EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0921*
HOUSE BILL 921
Q2, Q1 3lr2092
CF SB 855
By: Delegate Smith
Introduced and read first time: February 9, 2023
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Property Tax – In Rem Foreclosure 2
FOR the purpose of authorizing certain vacant property and nuisance property located in 3
Baltimore City to be subject to a certain in rem foreclosure process; requiring service 4
of a complaint for in rem foreclosure to be served in accordance with the Maryland 5
Rules; providing for the distribution of surplus proceeds from the sale of property 6
subject to an in rem foreclosure; authorizing an in rem foreclosure order to be set 7
aside under certain circumstances; providing for the redemption amounts required 8
to be paid when an in rem foreclosure is set aside; and generally relating to in rem 9
foreclosure of property. 10
BY repealing and reenacting, with amendments, 11
Article – Tax – Property 12
Section 14–874 through 14–876 13
Annotated Code of Maryland 14
(2019 Replacement Volume and 2022 Supplement) 15
BY adding to 16
Article – Tax – Property 17
Section 14–877 and 14–878 18
Annotated Code of Maryland 19
(2019 Replacement Volume and 2022 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – Tax – Property 23
14–874. 24
2 HOUSE BILL 921
(a) (1) [Real] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 1
SUBSECTION, REAL property may be subject to foreclosure and sale under this part only 2
if: 3
[(1)] (I) the property consists of a vacant lot or improved property cited 4
as vacant and unsafe or unfit for habitation or other authorized use on a housing or building 5
violation notice; and 6
[(2)] (II) the total amount of liens for unpaid taxes on the property exceeds 7
the lesser of the total value of the property as last determined by the Department or as 8
determined by an appraisal report prepared not more than 6 months before the filing of a 9
complaint under this section by a real estate appraiser who is licensed under Title 16 of the 10
Business Occupations and Professions Article. 11
(2) REAL PROPERTY LOCATED IN BALTIMORE CITY MAY BE SUBJECT 12
TO FORECLOSURE AND S ALE UNDER THIS PART IF: 13
(I) THE PROPERTY IS A VA CANT PROPERTY OR A NUISANCE 14
PROPERTY, AS DETERMINED UNDER THE BALTIMORE CITY BUILDING CODE; AND 15
(II) THE TOTAL AMOUNT OF LIENS FOR UNPAID TAX ES ON THE 16
PROPERTY EXCEEDS A P ERCENTAGE OF THE TOT AL VALUE OF THE PROP ERTY SET 17
BY LOCAL ORDINANCE B ASED ON THE VALUE OF THE PROPER TY AS LAST 18
DETERMINED BY THE DEPARTMENT OR AS DETE RMINED BY AN APPRAIS AL REPORT 19
PREPARED NOT MORE TH AN 6 MONTHS BEFORE THE FI LING OF A COMPLAINT UNDER 20
THIS SECTION BY A RE AL ESTATE APPRAISER WHO IS LICENSED UNDE R TITLE 16 OF 21
THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 22
(b) (1) A county or municipal corporation may authorize by law an in rem 23
foreclosure in accordance with this part. 24
(2) A law that authorizes an in rem foreclosure shall: 25
(i) state the date after which real property may be subject to in rem 26
foreclosure under this part; 27
(ii) establish criteria for designating real property to be foreclosed 28
under this part; 29
(iii) authorize the county or municipal corporation to file a complaint 30
for an in rem foreclosure under this part; and 31
(iv) include administrative rules and procedures necessary to carry 32
out an in rem foreclosure under this part. 33
HOUSE BILL 921 3
(c) (1) Subject to subsection (d) of this section, a county or municipal 1
corporation may authorize, by law, the sale of real property after an in rem foreclosure and 2
designate real property to be sold under this part. 3
(2) A law that authorizes a sale of real property after an in rem foreclosure 4
shall: 5
(i) state the date after which the real property may be subject to sale 6
after an in rem foreclosure under this part; 7
(ii) establish criteria for designating real property to be sold under 8
this part; and 9
(iii) include administrative rules and procedures necessary to carry 10
out a sale under this part. 11
(d) [Only] EXCEPT AS PROV IDED IN SUBSECTION (A)(2) OF THIS SECTION , 12
