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Important Changes to the Enforceability of Maryland Tax Liens

Posted By USFN, Monday, August 12, 2019

by Angie Nasuta, Esq.
Alba Law Group, P.A.
USFN Member (DE, MD)


On April 30, 2019, Maryland’s Governor signed into law Senate Bill 484 establishing automatic termination time frames for certain state liens.  This legislation, which took effect July 1, 2019, most notably adds provisions to Md. Tax - Prop. Art. § 14–804 for the automatic termination of state tax liens 20 years after the date the lien attaches to the property.  

The new law resolves an issue that has plagued Maryland title reviewers for three decades. While virtually all other lien types have a set expiration period - generally 12 years from the date of entry for judgment liens - the Court of Special Appeals, Maryland’s intermediate appellate court, held there was no such limitations period on the enforcement of liens entered in favor of the State of Maryland.  Rossville Vending Machine Corp v. Comptroller of the Treasury, 114 Md. App. 346 (1997).

This holding launched a significant issue with the marketability of title for some properties, particularly for titles with open state liens filed against prior property owners who had no connection with a property for many years or were even deceased.  Title agents were also faced with a struggle of trying to obtain payoff information and/or lien releases from the state for older liens where the related records would be more difficult to locate.

For those working in the mortgage default arena, the rising trend of mortgage investors and servicers refusing to accept letters of indemnity intensified the problem of resolving unexpired tax liens.

For the last several sessions, title industry representatives have lobbied the Maryland General Assembly in a concerted effort for the passage of legislation to impose a limitations period for state tax liens.  This year, they finally succeeded. 

Although the new 20-year termination period exceeds that of other standard judgment liens, and there are other state lien types not affected, this seminal piece of legislation is still a huge step in the right direction. It will provide some much-needed relief from the problems that the title and default industries in Maryland have been facing in recent years.


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