rule against 

perpetuities applies to a contract that “creates an equitable right in real property.” Id. at 

152. It is designed to invalidate interests in real property that “vest too remotely.” 

Fitzpatrick, 220 Md. at 541. “The term ‘vested,’ as used in the law of property, signifies 

that there has been the fixation of a present right to either the immediate or future 
21

enjoyment of property.” Chism v. Reese, 190 Md. 311, 320 (1948) (citing Curtis v. Md. 

Baptist Union Ass’n, 176 Md. 430, 438 (1939)). “The interest must vest in the sense of 

becoming a vested remainder.” Id. 

In Brown v. Parran, 120 Md. App. 653 (1998), we gave the following 

straightforward description of the rule against perpetuities and the reasons underlying it: 

 The rule against perpetuities is a limitation on contingent future 

interests in property. The rule prevents property interests from vesting too 

remotely, so that current owners will not be discouraged from making the 

most effective uses of their properties. The rule is concerned with 

restrictions that render title uncertain as well as restraints on alienation. 

Under the traditional rule adhered to in Maryland, the future interest, at the 

effective date of the instrument creating it, must vest within the period of 

the rule (life in being plus 21 years).

. . . . [A] court must construe the conveyance in question independent of the 

rule [against perpetuities] and then apply the rule. The rule against 

perpetuities applies to contracts for the sale of real property. . . . If a 

condition of the contract possibly may cause legal title to vest in the 

purchaser outside the period of the rule, the contract violates the rule and is 

not enforceable. 

Id. at 658–59 (citations omitted). 

 SPS contends the Declaration violates the rule against perpetuities, and therefore 

“is unenforceable.” It argues as follows. When the Declaration was executed and 

recorded in the Land Records in April and May of 2000, Saddlebrook intended to 

subdivide its raw land into lots, install water and sewer facilities, and sell the lots to a 

builder, which would build single family homes on the lots and sell them to individual 

owners. Under the Declaration as interpreted by the trial court, when an individual owner 
22

takes title to his lot, he grants the Utility a lien against the lot for Water and Sewer 

Charges. At that point, the lien vests. When the Declaration was executed and recorded, 

however, it was not possible to know that any of the 187 lots in the first phase of the 

Subdivision ever would be sold to individual lot owners within 21 years of a life in being. 

Therefore, according to SPS, “the future vesting of [the] lien interest violates the Rule 

Against Perpetuities, because it may vest too remotely.” SPS asserts that the trial court 

erred as a matter of law by reading into the Declaration a reasonable time, within the 

perpetuities period, by which the lots would be sold to individual owners and the lien 

would vest.

 SPS relies upon Dorado, 317 Md. 148, to support its argument. In that case, two 

parties entered into a contract for the sale of 112 lots of real property, which the buyer 

intended to develop. The contract stated: 

Buyer agrees to purchase and settle on [the 112] lots covered by the 

Contract of Sale by payment of the purchase price in cash not later than 

ninety (90) days after the Seller has delivered to Buyer evidence of sewer 

allocations for such lots. Time is of the essence of all the provisions of the 

Contract of Sale. 

Id. at 150 (emphasis added). 

 The county in which the lots were located had imposed a moratorium on sewer 

allocations. The seller attempted to obtain sewer allocations, but could not do so because 

of the moratorium. The seller brought a declaratory judgment action against the buyer, 

seeking an adjudication, on several alternative grounds, that the contract of sale was void. 
23

One argument the seller advanced was that the contract violated the rule against 

perpetuities because the buyer’s fee simple interest in the lots might not vest within the 

perpetuities period. Specifically, the seller argued that whether legal title to the lots 

would be delivered to the buyer was contingent upon the seller’s obtaining sewer 

allocations, and there was no certainty that that ever would happen. The circuit court 

rejected that argument and the seller’s alternative arguments. On appeal, this Court 

reversed based on an alternative argument.

 The Court of Appeals took the case and held that the contract of sale violated the 

rule against perpetuities and therefore was void. It recognized that in some 

circumstances, when a contract does not specify a time for performance, the court may 

imply a reasonable time for performance. It concluded that it is not proper for a court to 

do so when the time for performance is contingent upon the happening of an event 

outside the control of either party to the contract. The seller had applied for the sewer 

allocations, which were not granted because of the moratorium, and there was nothing 

more either the buyer or the seller could do to satisfy the sewer allocation contingency. 

Only the county could lift the moratorium and grant the sewer allocations, and whether it 

would do so within the perpetuities period was unknown. The Court explained, “[W]here 

the occurrence of the condition precedent to conveyance is beyond the control of the 

parties, a reasonable time for performance, less than the perpetuities period, cannot be 

implied.” 317 Md. at 158. 
24

 Saddlebrook and Utility point out that several cases decided by this Court have 

distinguished Dorado, thereby clarifying its holding. In Stewart v. Tuli, 82 Md. App. 726 

(1990), sellers of residential real property entered into a contract of sale with a buyer, but 

declared the contract void when the buyer’s financial information was not satisfactory. 

The sellers then entered into a second contract of sale with another buyer. An addendum 

provided that if the first buyer “attempted to keep ‘his contract alive,’” the second buyer 

would be relieved from going to settlement until such time as the sellers could grant clear 

title. Id. at 729. The contract also included a clause concerning “TITLE,” in which the 

sellers agreed to convey title and that, “‘[i]n case legal steps are necessary to perfect the 

title, such action must be taken promptly by [the sellers] at [their] own expense’” and the 

time for settlement would be “‘extended for the period necessary for such prompt 

action.’” Id. at 735. 

 The first buyer filed a complaint for specific performance of his contract against 

the sellers, arguing, among other things, that the second contract was void because it 

violated the rule against perpetuities. The second buyer filed a motion to intervene, 

which the circuit court denied. The second buyer appealed. We held that the second 

buyer was entitled to intervene as of right, and went on to address the perpetuities issue. 

 Relying upon Dorado, the first buyer argued that the provision in the second 

contract extending the time for performance until the sellers could convey clear title 

made the time for performance so indefinite that it could not be said that clear title would 
25

be delivered within the perpetuities period. We rejected that argument, explaining that it 

was central to the Court’s holding in Dorado that the occurrence of a condition precedent 

to the sale was in the hands of a third party and outside the control of the parties. By 

contrast, the sellers had it within their control to bring an action in court to obtain clear 

title, and “the contract mandated that any title clearing litigation be completed within a 

reasonable period of time.” Id. at 736. Even though the outcome of any such litigation 

would be in the hands of a court, not the sellers, the title clearing litigation was to be 

resolved in a reasonable period of time, and “[i]t would be ridiculous to suggest that a 

reasonable period of time would exceed a life in being and 21 years.” Id. 

 The year after Stewart was decided, this Court again rejected an argument that a 

contract for the sale of land violated the rule against perpetuities because the time for 

performance had been extended indefinitely until the sellers could convey clear title. In 

Hays v. Coe, 88 Md. App. 491 (1991), unlike in Stewart, there was no contract provision 

requiring that action to correct title problems be taken within a reasonable period of time. 

Nevertheless, we read the contract of sale to imply a reasonable time in which to correct 

any title defects. We held that that time would occur within the perpetuities period, and 

therefore the contract did not violate the rule against perpetuities. The Court of Appeals 

vacated our decision on another ground, but held that the perpetuities issue was properly 

decided. Coe v. Hays, 328 Md. 350, 362 (1992). 

 Finally, in Brown v. Parran, 120 Md. App. 653, we synthesized the holdings in 
26

Dorado, Stewart, and Hays. The parties’ contract for the sale of real property 

conditioned settlement upon the issuance of building permits for 21 building sites. It did 

not specify a time by which that condition had to be performed, however. The circuit 

court, citing Dorado, held that the contract violated the rule against perpetuities because 

the condition might not be satisfied within the perpetuities period.

