MD
Maryland House Bill HB93

Maryland 2023 Regular Session

Maryland House Bill HB93 Compare Versions

OldNewDifferences
1- WES MOORE, Governor Ch. 183
21
3-– 1 –
4-Chapter 183
5-(House Bill 93)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *hb0093*
89
9-Residential Ground Leases – Redemption and Extinguishment – Requirements
10+HOUSE BILL 93
11+N1 3lr0510
12+ (PRE–FILED) CF SB 196
13+By: Delegate Holmes
14+Requested: October 5, 2022
15+Introduced and read first time: January 11, 2023
16+Assigned to: Environment and Transportation
17+Committee Report: Favorable
18+House action: Adopted
19+Read second time: February 25, 2023
1020
11-FOR the purpose of repealing a prohibition against a leasehold tenant who is seeking to
12-redeem or extinguish a ground rent providing certain documentation and payment
13-to the State Department of Assessments and Taxation earlier than 90 days after the
14-application for redemption or extinguishment has been posted on the Department’s
15-website; and generally relating to ground leases.
21+CHAPTER ______
1622
17-BY renumbering
18- Article – Real Property
19-Section 8–801(b) through (f)
20-to be Section 8–801(c) through (g), respectively
21- Annotated Code of Maryland
22- (2015 Replacement Volume and 2022 Supplement)
23+AN ACT concerning 1
2324
24-BY repealing and reenacting, without amendments,
25- Article – Real Property
26-Section 8–801(a) and 8–804(a)
27- Annotated Code of Maryland
28- (2015 Replacement Volume and 2022 Supplement)
25+Residential Ground Leases – Redemption and Extinguishment – Requirements 2
2926
30-BY adding to
31- Article – Real Property
32- Section 8–801(b)
33- Annotated Code of Maryland
34- (2015 Replacement Volume and 2022 Supplement)
27+FOR the purpose of repealing a prohibition against a leasehold tenant who is seeking to 3
28+redeem or extinguish a ground rent providing certain documentation and payment 4
29+to the State Department of Assessments and Taxation earlier than 90 days after the 5
30+application for redemption or extinguishment has been posted on the Department’s 6
31+website; and generally relating to ground leases. 7
3532
36-BY repealing and reenacting, with amendments,
37- Article – Real Property
38-Section 8–804(f)
39- Annotated Code of Maryland
40- (2015 Replacement Volume and 2022 Supplement)
33+BY renumbering 8
34+ Article – Real Property 9
35+Section 8–801(b) through (f) 10
36+to be Section 8–801(c) through (g), respectively 11
37+ Annotated Code of Maryland 12
38+ (2015 Replacement Volume and 2022 Supplement) 13
4139
42- SECTION 1. BE IT ENACT ED BY THE GENERAL ASSEMBLY OF MARYLAND,
43-That Section(s) 8–801(b) through (f) of Article – Real Property of the Annotated Code of
44-Maryland be renumbered to be Section(s) 8–801(c) through (g), respectively.
40+BY repealing and reenacting, without amendments, 14
41+ Article – Real Property 15
42+Section 8–801(a) and 8–804(a) 16
43+ Annotated Code of Maryland 17
44+ (2015 Replacement Volume and 2022 Supplement) 18
4545
46- SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read
47-as follows:
46+BY adding to 19
47+ Article – Real Property 20
48+ Section 8–801(b) 21 2 HOUSE BILL 93
4849
49-Article – Real Property Ch. 183 2023 LAWS OF MARYLAND
5050
51-– 2 –
51+ Annotated Code of Maryland 1
52+ (2015 Replacement Volume and 2022 Supplement) 2
5253
53-8–801.
54+BY repealing and reenacting, with amendments, 3
55+ Article – Real Property 4
56+Section 8–804(f) 5
57+ Annotated Code of Maryland 6
58+ (2015 Replacement Volume and 2022 Supplement) 7
5459
55- (a) In this subtitle the following words have the meanings indicated.
60+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 8
61+That Section(s) 8–801(b) through (f) of Article – Real Property of the Annotated Code of 9
62+Maryland be renumbered to be Section(s) 8–801(c) through (g), respectively. 10
5663
57- (B) “DEPARTMENT ” MEANS THE STATE DEPARTMENT OF ASSESSMENTS
58-AND TAXATION.
64+ SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 11
65+as follows: 12
5966
60-8–804.
67+Article – Real Property 13
6168
62- (a) (1) Except as provided in subsection (f) of this section, this section does not
63-apply to irredeemable ground leases preserved under § 8–805 of this subtitle.
69+8–801. 14
6470
65- (2) This section does not apply to an affordable housing land trust
66-agreement executed under Title 14, Subtitle 5 of this article.
