WES MOORE, Governor Ch. 180
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Chapter 180
(House Bill 92)
AN ACT concerning
Ground Leases – Collection of Rent, Interest, Fees, and Other Expenses –
Registration Requirements
FOR the purpose of establishing that ground leases and amendments that are not posted
on the State Department of Assessments and Taxation’s website are not considered
registered; prohibiting a ground lease holder from collecting or attempting to collect
rent, late fees, interest, collection costs, and other expenses related to a ground lease
unless the ground lease is registered with the Department; establishing a process
within the Department to render decisions on the legality of efforts by a ground lease
holder to collect rent, late fees, interest, collection costs, and other expenses;
authorizing a ground lease holder or leasehold tenant to file suit in circuit court for
a certain judicial determination following a decision by the Department; requiring
the Department to develop and make available certain forms and post a certain
notice on its website; and generally relating to ground leases.
BY repealing and reenacting, with amendments,
Article – Real Property
Section 8–703 and 8–707
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Real Property
8–703.
(a) (1) The Department shall maintain an online registry of all properties that
are subject to ground leases.
(2) The online registry shall:
(i) Identify properties for which a renewal notice to preserve the
irredeemability of an irredeemable ground lease has been filed; and
(ii) Include a clear notation of the expiration date for each renewal
notice.
Ch. 180 2023 LAWS OF MARYLAND
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(b) A GROUND LEASE OR AN A MENDMENT IS NOT REGISTERED UNTIL THE
GROUND LEASE OR AMEN DMENT IS POSTED ON T HE ONLINE REGISTRY .
(C) The Department is not responsible for the completeness or accuracy of the
contents of the online registry.
8–707.
(A) If a ground lease is not registered in accordance with this subtitle, the ground
lease holder may not:
(1) Collect OR ATTEMPT TO COLLEC T any ground rent payments [due
under], LATE FEES, INTEREST, COLLECTION COST S, OR OTHER EXPENSE S RELATED
TO the ground lease;
(2) Bring a civil action against the leasehold tenant to enforce any rights
the ground lease holder may have under the ground lease; or
(3) Bring an action against the leasehold tenant under Subtitle 8 of this
title.
(B) (1) A LEASEHOLD TENANT WHO BELIEVES THAT A GROU ND LEASE
HOLDER HAS COLLECTED OR ATTEMPT ED TO COLLECT GROUND RENT PAYMENT ,
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE
GROUND LEASE IN VIOLATION OF SUBSECT ION (A)(1) OF THIS SECTION MAY SUBMIT
TO THE DEPARTMENT AN AFFIDAVIT STATING THE FACTUAL BASIS FOR THE
LEASEHOLD TENANT ’S BELIEF AND ANY DOCUM ENTS IN SUPPORT OF THE
AFFIDAVIT.
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPPOR TING
DOCUME NTS SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE
SUBJECT OF THE SUBMISSION STATING THAT:
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION
ALLEGING THAT THE GROUND LEASE HOLDER HAS VIOLATED SUBSECTION (A)(1) OF
THIS SECTION; AND
(II) THE RELEVANT GROUND LEASE REGISTR ATION OR
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER
FOR THE PROPERTY IN QUESTION MAY BE VOIDED IN THE DEPARTMENT ’S RECORDS
UNLESS, WITHIN 45 DAYS AFTER THE NOTICE, THE GROUND LEASE HOL DER SUBMITS
TO THE DEPARTMENT A COUNTER–AFFIDAVIT AND ANY DOCUMENTS IN SUPPORT OF WES MOORE, Governor Ch. 180
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THE COUNTER –AFFIDAVIT THAT SETS FORTH THE GROUND LEA SE HOLDER’S BELIEF
THAT ANY COLLECTION OR ATTEMPTED COLLECT ION DESCRIBED IN THE AFFIDAVIT
DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION AND THE FACT UAL BASIS
FOR THAT BELIEF .
(3) NOTICE SENT TO THE GROUND L EASE HOLDER UNDER
PARAGRAPH (2) OF THIS SUBSECTION S HALL:
(I) BE SENT BY CERTIFIED MA IL, RETURN RECEIPT
REQUESTED , AND BY FIRST –CLASS MAIL TO THE AD DRESS PROVIDED IN TH E
GROUND LEASE HOLDER ’S GROUND LEASE REGIS TRATION OR AMENDMENT , OR TO
ANY OTHER ADDRESS US ED BY THE GROUND LEA SE HOLDER KNOWN TO T HE
DEPARTMENT ; AND
(II) INCLUDE A COPY OF THE AFFIDAVIT AND ANY SUPPORTING
DOCUMENTS SUBMITTED BY THE LEASEHOLD TENANT TO THE DEPARTMENT .
(C) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED
COUNTER–AFFIDAVITS, AND ANY SUPPORTING D OCUMENTS, THE DEPARTMENT
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER VIOLATED SUBSECTION
(A)(1) OF THIS SECTION, THE DEPARTMENT MAY MAKE A FINAL DECISION.
(2) FOLLOWING A DECISION MADE UNDER PARAGRAPH (1) OF THIS
SUBSECTION, THE DEPARTMENT SHALL PROMPTLY SEND TO ALL PERSONS WHO
SUBMITTED AFFIDAVITS AND COUNTER–AFFIDAVITS NOTICE OF THE DECISION.
(3) NOTICE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION
SHALL:
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT
REQUESTED , AND BY FIRST–CLASS MAIL; AND
(II) STATE THAT THE DEPARTMENT :
1. REASONABLY BELIEVES T HAT THE GROUND LEASE
HOLDER HAS VIOLATED SUBSECT ION (A)(1) OF THIS SECTION; AND
2. MAY VOID A RELEVANT GROUND LEASE
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS, WITHIN
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOL DER FILES AN
ACTION IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS SECTION.