ONLY real property that consists of a vacant lot or improved property cited as vacant and 13
unsafe or unfit for habitation or other authorized use on a housing or building violation 14
notice may be sold under this part. 15
14–875. 16
(a) A county or municipal corporation may file a complaint for an in rem 17
foreclosure action in accordance with this part. 18
(b) The county or municipal corporation may not file a complaint for an in rem 19
foreclosure action unless: 20
(1) the tax on the real property has been delinquent for at least 6 months; 21
and 22
(2) (I) the right to appeal the notice of the property as vacant and 23
unsafe or unfit has tolled; OR 24
(II) THE RIGHT TO APPEAL THE NOTICE OF THE PR OPERTY AS 25
VACANT PROPERTY OR A NUISANCE PROPERTY , AS DETERMINED UNDER THE 26
BALTIMORE CITY BUILDING CODE, HAS TOLLED. 27
(c) All taxes shall: 28
(1) be included in the foreclosure action; and 29
(2) cease to be a lien against the real property if a judgment is entered 30
foreclosing the existing interests of all interested parties in the real property. 31
4 HOUSE BILL 921
(d) The county or municipal corporation shall: 1
(1) file the complaint for an in rem foreclosure in the circuit court of the 2
county where the real property is located; and 3
(2) [within 5 days after filing the complaint, send notice and a copy of] 4
SERVE the complaint to each interested party [by first–class mail and certified mail, 5
postage prepaid, return receipt requested, bearing a postmark from the United States 6
Postal Service] IN ACCORDA NCE WITH THE MARYLAND RULES. 7
(e) The complaint for an in rem foreclosure shall include: 8
(1) the identity of the county or municipal corporation on behalf of which 9
the complaint is filed; 10
(2) the name and address of the county or municipal corporation; 11
(3) a description of the real property as it appears in the county land 12
records; 13
(4) the tax identification number of the real property; 14
(5) a statement that the taxes are delinquent at the time of the filing; 15
(6) the amount of taxes that are delinquent as of the date of filing; 16
(7) the names and last known addresses of all interested parties in the real 17
property and, if applicable, a statement that the address of a particular interested party in 18
the real property is unknown; 19
(8) a statement that the real property is: 20
(I) a vacant lot or improved property cited as vacant and unsafe or 21
unfit for habitation or other authorized use on a housing or building violation notice; OR 22
(II) A VACANT PROPERTY OR A NUISANCE PROPERTY , AS 23
DETERMINED UNDER THE BALTIMORE CITY BUILDING CODE; 24
(9) copies of any violation notice cited under paragraph (8) of this 25
subsection; 26
(10) a request that the circuit court not schedule a hearing on the complaint 27
until 30 days after the date that the complaint is filed; and 28
HOUSE BILL 921 5
(11) a request that the circuit court enter a judgment that forecloses the 1
existing interests of all interested parties in the real property and orders ownership of the 2
real property to be transferred to the county or municipal corporation. 3
(f) A complaint for an in rem foreclosure may be amended to include all taxes 4
that become delinquent after the commencement of the in rem foreclosure action. 5
(g) (1) Subject to paragraph (2) of this subsection, an interested party has the 6
right to cure the delinquent taxes and liens on the real property by paying all past due fees, 7
payments, and penalties at any time before the entry of the foreclosure judgment. 8
(2) The right to cure the delinquent taxes and liens on the real property 9
extinguishes once the foreclosure judgment is entered. 10
14–876. 11
(a) A circuit court may not set a hearing for an in rem foreclosure until 30 days 12
after the complaint for an in rem foreclosure is filed. 13
(b) At the hearing, any interested party shall have the right to be heard and to 14
contest the delinquency of the taxes and the adequacy of the proceedings. 15
(c) If the circuit court finds that the county or municipal corporation sent notice 16
and a copy of the complaint to each interested party in accordance with § 14–875(d) of this 17
