Select Portfolio Servicing, Inc. v. Saddlebrook West Utility Co., LLC

At issue was the use of a lien on real property as part of a deferred financing arrangement for the construction of water and sewer infrastructure to serve a new home development. To carry out a deferred financing strategy, Developer used an instrument called a declaration, which provided for payments of an annual assessment by future homeowners to Respondent. The declaration purportedly granted a lien by future homeowners to Respondent to secure the payment of the annual assessment and gave priority to that lien at a date before the development was constructed or any homeowner had granted such a lien. Petitioner, the holder of a deed of trust that arose out of the financing of one of the homes in the development, brought this action to clarify the priority of its interest in that property in relation to the lien asserted by Respondent for delinquent assessments. The Supreme Court held (1) the declaration recorded by Respondent did not itself create a lien on the property because Petitioner must follow the procedures set forth in the Maryland Contract Lien Act to establish a lien under the declaration with respect to delinquent assessments; and (2) the priority of that lien is determined by the date of its recording in the land records. View "Select Portfolio Servicing, Inc. v. Saddlebrook West Utility Co., LLC" on Justia Law