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(D) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED
COUNTER–AFFIDAVITS, AND SUPPORTING DOCUM ENTS, THE DEPARTMENT
REASONABLY BELIEVES THAT THE GROUND LEASE HOL DER DID NOT VIOLATE
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROMPTLY SEND
TO ALL PERSONS WHO S UBMITTED AFFIDAVITS OR TIMELY FILED
COUNTER–AFFIDAVITS NOTICE OF THE DECISION.
(2) NOTICE REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION
SHALL:
(I) BE SENT BY CERTIFIED MAIL , RETURN RECEIPT
REQUESTED , AND BY FIRST–CLASS MAIL; AND
(II) STATE THAT:
1. THE DEPARTMENT REASONABLY BELIEVES THAT THE
GROUND LEASE HOLDER DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION ;
AND
2. THE DEPARTMENT WILL TAKE NO FURTHER ACTION
UNLESS, WITHIN 45 DAYS AFTER THE DATE OF THE NOTICE , THE LEASEHOLD
TENANT FILES AN ACTI ON IN THE CIRCUIT COURT UNDER SUBSECTION (E) OF THIS
SECTION.
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY THE DEPARTMENT
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDER OR A LEASEHOLD TENAN T
MAY FILE AN ACTION IN THE CIRCUIT COURT .
(2) AN ACTION FILED UNDER THIS SUBSECTION SHALL BE FILED:
(I) WITHIN 45 DAYS AFTER THE DATE OF NOTICE BY THE
DEPARTMENT ; AND
(II) 1. IN THE CIRCUIT COURT FOR THE COUNTY IN WH ICH
THE PETITIONER RESIDES; OR
2. IF THE PERSON DOES NO T RESIDE IN THE STATE, IN
THE CIRCUIT COURT FO R THE COUNTY IN WHIC H THE PROPERTY SUBJECT TO THE
GROUND LEASE IS LOCATED.
(3) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE HEARD DE
NOVO BY THE CIRCUIT COURT. WES MOORE, Governor Ch. 180
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(4) EACH PERSON WHO WAS S ENT A NOTICE UNDER S UBSECTION (C)
OR (D) OF THIS SECTION SHAL L BE A PARTY TO AN ACTION FILED U NDER THIS
SUBSECTION.
(5) THE DEPARTMENT MAY NOT BE JOINED AS A PARTY IN AN ACTION
UNDER THIS SUBSECTIO N.
(F) (1) IF A COURT DETERMINES THAT A GROUND LEASE HOLDER HAS
VIOLATED SUBSECTIO N (A)(1) OF THIS SECTION:
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE
DEPARTMENT TO VOID THE APPROPRIATE GROUND LEASE REGISTR ATION OR
AMENDMENT IN THE DEPARTMENT ’S RECORDS;
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE
ORDER TO THE DEPARTMENT ; AND
(III) THE DEPARTMENT SHALL PROMPTLY VOID THE
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S
RECORDS THAT THE RELEVANT GROUND LEASE REGISTR ATION OR AMENDM ENT IS
VOID UNDER A COURT ORDER .
(2) IF A COURT DETERMINES THAT THE GROUND LEAS E HOLDER HAS
NOT VIOLATED SUBSECT ION (A)(1) OF THIS SECTION:
(I) THE COURT SHALL ENTER AN ORDER FINDING THAT T HE
COLLECTION OR ATTEMP TED COLLECTION THAT WAS THE SUBJECT OF THE
COMPLAINT WAS NOT UN LAWFUL; AND
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE
ORDER TO THE DEPARTMENT .
(G) (1) A GROUND LEASE HOLDER OR LEASEHOLD TENANT WHO FILES AN
ACTION UNDER SUBSECT ION (E) OF THIS SECTION SHALL MAIL A COPY OF THE
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF
DECISION ISSUED BY THE DEPARTMENT .
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A
COMPLAINT FILED UNDE R SUBSECTION (E) OF THIS SECTION WITHIN 45 DAYS AFTER
THE DATE OF THE NOTI CE OF DECISION ISSUED B Y THE DEPARTMENT , THE
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECISION.
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(H) A GROUND LEASE REGISTR ATION OR AMENDMENT T HAT HAS BEEN
VOIDED BY THE DEPARTMENT UNDER THIS SECTION MAY NOT BE CONSIDERED
REGISTERED.
(I) THE DEPARTMENT SHALL INCL UDE NOTICE ON ALL GR OUND RENT
FORMS AND ON ITS WEB SITE IN SUBSTANTIALLY THE FOLLOW ING FORM:
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HOLDER MAY NOT
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST,
COLLECTION COSTS, OR ANY OTHER EXPENSE S RELATED TO A GROUND LEASE THAT
IS NOT REGISTERED AND POSTED ON THE DEPARTMENT ’S ONLINE GROUND RENT
REGISTRY.”.
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A
FORM COUNTER–AFFIDAVIT THAT SHALL BE USED BY A LEASEHOLD TENAN T AND
GROUND LEASE HOLDER , RESPECTIVELY , FOR SUBMISSION S MADE TO THE
DEPARTMENT UNDER SUBSECTION (B) OF THIS SECTION.
(2) THE FORM AFFIDAVIT AND FORM COUNTER–AFFIDAVIT
DEVELOPED BY THE DEPARTMENT SHALL INCLUDE AN ACKNOWLED GMENT THAT
THE FORM IS BEING SIGNED UNDER PENALTY OF PER JURY.
(K) THE DEPARTMENT MAY NOT CH ARGE A FEE TO CARRY OUT THIS
SECTION.
(L) THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS
SECTION.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023.
Approved by the Governor, April 24, 2023.