Distinguishing Dorado, and applying Stewart and Hays, this Court reversed. We 

explained that, in Dorado, the process that had to be undertaken to satisfy the sewer 

allocation contingency was not available at all, due to the moratorium. So, not only was 

the process in the hands of a third party, the process could not be used; and the “duration 

of [the] moratorium [was] uncertain and dependent upon governmental and political 

policy decisions.” 120 Md. App. at 664. In that circumstance, “a reasonable time to 

satisfy, if possible, [the] criteria specified in statute or regulation is not ascertainable by 

the court[,]” and consequently cannot be implied in the contract. Id. By contrast, in 

Stewart and Hays, the process for satisfying the clear title contingencies was in the hands 

of a third party (a court), but was available to the parties, and a court could imply a 

reasonable period of time in which the contingency could be satisfied. We concluded 

that “just as it would be ridiculous to presume that title clearing litigation might take 21 

years to complete, it would be ridiculous to presume that it might take [the county 

authorities] 21 years to act on [the seller’s] application for permits.” 120 Md. App. at 

663 (footnote omitted). 
27

 We return to the case at bar. As noted, SPS maintains that, when the Declaration 

was executed and recorded, it was impossible to know whether, once the builder 

purchased the lots, any lot would be completed and sold within 21 years of a life in being; 

or, because there is no designated life in being, within 21 years. In other words, because 

it was possible that the builder would construct the homes on the lots but not a single one 

of them would be sold before 2022, the Declaration’s provision regarding liens against 

the lots for Water and Sewer Charges violates the rule against perpetuities. And, the trial 

court erred by reading the Declaration to imply a reasonable period of time in which 

homes on the lots would be sold to individual owners. This argument is not supported by 

the case law.

 The case at bar has little in common with Dorado, or with the other pertinent rule 

against perpetuities cases for that matter. There is no actual contingency to the vesting of 

the interest in real property like those at issue in the relevant cases. The development of 

land into a residential subdivision begins with the purchase of the real property for 

development and ends with the sales of newly constructed homes to individual 

purchasers. Those sales simply are the expected last step in the development. Obviously, 

there would be no point in developing a residential subdivision if it were not reasonable 

to assume that, when construction is complete, the buyers will come. 

 In any event, SPS acknowledges that Saddlebrook was in control of the timing of 

the subdivision process up to the point when the completed homes would be offered for 
28

sale. The trial court read the Declaration to imply that the sales of the newly constructed 

homes in the Subdivision to individual lot owners would take place within a reasonable 

period of time and that that reasonable period of time would be less than a life in being 

plus 21 years, and indeed less than 21 years. The trial court’s ruling in this regard was 

consistent with the law of contracts, which, in the absence of a time for performance in a 

contract, permits a court to imply a reasonable time for performance, and with the cases

discussed above, which hold that when a contingency to the conveyance of an interest in 

real property can be satisfied by means of a process by which the contingency can be 

removed, and the parties, or one of them can access that process, a court can imply a 

reasonable time by which the contingency can be removed. See Brown, 120 Md. App. at 

663. 

 Here, the supposed “contingency” is the sale of the finished homes to home 

buyers, which is what everyone involved in the development of a residential subdivision 

expects to happen. There is no inaccessible “process” that must be used to satisfy this 

“contingency.” The language used by this Court in Stewart and Brown is appropriate 

here: to the extent the sales of homes in the Subdivision is a contingency at all (which it 

is not), it is ridiculous to think that the homes would not be sold within 21 years of the 

execution and recording of the Declaration. The lien provision of the Declaration does 
29

not violate the rule against perpetuities.16

II.

Covenant Running With the Land

 SPS contends the Declaration’s requirement that lot owners pay Water and Sewer 

Charges is not a covenant running with the land; therefore, the obligation to pay does not 

apply to “downstream” purchasers of the lots. And, because the downstream purchasers 

have no obligation to pay the Water and Sewer Charges, there can be no liens against 

their properties for those charges.

In Gallagher v. Bell, 69 Md. App. 199 (1986), we explained: 

Covenants made by parties to the conveyance of an interest in land may be 

regarded as being either personal in nature or as running with the land. The 

difference, as observed in 5 R. Powell, The Law of Real Property, § 673[1], 

p. 60-66, “hinges upon whether the original covenanting parties’ respective 

rights or duties can devolve upon their successors.”

Id. at 206. For a covenant to run with the land, it must “touch and concern” the land; the 

original parties to the covenant must have intended that it run with the land; there must be 

some form of privity of estate; and the covenant must be in writing. Cnty. Comm’rs of 

Charles Cty. v. St. Charles Assocs. Ltd. P’ship (“St. Charles”), 366 Md. 426, 450 (2001);

Mercantile-Safe Deposit & Tr. Co. v. Mayor and City Council of Baltimore, 308 Md. 

627, 632 (1987). 

“Whether a covenant touches and concerns the land may be considered in terms of 

 

16 In fact, all 187 homes in the first phase of the Subdivision have been sold. 
30

the burdens or benefits it imposes. Thus, the test is met if the performance of the 

covenant will ‘tend necessarily to enhance [the] value [of the land].’” Mercantile, 308 

Md. at 633 (quoting Whalen v. B&O R.R. Co., 108 Md. 11, 20 (1908) (alterations in 

Mercantile)). The touch and concern test is in the alternative; that is, it will be satisfied 

if, upon performance of the covenant, either the burden or the benefit of the covenant 

will tend to enhance the value of the land. Id. 

 The benefit or burden of a covenant “will not pass to a successor in interest unless 

the parties intended that result.” Gallagher, 69 Md. App. at 212 (footnote omitted). The 

intention of the parties may be gleaned from the language of the agreement alone or from 

that language and other indicia of intent. Bright v. Lake Linganore Ass’n, 104 Md. App. 

394, 418 (1995). However, “a covenant that, by its very terms, runs with the land may 

not be enforceable if the parties creating the covenant intend that it not run.” Id. at 421. 

The presence or absence of language in the parties’ agreement that binds successors and 

assigns is of “‘critical effect.’” St. Charles, 366 Md. at 448 (quoting Mercantile, 308 Md. 

at 635). A covenant respecting a future obligation may run with the land when “‘the 

performance of the covenant touches and concerns the land within the meaning of the 

“benefit or burden” standard,’” and the agreement “‘expressly binds successors and 

assigns.’” Id. (quoting Mercantile, 308 Md. at 636). 

Privity of estate can be satisfied by proof of “vertical privity,” which “focuses . . . 

on the devolutional relationships.” Gallagher, 69 Md. App. at 217. For vertical privity 
31

to be satisfied, it only is necessary that “‘the person presently claiming the benefit, or 

being subjected to the burden, is a successor to the estate of the original person so 

benefitted or burdened.” Id. at 216 (quoting Powell, supra, § 673[2], 60-64). 

 SPS argues that, as a matter of law, the obligation to pay Water and Sewer 

Charges as established by the Declaration is not a covenant running with the land, for 

three reasons, the first two of which relate to the “touch and concern the land” 

requirement. It maintains that a covenant “must extend to the land, so that the thing 

required to be done will affect the quality, value or mode of enjoying the estate 

conveyed,” id. at 209 (emphasis added); but here, the Declaration did not require 

Saddlebrook or Utility to build the water and sewer facilities or to do anything at all. In 

other words, there was no burden on Saddlebrook or Utility. Second, even if the 

Declaration required Saddlebrook or Utility to build the water and sewer facility, or to do 

or refrain from doing something else respecting the Subdivision property, under Sanitary 

Facilities II v. Blum, 22 Md. App. 90 (1974), the promise by downstream purchasers of 

lots to pay for the previously constructed facilities does not touch and concern the land, 

because that does not benefit or burden the use, occupation, or enjoyment of the estate 

while it is owned by the covenanting parties. Finally, SPS’s third argument is that the 

privity of estate element is not satisfied because Utility, the entity that benefits from the 

payment of the Water and Sewer Charges by lot owners, is not in vertical privity with any 

downstream purchaser. 
32

There is no merit in any of these arguments. 