71+ (a) In this subtitle the following words have the meanings indicated. 15
6772
68- (f) (1) (i) A leasehold tenant who has given the ground lease holder notice
69-in accordance with subsection (b) of this section may apply to the [State] Department [of
70-Assessments and Taxation] to redeem a ground rent as provided in this subsection.
73+ (B) “DEPARTMENT ” MEANS THE STATE DEPARTMENT OF ASSESSMENTS 16
74+AND TAXATION. 17
7175
72- (ii) When the Mayor and City Council of Baltimore City acquires
73-property that is subject to an irredeemable ground rent, the City shall become the leasehold
74-tenant of the ground rent and, after giving the ground lease holder notice in accordance
75-with subsection (b) of this section, may apply to the [State] Department [of Assessments
76-and Taxation] to extinguish the ground rent as provided in this subsection.
76+8–804. 18
7777
78- (iii) When the Mayor and City Council of Baltimore City acquires
79-abandoned or distressed property that is subject to a redeemable ground rent, the City shall
80-become the leasehold tenant of the ground rent and, after giving the ground lease holder
81-notice in accordance with subsection (b) of this section, may apply to the [State]
82-Department [of Assessments and Taxation] to redeem the ground rent as provided in this
83-subsection.
78+ (a) (1) Except as provided in subsection (f) of this section, this section does not 19
79+apply to irredeemable ground leases preserved under § 8–805 of this subtitle. 20
8480
85- (2) The leasehold tenant shall provide to the [State] Department [of
86-Assessments and Taxation]:
81+ (2) This section does not apply to an affordable housing land trust 21
82+agreement executed under Title 14, Subtitle 5 of this article. 22
8783
88- (i) Documentation satisfactory to the Department of the ground
89-lease and the notice given to the ground lease holder; and
84+ (f) (1) (i) A leasehold tenant who has given the ground lease holder notice 23
85+in accordance with subsection (b) of this section may apply to the [State] Department [of 24
86+Assessments and Taxation] to redeem a ground rent as provided in this subsection. 25
9087
91- (ii) Payment of a $20 fee, and any expediting fee required under §
92-1–203 of the Corporations and Associations Article.
88+ (ii) When the Mayor and City Council of Baltimore City acquires 26
89+property that is subject to an irredeemable ground rent, the City shall become the leasehold 27
90+tenant of the ground rent and, after giving the ground lease holder notice in accordance 28
91+with subsection (b) of this section, may apply to the [State] Department [of Assessments 29
92+and Taxation] to extinguish the ground rent as provided in this subsection. 30
9393
94- (3) (i) On receipt of the items stated in paragraph (2) of this subsection,
95-the Department shall post notice on its website that application has been made to redeem
96-or extinguish the ground rent. WES MOORE, Governor Ch. 183
94+ (iii) When the Mayor and City Council of Baltimore City acquires 31
95+abandoned or distressed property that is subject to a redeemable ground rent, the City shall 32
96+become the leasehold tenant of the ground rent and, after giving the ground lease holder 33 HOUSE BILL 93 3
9797
98-– 3 –
9998
100- (ii) The notice shall remain posted for at least 90 days.
99+notice in accordance with subsection (b) of this section, may apply to the [State] 1
100+Department [of Assessments and Taxation] to redeem the ground rent as provided in this 2
101+subsection. 3
101102
102- (4) Except as provided in paragraph (5) of this subsection, [no earlier than
103-90 days after the application has been posted as provided in paragraph (3) of this
104-subsection,] a leasehold tenant seeking to redeem a ground rent shall provide to the
105-Department:
103+ (2) The leasehold tenant shall provide to the [State] Department [of 4
104+Assessments and Taxation]: 5
106105
107- (i) Payment of the redemption amount and up to 3 years’ past due
108-ground rent to the extent required under this section and § 8–806 of this subtitle, in a form
109-satisfactory to the Department; and
106+ (i) Documentation satisfactory to the Department of the ground 6
107+lease and the notice given to the ground lease holder; and 7
110108
111- (ii) An affidavit made by the leasehold tenant, in the form adopted
112-by the Department, certifying that:
109+ (ii) Payment of a $20 fee, and any expediting fee required under § 8
110+1–203 of the Corporations and Associations Article. 9
113111
114- 1. The leasehold tenant has not received a bill for ground
115-rent due or other communication from the ground lease holder regarding the ground rent
116-during the 3 years immediately before the filing of the documentation required for the
117-issuance of a redemption certificate under this subsection; or
112+ (3) (i) On receipt of the items stated in paragraph (2) of this subsection, 10
113+the Department shall post notice on its website that application has been made to redeem 11
114+or extinguish the ground rent. 12
118115
119- 2. The last payment for ground rent was made to the ground
120-lease holder identified in the affidavit and sent to the same address where the notice
121-required under subsection (b) of this section was sent.
