WES MOORE, Governor Ch. 184
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Chapter 184
(House Bill 118)
AN ACT concerning
Ground Leases – Notices and Billing – Forms and Requirements
FOR the purpose of prohibiting a leasehold tenant of an unregistered ground lease from
being required to hold more than a certain amount of ground rent in escrow;
requiring a ground lease holder to mail certain notices and bills to a leasehold tenant
in a certain manner under certain circumstances and prohibiting the ground lease
holder from requiring the leasehold tenant to reimburse the ground lease holder for
the mailing expenses; requiring the State Department of Assessments and Taxation
to develop and make available on its website certain form notices and bills; requiring
a ground lease transferee to send notice of a ground lease transfer to the State
Department of Assessments and Taxation within a certain period of time; and
generally relating to ground leases.
BY renumbering
Article – Real Property
Section 8–801(b) through (f)
to be Section 8–801(c) through (g), respectively
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with amendments,
Article – Real Property
Section 8–707, 8–805(a) and (d)(1)(iii) and (v) and (3)(ii), 8–807(a), (c), and (d), 8–809,
and 8–810
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, without amendments,
Article – Real Property
Section 8–801(a)
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
BY adding to
Article – Real Property
Section 8–801(b) and 8–801.1
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
Ch. 184 2023 LAWS OF MARYLAND
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SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That Section(s) 8–801(b) through (f) of Article – Real Property of the Annotated Code of
Maryland be renumbered to be Section(s) 8–801(c) through (g), respectively.
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
as follows:
Article – Real Property
8–707.
If a ground lease is not registered in accordance with this [subtitle, the] SUBTITLE:
(1) THE ground lease holder may not:
[(1)] (I) Collect any ground rent payments due under the ground lease;
[(2)] (II) Bring a civil action against the leasehold tenant to enforce any
rights the ground lease holder may have under the ground lease; or
[(3)] (III) Bring an action against the leasehold tenant under Subtitle 8 of
this title; AND
(2) THE LEASEHOLD TENANT OF THE UNREGISTERED GROUND LEASE
MAY NOT BE REQUIRED TO HOLD MORE THAN 3 YEARS OF GROUND RENT IN ESCROW
FOR THE UNREGISTERED GROUND LEASE .
8–801.
(a) In this subtitle the following words have the meanings indicated.
(B) “DEPARTMENT ” MEANS THE STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION.
8–801.1.
(A) THE GENERAL ASSEMBLY DECLARES THA T IT IS IN THE PUBLI C
INTEREST FOR GROUND RENTS TO BE REDEEMED .
(B) IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT THE DEPARTMENT
USE ITS GROUND RENT REDEMPTION PROGRAM T O ASSIST IN THE REDE MPTION OF
GROUND RENTS .
8–805.
WES MOORE, Governor Ch. 184
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(a) (1) In this section the following words have the meanings indicated.
(2) [“Department” means the State Department of Assessments and
Taxation.
(3)] “Irredeemable ground rent” means a ground rent created under a
ground lease executed before April 9, 1884, that does not contain a provision allowing the
leasehold tenant to redeem the ground rent.
[(4)] (3) “Redeemable ground rent” means a ground rent that may be
redeemed in accordance with this section or redeemed or extinguished in accordance with
§ 8–804(f) of this subtitle.
(d) (1) To be effective and to be entitled to be recorded, the notice shall be
executed by the ground lease holder, acknowledged before a notary public, and contain
substantially the following information:
(iii) The name of every leasehold tenant as of the time the notice is
filed according to the land records or the records of the [State] Department [of Assessments
and Taxation];
(v) The recording reference of every leasehold tenant’s leasehold
deed, as of the time the notice is filed, according to the land records or the records of the
[State] Department [of Assessments and Taxation];
(3) The notice shall be indexed as “Notice of Intention to Preserve
Irredeemability”:
(ii) In the grantor indices of deeds under the name of every leasehold
tenant as of the time the notice is filed according to the land records or the records of the
[State] Department [of Assessments and Taxation]; and
8–807.
(a) For property subject to a ground lease in effect on or after July 1, 2007, a
ground lease holder may bring an action for possession for nonpayment of ground rent only:
(1) If the ground lease holder has the lawful right to claim possession for
nonpayment of ground rent;
(2) If the ground lease is registered with the [State] Department [of
Assessments and Taxation] under Subtitle 7 of this title;
(3) If the payment of ground rent is at least 6 months in arrears; and
(4) As provided under this section. Ch. 184 2023 LAWS OF MARYLAND
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(c) (1) (I) No less than 60 days before filing an action for possession, the
ground lease holder shall send a notice, in the form required under paragraph (2) of this
subsection, to the leasehold tenant’s last known address AND TO THE PREMISES ADDRESS
as shown in the records of the [State] Department [of Assessments and Taxation, or other
place of business or residence if known,] by[:
(i) First–class mail;] FIRST–CLASS MAIL and
[(ii) Certified] CERTIFIED mail, return receipt requested.
