EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0092*
HOUSE BILL 92
N1 3lr0509
(PRE–FILED) CF SB 193
By: Delegate Holmes
Requested: October 5, 2022
Introduced and read first time: January 11, 2023
Assigned to: Environment and Transportation
Committee Report: Favorable
House action: Adopted
Read second time: February 25, 2023
CHAPTER ______
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
2 HOUSE BILL 92
Article – Real Property 1
8–703. 2
(a) (1) The Department shall maintain an online registry of all properties that 3
are subject to ground leases. 4
(2) The online registry shall: 5
(i) Identify properties for which a renewal notice to preserve the 6
irredeemability of an irredeemable ground lease has been filed; and 7
(ii) Include a clear notation of the expiration date for each renewal 8
notice. 9
(b) A GROUND LEASE OR AN A MENDMENT IS NOT REGISTERED UNTIL THE 10
GROUND LEASE OR AMEN DMENT IS POSTED ON T HE ONLINE REGISTRY . 11
(C) The Department is not responsible for the completeness or accuracy of the 12
contents of the online registry. 13
8–707. 14
(A) If a ground lease is not registered in accordance with this subtitle, the ground 15
lease holder may not: 16
(1) Collect OR ATTEMPT TO COLLEC T any ground rent payments [due 17
under], LATE FEES, INTEREST, COLLECTION COST S, OR OTHER EXPENSE S RELATED 18
TO the ground lease; 19
(2) Bring a civil action against the leasehold tenant to enforce any rights 20
the ground lease holder may have under the ground lease; or 21
(3) Bring an action against the leasehold tenant under Subtitle 8 of this 22
title. 23
(B) (1) A LEASEHOLD TENANT WHO BELIEVES THAT A GROU ND LEASE 24
HOLDER HAS COLLECTED OR ATTEMPT ED TO COLLECT GROUND RENT PAYMENT , 25
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE 26
GROUND LEASE IN VIOL ATION OF SUBSECTION (A)(1) OF THIS SECTION MAY SUBMIT 27
TO THE DEPARTMENT AN AFFIDAVIT STATING THE FACTUAL BASIS FOR THE 28
LEASEHOLD TENANT ’S BELIEF AND ANY DOCUM ENTS IN SUPPORT OF THE 29
AFFIDAVIT. 30
HOUSE BILL 92 3
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPPORTING 1
DOCUMENTS SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE 2
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE 3
SUBJECT OF THE SUBMISSION STATING THAT: 4
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION 5
ALLEGING THAT THE GROUND LEASE HOLDER HAS VIOLATED SUBSECTION (A)(1) OF 6
THIS SECTION; AND 7
(II) THE RELEVANT GROUND LEASE REGISTR ATION OR 8
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER 9
FOR THE PROPERTY IN QUESTION MAY BE VOIDED IN THE DEPARTMENT ’S RECORDS 10
UNLESS, WITHIN 45 DAYS AFTER THE NOTICE, THE GROUND LEASE HOL DER SUBMITS 11
TO THE DEPARTMENT A COUNTER–AFFIDAVIT AND ANY DOCUMENTS IN SUPPORT OF 12
THE COUNTER –AFFIDAVIT THAT SETS FORTH THE GROUND LEA SE HOLDER’S BELIEF 13
THAT ANY COLLECTION OR ATTEMPTED COLLECT ION DESCRIBED IN THE AFFIDAVIT 14
DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION AND THE FACT UAL BASIS 15
FOR THAT BELIEF . 16
(3) NOTICE SENT TO THE GROUND L EASE HOLDER UNDER 17
PARAGRAPH (2) OF THIS SUBSECTION S HALL: 18
(I) BE SENT BY CERTIFIED MA IL, RETURN RECEIPT 19
REQUESTED , AND BY FIRST –CLASS MAIL TO THE AD DRESS PROVIDED IN TH E 20
GROUND LEASE HOLDER ’S GROUND LEASE REGIS TRATION OR AMENDMENT , OR TO 21
ANY OTHER ADDRESS US ED BY THE GROUND LEA SE HOLDER KNOWN TO T HE 22
DEPARTMENT ; AND 23
(II) INCLUDE A COPY OF THE AFFIDAVIT AND ANY SUPPORTING 24
DOCUMENTS SUBMITTED BY THE LEASEHOLD TENANT TO THE DEPARTMENT . 25
(C) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 26
COUNTER–AFFIDAVITS, AND ANY SUPPORTING D OCUMENTS, THE DEPARTMENT 27
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER VIOLATED SUBSECTION 28
(A)(1) OF THIS SECTION, THE DEPARTMENT MAY MAKE A FINAL DECISION. 29
(2) FOLLOWING A DECISION MADE UNDER PARAGRAPH (1) OF THIS 30
SUBSECTION, THE DEPARTMENT SHALL PROMPTLY SEND TO ALL PERSONS WHO 31
SUBMITTED AFFIDAVITS AND COUNTER–AFFIDAVITS NOTICE OF THE DECISION. 32
(3) NOTICE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION 33
SHALL: 34
4 HOUSE BILL 92
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT 1
REQUESTED , AND BY FIRST–CLASS MAIL; AND 2
(II) STATE THAT THE DEPARTMENT : 3
1. REASONABLY BELIEVES T HAT THE GROUND LEASE 4
HOLDER HAS VIOLATED SUBSECT ION (A)(1) OF THIS SECTION; AND 5
2. MAY VOID A RELEVANT GROUND LEASE 6
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS, WITHIN 7
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOL DER FILES AN 8
ACTION IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS SECTION. 9