 We disagree that the Declaration did not impose any obligation upon Saddlebrook 

or Utility to build the water and sewer facilities for the 187 lots. The recitals to the 

Declaration, which are “incorporated in and made a material part of this Declaration,” 

state that Saddlebrook and Utility “intend to provide the Lots with access to and service 

from sewer pipes and transmission lines in the streets and/or in the public rights-of-way,” 

and with “house connections” thereto, i.e., “Sewer Facilities”; and “intend to provide the 

Lots with access to and service from water pipes and transmission lines in the streets 

and/or the public rights-of-way,” and with “house connections” thereto, i.e., “Water 

Facilities.” It is upon Saddlebrook’s and Utility’s performance of their intended acts—

actually constructing the water and sewer facilities—that the promise by each lot owner 

to pay the annual Water and Sewer Charges comes to fruition. 

The Declaration cannot reasonably be read to mean that Saddlebrook and Utility 

were not undertaking an obligation to construct the water and sewer facilities. Without 

water and sewer facilities, there could be no residential development at all. This was not 

a stated intention to build an amenity that was peripheral to the development and not 

necessary to the development coming into existence. It was a promise to build the water 

and sewer facilities necessary for the subdivision to be built; and only upon doing so 

would the lot owners become obligated to pay the annual Water and Sewer Charges. In 

addition, the evidence included the MOU between Saddlebrook and the WSSC, by which 
33

Saddlebrook agreed to build the water and sewer facilities with the WSSC’s supervision 

and approval. And of course that is what Saddlebrook did. 

 On the second point, Sanitary Facilities II, 22 Md. App. at 90, is easily 

distinguishable from the case at bar and illustrates why there is no merit in the first point. 

In that case, a developer owned several companies through which he did business. One 

such company, Registered Realty, Inc. (“Registered”), purchased raw land on which to 

develop a subdivision. Two years later, Registered conveyed it to Sanitary Facilities II, 

Inc. (“SF”), another such company. SF immediately reconveyed the land to Registered 

by a “Deed and Agreement” that stated that Registered intended to construct water and 

sewer facilities for the lots in the subdivision and that it was the purpose of the Deed and 

Agreement to make a covenant and agreement to pay water and sewer charges (calculated 

like a front-foot benefit) that would run with the land and be binding upon each lot and 

the future owners of the lots; and that the annual charge would be a lien on the future lot 

owners’ land. Registered quickly conveyed the land to Babs, Inc. (“Babs”), a third 

company under the control of the same developer, with a warrant by Babs to install the 

water and sewer facilities for the subdivision. All these documents were recorded in the 

land records.

 Two years later, Babs entered into a contract with Cosle Contractors (“Cosle”) to 

build the water and sewer facilities for the subdivision. Babs then contracted to sell the 

land to Windward, a third party having no connection to the developer or to any of his 
34

companies. Windward assumed Babs’s contractual obligation to Cosle. In the agreement 

of sale, Babs promised that, at Windward’s request made before settlement, Babs would 

release all obligations of record pertaining to the property, including the obligation of lot 

owners to pay a water and sewer charge. For reasons not explained, Windward failed to 

request a release before settlement.

 Windward paid Cosle to construct the water and sewer facilities and then 

conveyed the lots to a builder. Within two weeks, SF filed a “Declaration” in the land 

records that set forth a schedule for ultimate lot owners to follow to pay the water and 

sewer charges, which amounted to $28,500 annually for all the lots combined, for a 

period of 30 years. Of course, neither SF nor the developer, nor any of its related 

companies, had paid anything toward the cost of constructing the water and sewer 

facilities, or had any outstanding obligation to pay anything.

Eventually, houses were built on the lots and were sold to the ultimate lot owners. 

Upon receiving their first bills for the annual water and sewer charge, the lot owners 

brought suit to clear title to their properties, arguing that the water and sewer charge was 

a cloud on their title. In the circuit court, they argued successfully that the Declaration 

was not a covenant running with the land. 

 This Court affirmed on appeal. We held that the language of the Deed and 

Agreement, stating that the obligation to pay the water and sewer charge would run with 

the land, was not a covenant running with the land. “[A] covenant or condition or burden 
35

does not attach to land conveyed merely by virtue of the words employed by the 

conveyancer.” 22 Md. App. at 102-03 (citing Glenn v. Canby, 24 Md. 127, 130 (1886)). 

Rather, there must be a burden or benefit that touches and concerns the land and passes 

with the ownership of the land. “‘Ordinarily . . . a covenant is regarded as touching and 

concerning the land if it is of value to the covenantee by reason of his occupation of the 

land or by reason of an easement which he has in the land, or if it is a burden on the 

covenantor by reason of his occupation of the land.’” Id. (quoting Tiffany, Real Property 

(3rd ed.) § 854, at 455). 

 Registered held the land in fee simple, and “[n]othing it or [SF were] required to 

do, or refrain from doing, by the Deed and Agreement either benefitted or burdened its 

use, occupation, or enjoyment of the estate except collaterally, by virtue of its contractual 

obligation to subject subsequent grantees to the charges.” Id. at 103 (emphasis in 

original) (footnote omitted). “It would be difficult to conceive of a covenant more 

‘personal’ in nature and therefore less capable of ‘running with and binding the land’ 

than this agreement by Registered to do nothing with respect to the use or enjoyment of 

the property but only to establish facilities charges affecting remote grantees.” Id. at 104. 

 In the case at bar, Saddlebrook and Utility, unlike Registered and SF, entered into 

a contract for construction of the water and sewer facilities in the Subdivision. Wilson 

built the water and sewer facilities, and Saddlebrook and Utility paid it to do so. This 

case resembles Chesapeake Ranch Club, Inc. v. C.R.C. United Members, Inc., 60 Md. 
36

App. 609 (1984), in which we held that a covenant by purchasers of lots in a subdivision 

to pay for the construction, maintenance, and repair of streets in the subdivision was a 

covenant that touched and concerned the land, and ran with the land. In that case we 

said:

“The test whether a covenant will or will not run with the land depends not 

so much on whether it is to be performed on the land itself as on whether it 

tends directly or necessarily to enhance its value or render it more 

beneficial or convenient to those by whom it is owned or occupied. Those 

covenants that are generally held to run with the land and to insure to the 

benefit of the assignee are such as ordinarily affect the land itself and 

confer a benefit on the grantor.” 

Id. at 616 (quoting 20 Am. Jur. 2d Covenants § 35 (1965 Cum. Supp. 1983) (footnotes 

omitted). See also Wehr v. Roland Park Co., 143 Md. 384 (1923) (holding that covenant 

to pay annual fee for maintenance of services relating to land touch and concern the 

land).

 To be sure, in this case, Saddlebrook and Utility did not agree to make ongoing 

repairs to the Water and Sewer Facilities. We do not think that makes a difference. They 

undertook to install the facilities, to the benefit of the land, as without the facilities the 

lots would not be able to be used for residences; and that benefit continued beyond the 

time the facilities originally were installed.

 Finally, SPS’s argument that Saddlebrook and Utility were not in vertical privity 

with the lot owners hearkens back to its argument that they had no obligation to install 

the Water and Sewer Facilities under the terms of the Declaration, and thus they were not 
37

“burdened.” In fact, they were obligated to install the facilities, and they performed on 

that obligation; and the benefit of that performance will be enjoyed not only by the 

original lot owners but by their successors. As noted, there is vertical privity when “‘the 

person presently claiming the benefit, or being subjected to the burden, is a successor to 

the estate of the original person so benefitted or burdened.’” Gallagher v. Bell, 69 Md. 

App. at 216 (quoting Powell, supra, § 673[2], at 60-64). That relationship exists here. 

 SPS tacitly concedes that the Declaration expresses the intention that the 

obligation to pay the Water and Sewer Charges will be a covenant running with the land. 