subtitle and that the information set forth in the complaint is accurate, the court shall: 18
(1) enter a judgment that: 19
(i) proper notice has been provided to all interested parties; and 20
(ii) the real property is: 21
1. a vacant lot or an improved property cited as vacant and 22
unsafe or unfit for habitation or other authorized use on a housing or building violation 23
notice; OR 24
2. A VACANT PROPERTY OR A NUISANCE PROPERTY , AS 25
DETERMINED UNDER THE BALTIMORE CITY BUILDING CODE; and 26
(2) order that ownership of the real property be transferred to the county 27
or municipal corporation on behalf of which the complaint was filed. 28
(d) (1) The county or municipal corporation shall record a judgment under 29
subsection (c) of this section in the land records of the county. 30
6 HOUSE BILL 921
(2) The title acquired in an in rem foreclosure proceeding shall be an 1
absolute or fee simple title including the right, title, and interest of each of the defendants 2
in the proceeding whose property has been foreclosed unless a different title is specified in 3
the judgment entered. 4
(3) A judgment in an action under this part is binding and conclusive, 5
regardless of legal disability, on: 6
(i) all persons, known and unknown, who were parties to the action 7
and who had a claim to the property, whether present or future, vested or contingent, legal 8
or equitable, or several or undivided; and 9
(ii) all persons who were not parties to the action and had a claim to 10
the property that was not recorded at the time that the action was commenced. 11
14–877. 12
(A) IN THIS SECTION, “SURPLUS PROCEEDS ” MEANS THE PROCEEDS F ROM 13
THE SALE OF PROPERTY SOLD WITHIN 1 YEAR FROM WHEN THE P ROPERTY WAS 14
OBTAINED BY A COUNTY OR MUNICIPAL CORPORA TION THROUGH AN IN R EM 15
FORECLOSURE , THAT EXCEED THE SUM O F: 16
(1) THE DELINQUENT TAXES , FEES, AND PENALTIES ON THE 17
PROPERTY; AND 18
(2) THE VALUE OF ALL IMP ROVEMENTS MADE ON TH E PROPERTY AND 19
ALL COSTS INCURRED W ITH RESPECT TO DEVEL OPMENT OF THE PROPER TY PRIOR 20
TO THE SALE BY THE C OUNTY OR MUN ICIPAL CORPORATION . 21
(B) (1) SURPLUS PROCEEDS SHAL L BE HELD BY A COUNT Y OR 22
MUNICIPALITY FOR A P ERIOD OF 12 MONTHS. 23
(2) AFTER 12 MONTHS, SURPLUS PROCEEDS SHA LL BE DISTRIBUTED 24
TO ANY PERSON WITH A N OUTSTANDING CLAIM ON THE PROPERTY , IN ORDER OF 25
PRIORITY. 26
(C) EACH COUNTY AND MUNIC IPALITY SHALL MAINTA IN A LIST OF 27
PROPERTIES OBTAINED THROUGH IN REM FOREC LOSURE THAT HAVE BEE N SOLD 28
WITHIN 1 YEAR FROM WHEN THE P ROPERTY WAS OBTAINED AND FOR WHICH THE 29
SALE HAS RESULTED IN SURPLUS PROCEEDS . 30
14–878. 31
HOUSE BILL 921 7
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , A 1
COURT MAY NOT REOPEN A JUDGMENT RENDERED IN AN IN REM FORECLO SURE 2
PROCEEDING IN ACCORD ANCE WITH THIS PART EXCEPT ON THE GROUND OF LACK 3
OF JURISDICTION OR F RAUD IN THE CONDUCT OF THE PROCEEDINGS T O 4
FORECLOSE. 5
(2) A COURT MAY NOT REOPEN ANY JUDGMENT UNDER P ARAGRAPH 6
(1) OF THIS SUBSECTION O N THE GROUND OF CONS TRUCTIVE FRAUD IN TH E 7
CONDUCT OF THE PROCE EDINGS TO FORECLOSE UNLESS AN APPLICATIO N TO 8
REOPEN A JUDGMENT RE NDERED IS FILED WITH IN 1 YEAR FROM T HE DATE OF THE 9
JUDGMENT. 10
(B) A PLAINTIFF IN AN ACTI ON TO REOPEN AN IN R EM FORECLOSURE 11
JUDGMENT SHALL : 12
(1) EXCEPT AS PROVIDED I N SUBSECTION (A)(2) OF THIS SECTION , 13
FILE THE ACTION WITH IN 3 YEARS OF THE ISSUANC E OF THE IN REM FORE CLOSURE 14
JUDGMENT; AND 15
(2) WITHIN 30 DAYS OF FILING THE A CTION, SUBMIT EVIDENCE TO 16
THE COURT THAT THE P LAINTIFF HAS OBTAINE D A BOND EQUAL TO TH E 17
REASONABLE VALUE OF THE PROPERTY . 18
(C) IF AN IN REM FORECLOS URE JUDGMENT OF THE COURT IS SET ASIDE , 19
THE AMOUNT REQUIRED TO REDEEM IS: 20
(1) THE AMOUNT REQUIRED BY THIS SUBTITLE; AND 21
(2) THE REASONABLE VALUE , AT THE DATE THE JUDG MENT IS SET 22
ASIDE, OF ALL IMPROVEMENTS MADE ON THE PROPERTY AND ALL COSTS INCURR ED 23
WITH RESPECT TO DEVE LOPMENT OF THE PROPE RTY BY THE PURCHASER AND THE 24
PURCHASER’S SUCCESSORS IN INTE REST. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
October 1, 2023. 27