(D) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 10
COUNTER–AFFIDAVITS, AND SUPPORTING DOCUM ENTS, THE DEPARTMENT 11
REASONABLY BELIEVES THAT THE GROUND LEASE HOL DER DID NOT VIOLATE 12
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROMPTLY SEND 13
TO ALL PERSONS WHO S UBMITTED AFFIDAVITS OR TIMELY FILED 14
COUNTER–AFFIDAVITS NOTICE OF THE DECISION. 15
(2) NOTICE REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION 16
SHALL: 17
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT 18
REQUESTED , AND BY FIRST–CLASS MAIL; AND 19
(II) STATE THAT: 20
1. THE DEPARTMENT REASONABLY BELIEVES THAT THE 21
GROUND LEASE HOLDER DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION ; 22
AND 23
2. THE DEPARTMENT WILL TAKE NO FURTHER ACTION 24
UNLESS, WITHIN 45 DAYS AFTER THE DATE OF THE NOTICE , THE LEASEHOLD 25
TENANT FILES AN ACTI ON IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS 26
SECTION. 27
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY THE DEPARTMENT 28
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDER OR A LEASEHOLD TENAN T 29
MAY FILE AN ACTION IN THE CIRCUIT COURT . 30
(2) AN ACTION FILED UNDER THIS SUBSECTION SHALL BE FILED: 31
HOUSE BILL 92 5
(I) WITHIN 45 DAYS AFTER THE DATE OF NOTICE BY THE 1
DEPARTMENT ; AND 2
(II) 1. IN THE CIRCUIT COURT FOR THE COUNTY IN WH ICH 3
THE PETITIONER RESIDES; OR 4
2. IF THE PERSON DOES NO T RESIDE IN THE STATE, IN 5
THE CIRCUIT COURT FO R THE COUN TY IN WHICH THE PROP ERTY SUBJECT TO THE 6
GROUND LEASE IS LOCATED. 7
(3) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE HEARD DE 8
NOVO BY THE CIRCUIT COURT. 9
(4) EACH PERSON WHO WAS S ENT A NOTICE UNDER S UBSECTION (C) 10
OR (D) OF THIS SECTION SHAL L BE A PARTY TO AN ACTION FILED U NDER THIS 11
SUBSECTION. 12
(5) THE DEPARTMENT MAY NOT BE JOINED AS A PARTY IN AN ACTION 13
UNDER THIS SUBSECTIO N. 14
(F) (1) IF A COURT DETERMINES THAT A GROUND LEASE HOLDER HAS 15
VIOLATED SUBSECTIO N (A)(1) OF THIS SECTION: 16
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE 17
DEPARTMENT TO VOID THE APPROPRIATE GROUND LEASE REGISTR ATION OR 18
AMENDMENT IN THE DEPARTMENT ’S RECORDS; 19
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 20
ORDER TO THE DEPARTMENT ; AND 21
(III) THE DEPARTMENT SHALL PROMPTLY VOID THE 22
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S 23
RECORDS THAT THE RELEVANT GROUND LEASE REGISTR ATION OR AMENDMENT IS 24
VOID UNDER A COURT ORDER . 25
(2) IF A COURT DETERMINES THAT THE GROUND LEAS E HOLDER HAS 26
NOT VIOLATED SUBSECT ION (A)(1) OF THIS SECTION: 27
(I) THE COURT SHALL ENTER AN ORDER FINDING THAT T HE 28
COLLECTION OR ATTEMPTED COLLECTION THAT WAS THE SUBJECT OF THE 29
COMPLAINT WAS NOT UN LAWFUL; AND 30
6 HOUSE BILL 92
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 1
ORDER TO THE DEPARTMENT . 2
(G) (1) A GROUND LEASE HOLDER OR LEASEHOLD TENANT WHO FILES AN 3
ACTION UNDER SUBSECT ION (E) OF THIS SECTION SHALL MAIL A COPY OF THE 4
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF 5
DECISION ISSUED BY THE DEPARTMENT . 6
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A 7
COMPLAINT FILED UNDE R SUBSECTION (E) OF THIS SECTION WITHIN 45 DAYS AFTER 8
THE DATE OF THE NOTI CE OF DECISION ISSUED B Y THE DEPARTMENT , THE 9
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECISION. 10
(H) A GROUND LEASE REGISTR ATION OR AMENDMENT T HAT HAS BEEN 11
VOIDED BY THE DEPARTMENT UNDER THIS SECTION MAY NOT BE CONSIDERED 12
REGISTERED. 13
(I) THE DEPARTMENT SHALL INCL UDE NOTICE ON ALL GR OUND RENT 14
FORMS AND ON ITS WEB SITE IN SUBSTANTIALLY THE FOLLOW ING FORM: 15
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HOLDER MAY NOT 16
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST, 17
COLLECTION COSTS , OR ANY OTHER EXPENSE S RELATED TO A GROUND LEASE THAT 18
IS NOT REGISTERED AND POSTED ON THE DEPARTMENT ’S ONLINE GROUND RENT 19
REGISTRY.”. 20
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A 21
FORM COUNTER–AFFIDAVIT THAT SHALL BE USED BY A LEASEHOLD TENAN T AND 22
GROUND LEASE HOLDER , RESPECTIVELY , FOR SUBMISSION S MADE TO THE 23
DEPARTMENT UNDER SUBSECTION (B) OF THIS SECTION. 24
(2) THE FORM AFFIDAVIT AND FORM COUNTER–AFFIDAVIT 25
DEVELOPED BY THE DEPARTMENT SHALL INCLUDE AN ACKNOWLED GMENT THAT 26
THE FORM IS BEING SIGNED UNDER PENALTY OF PER JURY. 27
(K) THE DEPARTMENT MAY NOT CH ARGE A FEE TO CARRY OUT THIS 28
SECTION. 29
(L) THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS 30
SECTION. 31
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 32
October 1, 2023. 33