In other words, not only does the Declaration state that it is a covenant running with the 

land, it was the intention that it be a covenant running with the land. Also, the 

Declaration contains language that expressly binds “successors and assigns,” which is 

“‘strong evidence of the devolutive intent’ of the parties.” St. Charles, at 452 (quoting 

Mercantile, 308 Md. at 627, 638). The Declaration satisfies the four criteria necessary to 

be a covenant running with the land. Therefore, it is binding not only on the original lot 

owners, but on their downstream purchasers.

III.

Recordation and Transfer Taxes

 SPS contends the trial court erred in granting Saddlebrook and Utility’s motion 

for judgment on its claim that, if a lien were created by the Declaration and the 

Declaration is a lien instrument, it cannot be enforced because recordation and transfer 
38

taxes that must be paid for a lien instrument to be recorded were not paid. SPS maintains 

that Saddlebrook and/or Utility were obligated to pay a County Transfer Tax at a rate of 

1.4% of the debt secured and a State Recordation Tax at a rate of $2.75 per $500 in debt 

secured.17,18

 SPS calculated the unpaid County tax to be $42,149.82 and the unpaid State 

tax to be $16,557.75.19 According to SPS, the failure to pay recordation and transfer 

taxes deprives the Declaration of any status it might otherwise have had as a recorded 

lien instrument, making it ineffective to put SPS (or any other subsequent lienholder) on 

constructive notice of its existence.

 Saddlebrook and Utility respond that SPS lacks standing to assert a violation of 

the recording statutes. They maintain that because any violation of those statutes would 

be a “public wrong,” SPS must show that it suffered special damages different in 

character and kind from that suffered by the general public in order to seek redress. 

Because SPS did not meet this burden or show that there is a private cause of action for 

enforcement of the recording statutes, the trial court did not err by granting summary 

judgment on this claim. 

 

17 See PGCC, §§10-187 – 10-188. 

18 See Md. Code (1985, 2012 Repl. Vol.), §§ 12-103 & 13-402.1 of the TaxProperty Article (“T-P”). 

19 SPS arrived at these amounts by multiplying the amount of the annual water and 

sewer charge ($700) by the number of lots (187), for a total debt of $3,010,700 secured 

by the Declaration. It applied the County and State assessment rates to this figure to 

calculate the total tax. 
39

 In its reply brief in this Court, SPS concedes that it must show special damages in 

order to redress an alleged violation of the recording statutes, but argues it has satisfied 

that burden. It asserts that if Saddlebrook and Utility are “granted the benefits of a 

recorded lien without payment of the excise tax for said benefit,” it will suffer special 

damage because the DOT will be “junior and subordinate” to the lien created by the 

Declaration.

 The trial court ruled that the “failure to pay [County and state recordation and 

transfer taxes] was not due to the fault, refusal, or negligence of [Saddlebrook or 

Utility].” Rather, no taxes were requested and any “mistake . . . was the [C]ounty’s 

mistake” and could not be chargeable to Saddlebrook or Utility. The court reasoned that 

the result may have been different had Saddlebrook or Utility been invoiced for taxes and 

failed to pay them. 

We perceive no error in the court’s ruling. An “allegedly unlawful action[] of the 

government” that affects all members of the public equally is a “public wrong.” State 

Center LLC v. Lexington Charles Ltd. P’Ship., 438 Md. 451, 518 (2014). The failure to 

collect transfer or recordation taxes is this type of wrong because the direct harm it 

causes - a loss of tax revenue - falls equally on all citizens. “In situations where the 

complainant is seeking to redress a public wrong, he has no standing in court unless he 

has also suffered some special damage from such wrong differing in character and kind 

from that suffered by the general public.” Weinberg v. Kracke, 189 Md. 275, 280 (1947); 
40

accord 120 W. Fayette St., LLLP v. Mayor & City Council of Baltimore, 407 Md. 253, 

270 (2009). 

In the case at bar, the court made a non-clearly erroneous finding that the Clerk 

did not charge Saddlebrook or Utility any recordation or transfer taxes at the time the 

Declaration was filed. SPS did not suffer any special damage arising from the Clerk’s 

failure to impose these taxes. The subordination of the DOT to a lien created by the 

Declaration arose not from the failure to pay taxes, but from the recordation of that 

instrument in the Land Records prior to the recordation of the DOT. Thus, SPS lacks 

standing to assert a claim arising from the violation of the recording statutes. 

IV.

Lien Creation, Enforcement, and Priority 

 As explained, the trial court found that the Declaration created a lien against the 

Property securing payment of the annual Water and Sewer Charges; that the lien took 

effect on April 1, 2002, the date that Mr. Bradley took title to the Property; and that the 

lien had priority over SPS’s later recorded DOT. By implication, the trial court rejected 

SPS’s argument that a lien for payment of the annual Water and Sewer Charges only 

could be created and enforced under the MCLA. 

 Whether the Declaration created a lien against the Property and, if so, whether that 

lien has priority over SPS’s DOT is a complex legal question that concerns the statutory 

obligation of owners and developers in the sanitary district to pay for water and sewer 
41

facilities, the law of priority of liens against real property, interpretation of the language 

of the Declaration, the rights of lienholders to force a sale of property, and the 

application, if at all, of the MCLA. To the extent the trial court made factual findings to 

support its legal conclusion that the Declaration created a lien against the Property that is 

superior to SPS’s DOT, we accept those findings unless they are clearly erroneous. See 

Md. Rule 8-131(c). We decide the relevant legal issues de novo. E.g., L.W. Wolfe 

Enters. v. Md. Nat’l Golf, L.P., 165 Md. App. 339, 344 (2005). 

(a)

 The genesis of the lien creation and priority dispute in this case is a 1999 

amendment to the statute governing the WSSC. The WSSC “operates the public water 

supply, sewage collection and treatment, and storm water management systems in most 

of Prince George’s and Montgomery counties.” WSSC v. Lafarge N. Am., Inc., 443 Md. 

265, 269 (2015). Ever since the sanitary district was established in the early 1900s, one 

of the WSSC’s functions has been to construct water mains and sewers that “the 

Legislature has ‘declared to be a benefit to all property abutting the same.’” Manor Real 

Estate Co. v. Jos. M. Zamoiski, Co., 251 Md. 120, 130 (1968) (quoting PGCC § 83-71(a) 

(1963)). The water and sewer facility construction is funded by the sale of bonds, and, as 

permitted by the General Assembly, the WSSC then raises money to retire the bonds by 

“‘fix[ing] and levy[ing] a benefit charge upon all abutting property.’” Id. (quoting PGCC 

§ 83-71(a)). The benefit charge is to “‘be paid annually, beginning from the time of the 
42

levy thereof, by all properties, . . . for a period of years coextensive with the period of 

maturity of the bonds out of the proceeds of which such construction (or acquisition) was 

done.’” Id. (quoting PGCC § 83-71(f)). See also WSSC v. Noel, 155 Md. 427, 435 (1928) 

(stating that the legislature may “require the entire cost of an installation of improvement 

to be defrayed by front-foot assessments on properties within a specially benefitted 

district”). 

 Md. Code (1998, 2010 Repl. Vol.), section 25-204 of the Public Utilities Article 

(“PU”), in which the WSSC’s “Benefit charges” authority presently is codified, requires 

that, once the benefit is afforded, the property owner must pay the benefit charge to the 

WSSC “annually for a period of years equal to the period of maturity of the bonds the 

proceeds of which financed the construction of the water main or sewer.” PU § 25-

204(d)(1). “Each benefit charge imposed under this subtitle is a lien against the property 

that continues until the benefit charge is paid and the account is extinguished in 

accordance with this subtitle.” PU § 25-204(e). 