(II) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS
AND THE PREMISES ADD RESS LISTED IN THE R ECORDS OF THE DEPARTMENT ARE
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY .
(III) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED IN
PROVIDING NOTICE REQUIRED UNDE R THIS SUBSECTION .
(2) The DEPARTMENT SHALL DEVE LOP AND MAKE AVAILAB LE ON ITS
WEBSITE A FORM NOTICE FOR US E BY A GROUND LEASE HOLDER THE FORM A
GROUND LEASE HOLDER MUST USE TO PROVIDE TO A LEAS EHOLD TENANT THE
notice required under paragraph (1) of this subsection [shall be in substantially the same
form as the notice contained on the Web site of the State Department of Assessments and
Taxation].
(3) If authorized under the ground lease, a ground lease holder may be
reimbursed for reasonable late fees, interest, collection costs, and expenses not exceeding
$100, provided the outstanding amount due is paid after the notice sent under paragraph
(1) of this subsection and before a notice is sent under subsection (d) of this section.
(d) (1) (I) After notice has been sent under subsection (c) of this section and
no [less] FEWER than 30 days before filing an action for possession, the ground lease holder
shall send a notice, in the form required under paragraph (2) of this subsection, to the
leasehold tenant’s last known address AND TO THE PREMISES ADDRESS as shown in the
records of the [State] Department [of Assessments and Taxation, or other place of business
or residence if known,] by[:
(i) First–class mail;] FIRST–CLASS MAIL and
[(ii) Certified] CERTIFIED mail, return receipt requested.
WES MOORE, Governor Ch. 184
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(II) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS
AND THE PREMISES ADD RESS LISTED IN THE R ECORDS OF THE DEPARTMENT ARE
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY .
(III) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED IN
PROVIDING NOTICE REQ UIRED UNDER THIS SUB SECTION.
(2) (I) The DEPARTMEN T SHALL DEVELOP AND MAKE AVAILABLE
ON ITS WEBSITE A FORM NOTICE FOR US E BY A GROUND LEASE HOLDER THE FORM
A GROUND LEASE HOLDE R MUST USE TO PROVIDE TO A LEAS EHOLD TENANT THE
notice required under paragraph (1) of this subsection.
(II) THE FORM shall be in 14 point bold font and [include] REQUIRE
THE FOLLOWING :
[(i)] 1. An itemized bill for the payment due;
[(ii)] 2. The amount necessary to cure the default, including late
fees, interest, collection costs, and expenses authorized under paragraph (3) of this
subsection;
[(iii)] 3. The name and address of the person to whom to send the
payment due;
[(iv)] 4. The name and contact information of the person to contact
for questions about the notice; and
[(v)] 5. A statement that unless the default is cured in 30 days:
[1.] A. The ground lease holder intends to file an action for
possession; and
[2.] B. The leasehold tenant may be liable for reimbursing
the ground lease holder for expenses and costs incurred in connection with the collection of
past due ground rent and the filing of the action for possession.
(3) If authorized under the ground lease, a ground lease holder may be
reimbursed for reasonable late fees, interest, collection costs, and expenses not exceeding
$650, including:
(i) Title abstract and examination fees;
Ch. 184 2023 LAWS OF MARYLAND
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(ii) Judgment report costs;
(iii) Photocopying and postage fees; and
(iv) Attorney’s fees.
8–809.
(a) (1) A ground lease holder may not collect a yearly or half –yearly
installment payment of a ground rent due under the ground lease unless:
[(1)] (I) The ground lease is registered with the [State] Department [of
Assessments and Taxation] under Subtitle 7 of this title; and
[(2)] (II) At least 60 days before the payment is due, the ground lease
holder mails a bill, IN THE FORM REQUIRED UNDER SUBSECTION (B) OF THIS
SECTION, to the last known address of the leasehold tenant and to the PREMISES address
of the property subject to the ground lease LISTED IN THE RECORD S OF THE
DEPARTMENT .
(2) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND
THE PREMISES ADDRESS LISTED IN THE RECORD S OF THE DEPARTMENT ARE
IDENTICAL, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE BILL TO
THE ADDRESS BY FIRST –CLASS MAIL AND ONE C OPY OF THE BILL TO T HE ADDRESS
BY CERTIFIED MAIL , RETURN RECEIPT REQUE STED.
