EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0092*
HOUSE BILL 92
N1 3lr0509
(PRE–FILED) CF 3lr1199
By: Delegate Holmes
Requested: October 5, 2022
Introduced and read first time: January 11, 2023
Assigned to: Environment and Transportation
A BILL ENTITLED
AN ACT concerning 1
Ground Leases – Collection of Rent, Interest, Fees, and Other Expenses – 2
Registration Requirements 3
FOR the purpose of establishing that ground leases and amendments that are not posted 4
on the State Department of Assessments and Taxation’s website are not considered 5
registered; prohibiting a ground lease holder from collecting or attempting to collect 6
rent, late fees, interest, collection costs, and other expenses related to a ground lease 7
unless the ground lease is registered with the Department; establishing a process 8
within the Department to render decisions on the legality of efforts by a ground lease 9
holder to collect rent, late fees, interest, collection costs, and other expenses; 10
authorizing a ground lease holder or leasehold tenant to file suit in circuit court for 11
a certain judicial determination following a decision by the Department; requiring 12
the Department to develop and make available certain forms and post a certain 13
notice on its website; and generally relating to ground leases. 14
BY repealing and reenacting, with amendments, 15
Article – Real Property 16
Section 8–703 and 8–707 17
Annotated Code of Maryland 18
(2015 Replacement Volume and 2022 Supplement) 19
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
That the Laws of Maryland read as follows: 21
Article – Real Property 22
8–703. 23
(a) (1) The Department shall maintain an online registry of all properties that 24
are subject to ground leases. 25 2 HOUSE BILL 92
(2) The online registry shall: 1
(i) Identify properties for which a renewal notice to preserve the 2
irredeemability of an irredeemable ground lease has been filed; and 3
(ii) Include a clear notation of the expiration date for each renewal 4
notice. 5
(b) A GROUND LEASE OR AN A MENDMENT IS NOT REGISTERED UNTIL THE 6
GROUND LEASE OR AMEN DMENT IS POSTED ON T HE ONLINE REGISTRY . 7
(C) The Department is not responsible for the completeness or accuracy of the 8
contents of the online registry. 9
8–707. 10
(A) If a ground lease is not registered in accordance with this subtitle, the ground 11
lease holder may not: 12
(1) Collect OR ATTEMPT TO COLLEC T any ground rent payments [due 13
under], LATE FEES, INTEREST, COLLECTION COST S, OR OTHER EXPENSE S RELATED 14
TO the ground lease; 15
(2) Bring a civil action against the leasehold tenant to enforce any rights 16
the ground lease holder may have under the ground lease; or 17
(3) Bring an action against the leasehold tenant under Subtitle 8 of this 18
title. 19
(B) (1) A LEASEHOLD TENANT WHO BELIEVES THAT A GROU ND LEASE 20
HOLDER HAS COLLECTED OR ATTEMPT ED TO COLLECT GROUND RENT PAYMENT , 21
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE 22
GROUND LEASE IN VIOLATION OF SUBS ECTION (A)(1) OF THIS SECTION MAY SUBMIT 23
TO THE DEPARTMENT AN AFFIDAVIT STATING THE FACTUAL BASIS FOR THE 24
LEASEHOLD TENANT ’S BELIEF AND ANY DOCUM ENTS IN SUPPORT OF THE 25
AFFIDAVIT. 26
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPPOR TING 27
DOCUMENTS SUBMITTED UND ER PARAGRAPH (1) OF THIS SUBSECTION , THE 28
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE 29
SUBJECT OF THE SUBMISSION STATING THAT: 30