 Even though front-foot benefit charges are not a tax, see Chevy Chase Bank, FSB 

v. Chaires, 350 Md. 716, 731 (1998), they are treated as county taxes for purposes of 

collection, see Manor Real Estate, 251 Md. at 131, and the failure to pay when due 

subjects the property to being sold at tax sale. See PU § 25-214(c)(5) (providing that a 

property that is “subject to a delinquent benefit charge shall be sold for the delinquent 

benefit charge at the same time and in the same manner as property sold for delinquent 
43

county taxes”). Like unpaid taxes on real property, a delinquent benefit charge on real 

property is a lien on the property from the date it becomes payable until the date it is paid 

and is a first lien. See T-P § 14-804(a); T-P § 14-805(a); In re Reamy, 169 Bankr. 352, 

353 (Bankr. D. Md. 1994) (In Maryland, property taxes only become a lien against the 

property of the owner when they are due and unpaid.). If the benefit charge remains 

unpaid, the property is put up for sale by the tax collector. T-P § 14-808. The property 

owner or any other person with an estate or interest in the property may redeem it, T-P § 

14-827; and any suit to foreclose the right of redemption must include any mortgagee or 

trustee under a deed of trust. T-P §14-836. Notice of the right to redeem must be given 

to the current mortgagee or its assignee or servicer or to the current holder of a beneficial 

interest in a deed of trust. If the property is not redeemed, the statutory first lien for real 

estate property taxes takes priority over all other liens on the property in favor of private 

parties, regardless of whether those liens were recorded before or after the first priority 

lien for real estate taxes. Edmondson v. Chesapeake Clamchip Corp., 350 F. Supp. 1236, 

1238 (D. Md. 1972). 

 Likely because the tax sale process is clear cut, and the right to redeem may be 

exercised by a mortgagee or deed of trust beneficiary to avoid possible negative 

ramifications for its interest of not redeeming the property, there are no Maryland lien 

priority cases involving front-foot benefit charges. The only cases that concern front-foot 

benefit charge liens involve disputes between property owners and title companies over 
44

the extent to which an obligation to pay front-foot benefit charges is a lien or an 

encumbrance. See, e.g., Strass v. District-Realty Title Ins. Corp., 31 Md. App. 690 

(1976).

 The change in the law that concerns us is the statutory amendment that since 1999 

has required owners or developers of construction projects for two or more residences in 

the sanitary district to build the water and sewer facilities in their planned subdivisions 

themselves, at their own expense. See PU § 23-201(c). Before undertaking construction, 

an owner or developer must enter into an agreement with the WSSC by which the WSSC 

approves the plans and specifications and supervises the construction, and the owner or 

developer must provide the WSSC performance security and releases of liens held by 

contractors, subcontractors, and suppliers. Id. at (d). The statute as amended does not 

include a provision by which the owners or developers may recoup their costs. One way 

for them to do so is to pass the costs of building water and sewer facilities on to a builder 

to whom the lots are sold (or, if the lots are sold directly to the ultimate purchasers, to 

incorporate the costs in the sales prices of the homes). Saddlebrook did not pass its costs 

on to Maryland Homes. Instead, it sought to obtain repayment by contract (through the 

Declaration) with the ultimate home purchasers, over a period of years.

(b) 

 As in most jurisdictions, in Maryland a deed or “other instrument” that is first 

recorded in the land records takes priority over later recorded instruments, except as 
45

against a bona fide purchaser for value without notice. RP § 3-203. So, when there is 

more than one lien against the same property, “lien priority is usually determined by 

recording date: lienholders with earlier-recorded liens have priority over lienholders with 

later-recorded liens.” Glen Burnie Mut. Savings Bank v. U.S., 733 F. Supp. 2d 623, 625 

(D. Md. 2010). There are exceptions to this general rule for tax liens and other liens 

securing government fees, see Md. Code (1988, 2010 Repl. Vol., 2015 Supp.), section 

13-809(a) of the Tax General Article (providing that a tax lien “shall be first paid and 

satisfied from the proceeds of a sale of any property of a person liable for the tax”), and 

for purchase money mortgages or deeds of trust. See RP § 7-104 (providing that those 

lien instruments take priority over earlier recorded liens). See also Glen Burnie Mut. 

Savings Bank, 733 F. Supp. 2d at 625. At the relevant time in this case, refinance 

mortgages and deeds of trust did not have such priority.20

 

 As discussed above, the trial court ruled that the Declaration created a lien and that 

the lien it created had priority over SPS’s DOT.21 On review, we first must decide 

 

20 In 2013, the Real Property Article was amended to extend the same priority to 

refinance mortgages and deeds of trust that meet certain requirements. 2013 Md. Laws, 

Ch. 205. The General Assembly stated its intention that the amendment only would 

apply prospectively to refinance mortgages recorded after the effective date of the law. 

Id. 

21 In its ruling, the trial court described the lien created by the Declaration as a 

“super lien.” In context, we take that as part of the court’s ruling that the lien created by 

the Declaration had priority over later filed liens. A “super lien” is a term of art in real 

estate law. Ordinarily, a “super lien” is a lien in favor of a homeowners’ association or 

 (Continued...) 
46

 

(...continued)

condominium association that, by statute, is given “limited senior priority” over priorrecorded first mortgage liens. See Wells, Grahame K., The Use of Super-Liens to 

Promote Cooperation Between Condominium Associations and Lenders, 13 Ann. Rev. 

Banking L. 477, 478 (1994) (“Wells”). As explained by Wells with respect to 

condominium association assessments, the purpose of super lien statutes is to allow a 

condominium association to receive some portion of assessments owed to it when, upon 

foreclosure of a first lien on the unit, there would be no funds for the condominium 

association to receive:

Most state laws have given the condo association a lien on the 

condominium unit for delinquent condo fees. Yet, state laws generally 

subordinate the condo association’s lien to the first mortgagee’s lien. In 

most foreclosure sales, the lender is unable to generate sufficient funds to 

satisfy the first mortgage. Nevertheless, the foreclosure extinguishes junior 

liens, including the condo association’s lien. Thus, many condo 

associations never recover the delinquent condo fees.

The financial plight of many condo associations prompted calls to 

strengthen the associations’ power to collect delinquent assessments. Many 

states responded by enacting legislation, commonly referred to as a superlien statute, that elevates the condo association lien to a limited senior 

priority over the first mortgage. States employ the limited priority lien to 

encourage the first mortgagee to take a greater role in ensuring that unit 

owners pay their condo fees. In addition, the limited priority lien augments 

the condo association’s ability to recover delinquent condo fees from the 

proceeds of the first mortgagee’s foreclosure sale.

Wells, at 478 (footnotes omitted). 

 In fact, although they do not make express reference to “super liens,” both the 

Maryland Condominium Act and the Maryland Homeowners Association Act create 

super liens. Under the Condominium Act, when a unit owner fails to pay an assessment, 

the condominium association may enforce the obligation to pay by a lien obtained under 

the MCLA. RP § 11-110(d). As explained infra, such a lien is effective as of the date of 

recording of the statement of lien, which almost always will be after the first mortgage or 

deed of trust was recorded, and therefore does not have priority. However, under the 

super lien provision of the Condominium Act, in the event the mortgagee or deed of trust 

beneficiary brings suit to foreclose against the unit, a portion of the condominium 

association’s MCLA lien on the unit, equal to 4 months of unpaid regular assessments, 

not exceeding $1,200, shall have priority over the first mortgage or deed of trust. RP § 

 (Continued...) 
47

whether the Declaration in fact created a lien, as Saddlebrook maintains, or whether it 

merely created a right to obtain a lien under the MCLA, as SPS maintains. Before doing 

so, we briefly review the MCLA.

 A “contract” within the meaning of the MCLA is “a real covenant running with 

the land or a contract recorded among the land records of a county or Baltimore City.” 

RP § 14-201(b)(1). The MCLA separately addresses liens that are created by contracts 

and liens that are created by a breach of contract. RP section 14-202 concerns the former. 