(3) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND
PREMISES ADDRESS LIS TED IN THE RECORDS O F THE DEPARTMENT ARE
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE BILL BY
FIRST–CLASS MAIL AND ONE COPY OF THE BILL BY CERTIFIE D MAIL, RETURN
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY .
(4) A GROUND LEASE HOLDER MAY NOT REQUIRE THE LEASEHOLD
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED TO
PROVIDE A BILL UNDER THIS SUBSECTION.
(b) (1) THE DEPARTMENT SHALL DEVE LOP AND MAKE AVAILAB LE ON ITS
WEBSITE A FORM BILL FOR USE BY A GROUND LEASE HO LDER THE FORM A GROUND
LEASE HOLDER MUST US E TO PROVIDE TO A LE ASEHOLD TENANT THE B ILL
REQUIRED UNDER SUBSE CTION (A)(1)(II) OF THIS SECTION.
(2) The FORM bill MADE AVAILABLE ON TH E DEPARTMENT ’S WEBSITE
shall include a notice in boldface type, at least as large as 14 point, in substantially the
following form: WES MOORE, Governor Ch. 184
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“NOTICE REQUIRED BY MARYLAND LAW
REGARDING YOUR GROUND RENT
This property (address) is subject to a ground lease. The annual payment on the ground
lease (“ground rent”) is $(dollar amount), payable in yearly or half–yearly installments on
(date or dates).
The next ground rent payment is due (day, month, year) in the amount of $(dollar amount).
The payment of the ground rent should be sent to:
(name of ground lease holder)
(address)
(phone number)
NOTE REGARDING YOUR RIGHTS AND RESPONSIBILITIES UNDER MARYLAND
LAW:
The ground lease holder is required to register the ground lease with the State Department
of Assessments and Taxation and is prohibited from collecting ground rent payments unless
the ground lease is registered. If the ground lease is registered, as the owner of this
property, you are obligated to pay the ground rent to the ground lease holder. To determine
whether the ground lease is registered, you may check the [Web site] WEBSITE of the State
Department of Assessments and Taxation. It is also your responsibility to notify the ground
lease holder if you change your address or transfer ownership of the property.
If you fail to pay the ground rent on time, you are still responsible for paying the ground
rent. In addition, if the ground lease holder files an action in court to collect the past due
ground rent, you may be required to pay the ground lease holder for fees and costs
associated with the collection of the past due ground rent. In addition, the ground lease
holder may also file an action in court to take possession of the property, which may result
in your being responsible for additional fees and costs and ultimately in your loss of the
property. Please note that under Maryland law, a ground lease holder may demand not
more than 3 years of past due ground rent, and there are limits on how much a ground
lease holder may be reimbursed for fees and costs. If you fail to pay the ground rent on
time, you should contact a lawyer for advice.
As the owner of this property, you are entitled to redeem, or purchase, the ground lease
from the ground lease holder and obtain absolute ownership of the property. Unless you
and the ground lease holder agree to a lesser amount, the amount to redeem your ground
lease is _______. If you wish to redeem the ground lease, contact the ground lease holder. If
the identity of the ground lease holder is unknown, the State Department of Assessments
and Taxation provides a process to redeem the ground lease that may result in your
obtaining absolute ownership of the property. If you would like to obtain absolute
ownership of this property, you should contact a lawyer for advice.”.
Ch. 184 2023 LAWS OF MARYLAND
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8–810.
(a) Within 30 days after any transfer of a ground lease, the transferee shall notify
the leasehold tenant AND THE DEPARTMENT of the transfer.
(b) (1) The notification shall include the name and address of the new ground
lease holder and the date of the transfer.
(2) If the property is subject to a redeemable ground rent, the notification
shall also include the following notice:
“As the owner of the property subject to this ground lease, you are entitled to redeem,
or purchase, the ground lease from the ground lease holder and obtain absolute ownership
of the property. The redemption amount is fixed by law but may also be negotiated with
the ground lease holder for a different amount. For information on redeeming the ground
lease, contact the ground lease holder.”
(c) (1) A ground lease holder shall send notice under this section to the last
known address of the leasehold tenant AND THE PREMISES ADDRESS LIS TED IN THE
RECORDS OF THE DEPARTMENT BY FIRST –CLASS MAIL AND CERTI FIED MAIL,
RETURN RECEIPT REQUE STED.
(2) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND
PREMISES ADDRESS LIS TED IN THE RECORDS O F THE DEPARTMENT ARE
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY .
(3) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD
TENANT TO REIMBU RSE THE GROUND LEASE HOLDER FOR COSTS INC URRED IN
PROVIDING NOTICE REQ UIRED UNDER THIS SEC TION.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023.
Approved by the Governor, April 24, 2023.