HOUSE BILL 92 3
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION 1
ALLEGING THAT THE GROUND LEASE HOLDER HAS VIOLATED SUBSECT ION (A)(1) OF 2
THIS SECTION; AND 3
(II) THE RELEVANT GROUND LEASE REGISTR ATION OR 4
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER 5
FOR THE PROPERTY IN QUESTION MAY BE VOIDED IN THE DEPARTMENT ’S RECORDS 6
UNLESS, WITHIN 45 DAYS AFTER THE NOTICE, THE GROUND LEASE HOL DER SUBMITS 7
TO THE DEPARTMENT A COUNTER–AFFIDAVIT AND ANY DOCUMENTS IN SUPPORT OF 8
THE COUNTER –AFFIDAVIT THAT SETS FORTH THE GROUND LEA SE HOLDER’S BELIEF 9
THAT ANY COLLECTION OR ATTEMPTED COLLECT ION DESCRIBED IN THE AFFIDAVIT 10
DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION AND THE FACT UAL BASIS 11
FOR THAT BELIEF . 12
(3) NOTICE SENT TO THE GROUND L EASE HOLDER UNDER 13
PARAGRAPH (2) OF THIS SUBSECTION S HALL: 14
(I) BE SENT BY CERTIFIED MA IL, RETURN RECEIPT 15
REQUESTED , AND BY FIRST –CLASS MAIL TO THE AD DRESS PROVIDED IN TH E 16
GROUND LEASE HOLDER ’S GROUND LEASE REGIS TRATION OR AMENDMENT , OR TO 17
ANY OTHER ADDRESS US ED BY THE GROUND LEA SE HOLDER KNOWN TO T HE 18
DEPARTMENT ; AND 19
(II) INCLUDE A COPY OF THE AFFIDAVIT AND ANY SUPPORTING 20
DOCUMENTS SUBMITTED BY THE LEASEHOLD TENANT TO THE DEPARTMENT . 21
(C) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 22
COUNTER–AFFIDAVITS, AND ANY SUPPORTING D OCUMENTS, THE DEPARTMENT 23
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER VIOLATED SUBSECTION 24
(A)(1) OF THIS SECTION, THE DEPARTMENT MAY MAKE A FINAL DECISION. 25
(2) FOLLOWING A DECISION MADE UNDER PARAGRAPH (1) OF THIS 26
SUBSECTION, THE DEPARTMENT SHALL PROMPTLY SEND TO ALL PERSONS WHO 27
SUBMITTED AFFIDAVITS AND COUNTER–AFFIDAVITS NOTICE OF THE DECISION. 28
(3) NOTICE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION 29
SHALL: 30
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT 31
REQUESTED , AND BY FIRST–CLASS MAIL; AND 32
(II) STATE THAT THE DEPARTMENT : 33
4 HOUSE BILL 92
1. REASONABLY BELIEVES T HAT THE GROUND LEASE 1
HOLDER HAS VIOLATED SUBSECT ION (A)(1) OF THIS SECTION; AND 2
2. MAY VOID A RELEVANT GROUND LEASE 3
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS, WITHIN 4
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOL DER FILES AN 5
ACTION IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS SECTION. 6
(D) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 7
COUNTER–AFFIDAVITS, AND SUPPORTING DOCUM ENTS, THE DEPARTMENT 8
REASONABLY BELIEVES THAT THE GROUND LEASE HOL DER DID NOT VIOLATE 9
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROMPTLY SEND 10
TO ALL PERSONS WHO S UBMITTED AFFIDAVITS OR TIMELY FILED 11
COUNTER–AFFIDAVITS NOTICE OF THE DECISION. 12
(2) NOTICE REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION 13
SHALL: 14
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT 15
REQUESTED , AND BY FIRST–CLASS MAIL; AND 16
(II) STATE THAT: 17
1. THE DEPARTMENT REASONABLY BELIEVES THAT THE 18
GROUND LEASE HOLDER DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION ; 19
AND 20
2. THE DEPARTMENT WILL TAKE NO FURTHER ACTION 21
UNLESS, WITHIN 45 DAYS AFTER THE DATE OF THE NOTICE , THE LEASEHOLD 22
TENANT FILES AN ACTI ON IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS 23
SECTION. 24
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY THE DEPARTMENT 25
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDER OR A LEASEHOLD TENAN T 26