It provides that “[a] lien on property may be created by a contract and enforced under [the 

MCLA] if: (1) The contract expressly provides for the creation of a lien; and (2) The 

contract expressly describes (i) The party entitled to establish and enforce the lien and (ii) 

The property against which the lien may be imposed.” RP § 14-202(a). Such a lien “may 

only secure the payment of: (1) Damages; (2) Costs of collection; (3) Late charges 

permitted by law; and (4) Attorney’s fees provided for in a contract or awarded by a court 

for breach of a contract.” RP § 14-202(b). “‘Damages’ means unpaid sums due under a 

contract, plus interest accruing on the unpaid sums due under a contract or as provided by 

law . . . .” RP § 14-201(c)(1). 

 RP section 14-203 addresses liens that may be created as the result of a breach of 

 

(...continued)

11-110(f). See also RP § 11B-117(c) (creating an identical super lien for a portion of 

unpaid HOA assessments). 
48

contract. A party seeking to create such a lien may do so if, within two years of the 

breach, he or she gives written notice, as specified, to the party against whose property 

the lien is to be imposed. RP § 14-203(a) & (b). A party to whom notice has been given 

may file a complaint to determine whether probable cause exists to establish a lien. Id. at 

(c). In that proceeding, the party seeking to establish the lien bears the burden of proof. 

Id. at (d). If the court finds that there is probable cause to establish a lien under the 

MCLA, it “shall order the lien imposed.” Id. at (g). (The court also shall order the lien 

imposed if no timely complaint is filed. Id. at (h)(2)(ii)). The party who sought the lien 

then may record a “statement of lien” in the land records of the county where the property 

is located. Id. at (h).22

 “A lien imposed under [the MCLA] has priority from the date the 

statement of lien is filed.” Id. at (h)(4). 

With certain exceptions pertaining to liens against units or lots governed by 

 

22 The MCLA includes a standard form Statement of Lien. As relevant, it reads 

STATEMENT OF LIEN 

This is to certify that the property described as ______________ is subject 

to a lien under [the MCLA], in the amount of $____. The property is 

owned by _____________. 

I hereby affirm under the penalty of perjury that notice was given under 

[RP] § 14-203(a) . . . , and that the information contained in the foregoing 

statement of lien is true and correct to the best of my knowledge, 

information, and belief. 

RP § 14-203(j)(1). 
49

condominium or homeowners associations, the MCLA provides at RP section 14-204(a) 

that “a lien may be enforced and foreclosed by the party who obtained the lien in the 

same manner, and subject to the same requirements, as the foreclosure of mortgages or 

deeds of trust on property in this State containing a power of sale or an assent to a 

decree.” Presently, an action to foreclose under the MCLA must be brought “within 12 

years following recordation of the statement of lien.” Id. at (c). At the pertinent time in 

this case, that period was three years. 23

 We return to the question whether the Declaration created a lien against the 

Property or created a right to obtain a lien against the Property. SPS asserts that the 

language of the Declaration did not create a lien. It argues that it created a right to obtain 

a lien, and in that case the MCLA provides the sole process by which the lien may be 

created and imposed. Saddlebrook and Utility assert that a lien may be created by 

contract and that the Declaration is a contract that by its plain language created a lien 

against the Property. 

 Whether the Declaration created a lien or created a right to obtain a lien is a 

question of contract interpretation, which we decide as a matter of law. United Servs. 

Auto Ass’n v. Riley, 393 Md. 55, 79 (2006). Maryland adheres to the objective law of 

contracts, under which the plain language of a contract controls its meaning. Cochran v. 

 

23 As previously noted, the amendment to the MCLA increasing the time limit 

from three years to 12 years was enacted effective October 1, 2008. 
50

Norkunas, 398 Md. 1, 16 (2007). Only when the language of a contract is ambiguous, so 

that its meaning cannot be ascertained from the words themselves, will extrinsic evidence 

be used to determine the contract’s meaning. Point’s Reach Condo. v. Point 

Homeowners Ass’n, Inc., 213 Md. App. 222, 255 (2013). Whether a contract is 

ambiguous is a question of law. Towson Univ. v. Conte, 384 Md. 68, 78 (2004). A 

contract is ambiguous when its language can be read to have two reasonable but 

inconsistent meanings. Calomiris v. Woods, 353 Md. 425, 435-36 (1999). 

 “‘The modern conception of a lien is that it is a right given by contract, statute or 

rule of law to have a debt or charge satisfied out of a particular property.’” Chaires, 350 

Md. at 731 (quoting 3 Am. Law of Property § 1320, at 537 n.4 (A.J. Casner ed. 1952)) 

(emphasis added). See also Montgomery Cnty. v. May Dept. Stores Co., 352 Md. 183, 

195 (1998) (a lien is a security interest in property; it is a charge upon a particular 

property for the payment of a particular debt or duty).24 Although there are no Maryland 

cases on point, cases from other jurisdictions have addressed whether the language in a 

recorded declaration of covenants that requires payments of assessments by lot owners in 

a community created a lien, or created a right to obtain a lien. The outcome in those 

cases turns on whether the language of the declaration creates a continuing lien against 

the property for the assessment charges or creates the right to a lien upon nonpayment of 

 

24 There are liens created by the common law as well, but they pertain to personal 

property. 
51

the assessment charges.

Bessemer v. Gersten, 381 So. 2d 1344 (Fla. 1980), was a lien priority dispute 

between the developer of a residential subdivision and the owners of one of the lots in the 

subdivision. Before completing construction of the subdivision, the developer recorded a 

declaration imposing upon each lot owner the obligation to pay a monthly assessment of 

$10.00 to finance a recreational facility the developer would build for the benefit of the 

subdivision residents. Under the terms of the declaration, the obligation to pay the 

monthly assessment would commence in the month following the developer’s recordation 

of a certificate of completion of the facility, and “each [lot] owner hereby agrees that 

[the developer], its successors or assigns, shall have a lien upon such owner’s lot for the 

aforesaid amount of $10.00 per month until such amount is paid.” Id. at 1346 (emphasis 

added). The declaration further provided that “such lien, where the same remains unpaid 

for a period of thirty days or more, may be foreclosed in equity in the same manner as is 

provided for the foreclosure of mortgages upon real property.” Id. at 1346. 

 Several months after the declaration was recorded in the land records, the lot 

owners purchased their lot. Five years later, they failed to pay their monthly assessment. 

The developer brought suit to foreclose on its lien under the declaration. The lot owners 

did not dispute that they owed the delinquent assessment, but argued that the lien did not 

come into existence until they defaulted on the assessment, and because that did not 

happen until after they purchased their lot, their homestead rights, which by law protected 
52

them and arose upon their purchase of the property, had priority over the developer’s lien. 

 The Supreme Court of Florida focused its decision on the plain language of the 

declaration. It held that by accepting the deed to their lot with actual or constructive 

notice of that language, the plaintiffs “manifested the intent to let the real property stand 

as security for the [assessment] obligation.” Id. at 1348. The declaration created a lien, 

by contract, when the lot owners took title to their property; the lien continued so long as 

their obligation to pay the monthly assessment existed; and the lien related back in time 

to the date of the recording of the declaration. “Thus, with regard to the time of 

attachment of the lien, this case is to be treated as if the [lot owners] had taken title 

subject to a valid pre-existing lien.” Id. The lot owners’ homestead rights arose when 

they purchased the property, but, because the lien attached before then, the lien took 

precedence. Accordingly, the developer was entitled to foreclose on its lien. See also 

Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632, 635-36 (Tex. 1987) 

(language of declaration recorded by developer of subdivision placing “charge” against 

each lot for assessments and stating that the charge would be secured by a continuing lien 

against the lot created a lien that related back to the date of recording of the declaration, 

taking precedence over lot owner’s homestead rights).

 A continuing lien created as security for payment of an ongoing charge against 

property, in the form of an assessment, differs from a lien that can be created upon 

“nonpayment” of such an assessment. In Holly Lake Ass’n v. Fed. Nat’l Mortg. Ass’n, 
53

660 So. 2d 266 (Fla. 1995), the Supreme Court of Florida distinguished its Bessemer

decision. In 1974, a homeowners association for a mobile home park recorded a 

declaration that obligated each unit owner to pay a monthly assessment. The declaration 

stated, “In the event the monthly [assessment] is not paid when due, [the homeowners 

association] shall have the right to a lien against [the mobile home site] . . . and shall have 

the right to enforce said lien.” Id. at 267. In 1983, a mortgagee recorded a mortgage 

granted to purchasers of a unit in the mobile home park. Eight years later, in 1991, the 

home site owners failed to pay both their monthly assessment and their mortgage. The 

homeowners association recorded a claim of lien in the land records. Soon thereafter, the 

mortgagee brought a foreclosure action. The homeowners association filed a 

counterclaim, asserting that its lien for unpaid monthly assessments related back to 1974, 

when the declaration was recorded, and therefore was superior to the mortgagee’s lien. 

The mortgagee replied that its 1983 lien was superior, because the homeowners 

association did not obtain its lien until 1991, and there was no language in the declaration 

stating that the lien would relate back in time to the date the declaration was recorded.

 The Supreme Court of Florida agreed with the mortgagee. It read the operative 

language of the declaration as “merely grant[ing] the [homeowners association] the right 

to file a lien in the event of nonpayment.” Id. at 268. By contrast, the language in the 

declaration in Bessemer “put all parties on notice that an ongoing, automatic lien had 

been created at the time that the property was purchased, and that this lien would 
54

continue each month until the owner paid the monthly assessment fee.” Id. The court 

made clear, moreover, that for a declaration “to have priority over an intervening 

recorded mortgage, the declaration must contain specific language indicating that the lien 

relates back to the date of the filing of the declaration or that it otherwise takes priority 

over intervening mortgages.” Id. at 269. See also Bd. of Dirs. of Olde Salem 

Homeowners’ Ass’n v. Sec’y of Veterans Affairs, 589 N.E.2d 761 (Ill. App. Ct. 1992) 

(holding that when declaration imposed assessments and gave the homeowners 

association a continuing lien against lots for unpaid assessments, a lien did not exist when 

the declaration was recorded and only arose upon nonpayment); St. Paul Fed. Bank for 

Sav. v. Wesby, 501 N.E.2d 707, 711, 713 (Ill. App. Ct. 1986) (holding that language of 

declaration imposing assessments and providing that the amount of unpaid assessments 

constitutes a lien on the property “when due” is “merely a notice that a right to perfect a 

lien existed”) (emphasis added).

 We return to the language of the Declaration in this case. In Paragraph 2, 

“Establishment of Lien and Personal Obligation,” each lot owner agrees to pay the Water 

and Sewer Charges assessed against his lot for as long as he is the owner in fee simple 

and “grants to [Utility] a lien to secure payment of the aforesaid Water and Sewer 

Charges upon the Lot against which the aforesaid Water and Sewer Charges are 

assessed.” This language is not ambiguous. As in Bessemer, it creates a lien against each 

lot that secures payment of the Water and Sewer Charges for that lot, until they are fully 
55

paid. It does not create a right to obtain a lien that arises when Water and Sewer Charges 

are unpaid. Indeed, default is required only for Utility to exercise the power of sale or 

assent to decree of sale that each lot owner also grants in that paragraph. 

 We agree with Saddlebrook and Utility that the Declaration created a lien against 

the Property and that it is a lien instrument. Chapter 200 of Title 14 (“Sales of Property”) 

of the Rules defines a “[l]ien” to mean “a statutory lien or a lien upon property created or 

authorized to be created by a lien instrument.” Md. Rule 14-202(h). A “[l]ien instrument 

means any instrument creating or authorizing the creation of a lien on property, 

including: . . . (4) a contract creating a lien pursuant to [the MCLA.]” Md. Rule 14-

202(i) (emphasis added). 25 Accordingly, Saddlebrook and Utility did not have to invoke 

 

25 Saddlebrook and Utility also argue that the Declaration created a lien because it 

is modeled on provisions of the Anne Arundel County Code (“AACC”) and the 

Baltimore County Code (“BCC”) that describe developers of residential property that 

construct water and sewer facilities and impose water and sewer assessments to recoup 

the cost of those improvements as “lienholders.” We disagree with this argument. 

 The AACC permits Anne Arundel County to enter into agreements with 

developers by which the developers may “recoup from a subsequent user, directly or 

through the County, the actual cost of any improvements to the County’s water or 

wastewater system constructed or paid for by the developer that are over and above those 

improvements otherwise required by [the AACC].” AACC § 13-5-110(a). If a developer 

enters into such an agreement and charges downstream residential owners “a fee or 

assessment that purports to cover or defray all or part of the cost of installing or 

maintaining all or any part of the public water or wastewater facilities,” the developer 

must provide notice of the fee in the contract of sale, bill the property owner annually, 

permit prepayment without penalty and at a discount, and notify the property owner if the 

right to collect the fee is assigned. AACC § 13-5-111(a). Failure to comply with the 

notice provisions renders any obligation to pay the assessment void and unenforceable. 

AACC § 13-5-111(b). A form “Notice” to a purchaser states: 

 (Continued...) 
56

the MCLA to create a lien against the Property when Mr. Bradley failed to pay the 

annual Water and Sewer Charges. The lien already was in existence. 

 As noted above, SPS maintains that notwithstanding the language of the 

Declaration, the MCLA is the only permitted means for imposing a lien on real property 

by means of a contract. It relies upon Chesapeake Ranch Club v. Garczynski, 71 Md. 

App. 224 (1987), and Bright, 104 Md. App. at 394. Neither case supports SPS’s 

argument. 

In Chesapeake Ranch Club, the developer of a residential community recorded a 

declaration that required lot owners to pay a yearly assessment and fees. When the 

owners of a lot defaulted on those payments, the developer brought suit to impose a lien 

 

(...continued)

This property is subject to a fee or assessment which purports to cover or 

defray the cost of installing or maintaining all or part of the public water or 

wastewater facilities constructed by the developer of the subdivision. This

fee or assessment is (amount) payable annually in (month) to (name and 

address) (hereinafter called ‘lienholder’) until (date). There may be a right 

of prepayment or discount for early payment which may be ascertained by 

contacting the lienholder. This fee or assessment is a contractual 

obligation between the lienholder and each owner of this property and is 

not in any way a fee or assessment by Anne Arundel County. 

AACC § 13-5-111(c) (emphasis added). Failure to include in the sales contract a notice 

provision that is “substantially” the same as the form notice is ground for the purchaser to 

rescind prior to settlement without penalty and, after settlement, subjects the seller to 

liability in the amount of “any open lien or assessment.” AACC § 13-5-111(d). The 

BCC provisions are modeled after the AACC. See BCC §§ 32-4-310 & 32-4-311. 

 There is no language in these local ordinances creating a lien, or even creating the 

right to obtain a lien.
57

under the MCLA. The trial court denied relief on the ground that the MCLA only 

applied to condominium units. This Court reversed. We held that the definition of 

“contract” in the MCLA is not restricted to declarations or bylaws recorded under the 

Maryland Condominium Act, and therefore the MCLA “applies to property other than 

and in addition to condominium units.” Id. at 225. The case did not concern a lien 

created by a declaration and there is no reference to there being any lien language in the 

declaration at all. 

In Bright, a homeowners association brought suit against several lot owners who 

failed to pay an annual assessment required by a declaration of covenants included in key 

deeds, seeking to impose liens against their properties under the MCLA. The declaration 

provided that the “assessments ‘shall be and remain a first lien upon each lot’ and ‘[i]f the 

assessment is not paid . . . the [homeowners association] may bring an action at law . . . to 

foreclose the lien against the property. . . .’” Id. at 436 (quoting declarations) (alteration 

in Bright). The trial court imposed liens against the lots for which assessments had not 

been paid, under the MCLA, and the lot owners appealed. Their primary argument with 

respect to the liens imposed was that they had no underlying obligation to pay the 

assessments, and therefore the MCLA did not apply. Quoting Chesapeake Ranch Club, 

71 Md. App. at 229, we held that the MCLA was “‘applicable to the lien attempted to be 

imposed by the [homeowners association] on the land of the [lot owners].’” Id. at 437. 