MAY FILE AN ACTION IN THE CIRCUIT COURT . 27
(2) AN ACTION FILED UNDER THIS SUBSECTION SHALL BE FILED: 28
(I) WITHIN 45 DAYS AFTER THE DATE OF NOTICE BY THE 29
DEPARTMENT ; AND 30
(II) 1. IN THE CIRCUIT COURT FOR THE COUNTY IN WH ICH 31
THE PETITIONER RESIDES; OR 32 HOUSE BILL 92 5
2. IF THE PERSON DOES NO T RESIDE IN THE STATE, IN 1
THE CIRCUIT COURT FO R THE COUNTY IN WHIC H THE PROPERTY SUBJECT TO THE 2
GROUND LEASE IS LOCATED. 3
(3) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE HEARD DE 4
NOVO BY THE CIRCUIT COURT. 5
(4) EACH PERSON WHO WAS S ENT A NOTICE UNDER S UBSECTION (C) 6
OR (D) OF THIS SECTION SHAL L BE A PARTY TO AN ACTION FILED U NDER THIS 7
SUBSECTION. 8
(5) THE DEPARTMENT MAY NOT BE JOINED AS A PARTY IN AN ACTION 9
UNDER THIS SUBSECTIO N. 10
(F) (1) IF A COURT DETERMINES THAT A GROUND LEASE HOLDER HAS 11
VIOLATED SUBSECTIO N (A)(1) OF THIS SECTION: 12
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE 13
DEPARTMENT TO VOID THE APPROPRIATE GROUND LEASE REGISTR ATION OR 14
AMENDMENT IN THE DEPARTMENT ’S RECORDS; 15
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 16
ORDER TO THE DEPARTMENT ; AND 17
(III) THE DEPARTMENT SHALL PROMPTLY VOID THE 18
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S 19
RECORDS THAT THE RELEVANT GROUND LEASE REGISTR ATION OR AMENDM ENT IS 20
VOID UNDER A COURT ORDER . 21
(2) IF A COURT DETERMINES THAT THE GROUND LEAS E HOLDER HAS 22
NOT VIOLATED SUBSECT ION (A)(1) OF THIS SECTION: 23
(I) THE COURT SHALL ENTER AN ORDER FINDING THAT T HE 24
COLLECTION OR ATTEMP TED COLLECTION THAT WAS THE SUBJECT OF THE 25
COMPLAINT WAS NOT UN LAWFUL; AND 26
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 27
ORDER TO THE DEPARTMENT . 28
(G) (1) A GROUND LEASE HOLDER OR LEASEHOLD TENANT WHO FILES AN 29
ACTION UNDER SUBSECT ION (E) OF THIS SECTION SHALL MAIL A COPY OF THE 30 6 HOUSE BILL 92
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF 1
DECISION ISSUED BY THE DEPARTMENT . 2
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A 3
COMPLAINT FILED UNDE R SUBSECTION (E) OF THIS SECTION WITHIN 45 DAYS AFTER 4
THE DATE OF THE NOTI CE OF DECISION ISSUED B Y THE DEPARTMENT , THE 5
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECISION. 6
(H) A GROUND LEASE REGISTR ATION OR AMENDMENT T HAT HAS BEEN 7
VOIDED BY THE DEPARTMENT UNDER THIS SECTION MAY NOT BE CONSIDERED 8
REGISTERED. 9
(I) THE DEPARTMENT SHALL INCL UDE NOTICE ON ALL GR OUND RENT 10
FORMS AND ON ITS WEB SITE IN SUBSTANTIALLY THE FOLLOW ING FORM: 11
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HOLDER MAY NOT 12
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST, 13
COLLECTION COSTS , OR ANY OTHER EXPENSE S RELATED TO A GROUND LEASE THAT 14
IS NOT REGISTERED AND POSTED ON THE DEPARTMENT ’S ONLINE GROUND RENT 15
REGISTRY.”. 16
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A 17
FORM COUNTER–AFFIDAVIT THAT SHALL BE USED BY A LEASEHOLD TENAN T AND 18
GROUND LEASE HOLDER , RESPECTIVELY , FOR SUBMISSION S MADE TO THE 19
DEPARTMENT UNDER SUBSECTION (B) OF THIS SECTION. 20
(2) THE FORM AFFIDAVIT AND FORM COUNTER–AFFIDAVIT 21
DEVELOPED BY THE DEPARTMENT SHALL INCLUDE AN ACKNOWLED GMENT THAT 22
THE FORM IS BEING SIGNED UNDER PENALTY OF PER JURY. 23
(K) THE DEPARTMENT MAY NOT CH ARGE A FEE TO CARRY OUT THIS 24
SECTION. 25
(L) THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS 26
SECTION. 27
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 28
October 1, 2023. 29