The homeowners association did not argue that the declaration of covenants itself created 
58

a lien, and, as noted, it invoked the MCLA.

 SPS contends, alternatively, that even if the Declaration created a lien, the lien 

only could be enforced against the Property pursuant to the MCLA. In effect, SPS takes 

the position that to the extent a lien against real property can be created by a real 

covenant running with the land or a contract recorded among the land records, enactment 

of the MCLA preempted any means to enforce the lien other than as provided in the 

MCLA. Saddlebrook and Utility maintain that the MCLA had no such effect; its 

enforcement process was one remedy available to them, but not the sole remedy. They 

assert that they were free to seek relief in any manner allowed by the Declaration, which 

included exercising the power of sale to foreclose on the lien.

 This contention by SPS is inconsistent with the plain language of the MCLA and 

Title 14, Chapter 200 of the Rules, governing the foreclosure of lien instruments. As 

noted above, the MCLA addresses two separate scenarios: 1) the creation of a lien by 

contract, i.e., by a real covenant running with the land or a contract recorded in the land 

records (RP section 14-202); and 2) the creation of a lien as a result of a breach of 

contract (RP section 14-203). The former section describes the circumstances that must 

exist for a lien to be created by a contract, and what the lien may secure. It does not set 

forth any procedure for establishing the lien (as it is an already established lien) or for 

enforcing it. 

 The latter section contains detailed procedures that must be followed to create a 
59

lien as a result of a breach of contract, including written notice to the party against whose 

property the lien is to be imposed and the opportunity for that party to file a complaint in 

opposition to the creation of a lien and for a hearing. It provides that, if the lien is 

contested, the party seeking it bears the burden to prove facts showing probable cause to 

impose the lien; the court makes the probable cause determination; and if the court finds 

probable cause, it shall issue an order to impose the lien. In that circumstance, the 

section directs the party seeking the lien to file a statement of lien in the land records, 

within a set period of time; recites the form of the statement of lien; and provides a means 

to release the lien.

 Pursuant to section 14-204, the lien “may be enforced and foreclosed by the party 

who obtained the lien in the same manner, and subject to the same requirements, as the 

foreclosure of mortgages or deed of trust on property in this State containing a power of 

sale or an assent to a decree.” RP § 14-204(a). It is clear that this enforcement provision 

applies only to liens obtained under section 14-203, as a result of a breach of contract, 

because the time limit to bring an action to foreclose as permitted by subsection (a) of 

section 14-204 is “within 12 years following the recordation of the statement of lien.” RP 

§ 14-204(c) (emphasis added).26

 There is no statement of lien when the lien is created by 

a contract, as opposed to by a breach of contract. There is no express statutory language 

 

26 As noted, that time limit used to be 3 years.
60

requiring that a lien created by contract only may be enforced under the MCLA, and the 

language above does not support that notion, and indeed undermines it. 

 As discussed above, the foreclosure of lien instrument rules include within the 

definition of “lien instrument” “a contract creating a lien pursuant to [the MCLA.]” Md. 

Rule 14-202(i) (emphasis added). The rules permit an action to foreclose such a lien to 

be filed if the lien instrument has been recorded and there has been a default that lawfully 

allows a sale. Md. Rule 14-205(a). The foreclosure action may be instituted by “any 

individual authorized to exercise a power of sale” or by a secured party under an assent to 

a decree. Md. Rule 14-204(a)(1) and (2). Thus, under these rules, a holder of a lien 

against real property created by contract, as described in section 14-202 of the MCLA, 

and containing a power of sale or assent to a decree, may foreclose on the lien in the 

event of a default, in accordance with procedures governing the foreclosure of lien 

instruments as set forth in Title 14, Chapter 200 of the Rules.27 If a lien against real 

property created by a contract only could be enforced by recording a statement of lien 

and invoking the enforcement procedures in section 14-203 of the MCLA, the provisions 

of the foreclosure of lien instrument rules that make a lien created by contract under the 

MCLA a lien instrument and allow for the lien’s foreclosure by exercise of a power of 

 

27 Rule 14-208 also allows for proceedings to foreclose a lien in accordance with 

the rules for civil cases in the event there is no power or sale or assent to decree in the 

lien instrument.
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sale or assent to a decree in the lien under those rules would have no purpose. We will 

not interpret a statute or rule in such a way as to render it of no effect. See Fisher v. E. 

Corr. Inst., 425 Md. 699, 707 (2012) (in interpreting a statute, a court should be “guided 

by the presumption that the Legislature intends its enactments to operate together as a 

consistent and harmonious body of law, such that no part of the statute is rendered 

meaningless or nugatory”) (citation omitted).28

 The Declaration in this case is a lien created by a contract, as defined by the 

MCLA. It also is a lien instrument containing a power of sale and assent to a decree that, 

upon nonpayment of the Water and Sewer Charges by a lot owner, can be foreclosed 

under the rules governing foreclosure of lien instruments. Saddlebrook and Utility were 

not required to obtain a lien under the MCLA, to file a statement of lien, or to enforce 

 

28 Virtually every Maryland appellate opinion addressing the MCLA concerns 

liens obtained as a result of a breach of contract, under RP section 14-203, to which the 

statement of lien procedure and the enforcement procedure under RP section 14-203 

applies. This is not surprising, because the cases largely concern nonpayment of 

assessments owed by unit owners or homeowners to condominium or homeowners 

associations. Those entities are creatures of statute, and the statutes controlling them 

state that payment of assessments, with interest, late charges, costs of collection, if any, 

and reasonable attorneys’ fees may be enforced in accordance with the MCLA. RP § 11-

110(d) (Maryland Condominium Act); RP § 11B-117(b) (Maryland Homeowners 

Association Act). The MCLA, 1985 Md. Laws, Ch. 736, § 1, was enacted in part for the 

purpose of repealing provisions of the Condominium Act that, upon nonpayment of an 

assessment by a unit owner, allowed an association to establish a lien against a unit 

“without prior notice to the unit owner and without prior hearing or judicial scrutiny.” 

Golden Sands Club Condo., Inc. v. Waller, 313 Md. 484, 491 n.5 (1988). In an 

unreported opinion, this Court had held that those provisions violated due process of law. 

Id. (discussing Surfside 84 Condo. Council of Unit Owners v. Mullen, No. 495, Sept. 

Term 1984 (filed Jan. 28, 1985), cert. denied, 306 Md. 370 (1986)). 
62

their lien pursuant to the MCLA. Consequently, the priority of their lien was not 

determined by the recording date of a statement of lien. Instead, it was determined by the 

recording date of the lien itself, i.e., the Declaration. 

 When Long Beach extended its refinance loan to Ms. Mitchell, the Declaration, 

containing clear language establishing a lien against the Property for the Water and 

Sewer Charges, was recorded in the land records. In Maryland, the recording of 

restrictions on lots in a development gives constructive notice of the restrictions to the 

world at large. See Turner v. Brocato, 206 Md. 336, 356–57 (1955) (recording of deeds 

containing restrictions on lots gave constructive notice of those restrictions). See also

Steuart Transp. Co. v. Ashe, 269 Md. 74, 93–94 (1973); Condry v. Laurie, 184 Md. 317, 

320 (1945); Bourke v. Krick, 304 F. 2d 501, 503 (4th Cir. 1962). 

 To be sure, had Long Beach performed a complete title search and not just a twoparty title search, it would have had actual notice of the Declaration and therefore of the 

lien. In any event, it had constructive notice of the lien. As the Declaration was recorded 

before the DOT was recorded, and Long Beach (and its assigns) had constructive notice 

of the Declaration, the lien in the Declaration took priority over the DOT. 

JUDGMENT OF THE CIRCUIT COURT 

FOR PRINCE GEORGE’S COUNTY 

AFFIRMED. COSTS TO BE PAID BY 

THE APPELLANT.