116+ (ii) The notice shall remain posted for at least 90 days. 13
122117
123- (5) [No earlier than 90 days after the application has been posted as
124-provided in paragraph (3) of this subsection, a] A leasehold tenant seeking to extinguish
125-an irredeemable ground rent or to redeem a redeemable ground rent on abandoned or
126-distressed property that was acquired or is being acquired by the Mayor and City Council
127-of Baltimore shall provide to the Department:
118+ (4) Except as provided in paragraph (5) of this subsection, [no earlier than 14
119+90 days after the application has been posted as provided in paragraph (3) of this 15
120+subsection,] a leasehold tenant seeking to redeem a ground rent shall provide to the 16
121+Department: 17
128122
129- (i) Payment of up to 3 years’ past due ground rent to the extent
130-required under this section and § 8–806 of this subtitle, in a form satisfactory to the
131-Department; and
123+ (i) Payment of the redemption amount and up to 3 years’ past due 18
124+ground rent to the extent required under this section and § 8–806 of this subtitle, in a form 19
125+satisfactory to the Department; and 20
132126
133- (ii) An affidavit made by the Commissioner of the Baltimore City
134-Department of Housing and Community Development or the Commissioner’s designee
135-certifying that:
127+ (ii) An affidavit made by the leasehold tenant, in the form adopted 21
128+by the Department, certifying that: 22
136129
137- 1. The property is abandoned property, as defined in §
138-21–17(a)(2) of the Public Local Laws of Baltimore City, or distressed property, as defined
139-in § 21–17(a)(3) of the Public Local Laws of Baltimore City;
130+ 1. The leasehold tenant has not received a bill for ground 23
131+rent due or other communication from the ground lease holder regarding the ground rent 24
132+during the 3 years immediately before the filing of the documentation required for the 25
133+issuance of a redemption certificate under this subsection; or 26
140134
141- 2. The property was acquired or is being acquired by the
142-Mayor and City Council of Baltimore City; and
143- Ch. 183 2023 LAWS OF MARYLAND
135+ 2. The last payment for ground rent was made to the ground 27
136+lease holder identified in the affidavit and sent to the same address where the notice 28
137+required under subsection (b) of this section was sent. 29
144138
145-– 4 –
146- 3. The existence of the ground rent is an impediment to
147-redevelopment of the site.
139+ (5) [No earlier than 90 days after the application has been posted as 30
140+provided in paragraph (3) of this subsection, a] A leasehold tenant seeking to extinguish 31
141+an irredeemable ground rent or to redeem a redeemable ground rent on abandoned or 32
142+distressed property that was acquired or is being acquired by the Mayor and City Council 33
143+of Baltimore shall provide to the Department: 34
144+ 4 HOUSE BILL 93
148145
149- (6) At any time, the leasehold tenant may submit to the Department notice
150-that the leasehold tenant is no longer seeking redemption or extinguishment under this
151-subsection.
152146
153- (7) [Upon receipt of the documentation, fees, and, where applicable, the
154-redemption amount and 3 years’ past due ground rent to the extent required under this
155-section and § 8–806 of this subtitle, the] THE Department shall issue to [the] A leasehold
156-tenant a ground rent redemption certificate or a ground rent extinguishment certificate, as
157-appropriate, WHEN:
147+ (i) Payment of up to 3 years’ past due ground rent to the extent 1
148+required under this section and § 8–806 of this subtitle, in a form satisfactory to the 2
149+Department; and 3
158150
159- (I) NOTICE THAT APPLICATI ON HAS BEEN MADE TO REDEEM
160-OR EXTINGUISH THE GROUND RENT HAS BEEN POSTED ON THE DEPARTMENT ’S
161-WEBSITE FOR AT LEAST 90 DAYS; AND
151+ (ii) An affidavit made by the Commissioner of the Baltimore City 4
152+Department of Housing and Community Development or the Commissioner’s designee 5
153+certifying that: 6
162154
163- (II) THE DEPARTMENT HAS RECEIV ED THE DOCUMENTATION ,
164-FEES, AND, WHERE APPLICABLE , THE REDEMPTION AMOUN T AND 3 YEARS’ PAST
165-DUE GROUND RENT TO T HE EXTENT REQUIRED U NDER THIS SECTI ON AND § 8–806
166-OF THIS SUBTITLE .
155+ 1. The property is abandoned property, as defined in § 7
156+21–17(a)(2) of the Public Local Laws of Baltimore City, or distressed property, as defined 8
157+in § 21–17(a)(3) of the Public Local Laws of Baltimore City; 9
167158
168- (8) The redemption or extinguishment of the ground rent is effective to
169-conclusively divest the ground lease holder of the reversion and vest the reversion in the
170-leasehold tenant, and eliminate all right, title, or interest of the ground lease holder, any
171-lien of a creditor of the ground lease holder, and any person claiming by, through, or under
172-the ground lease holder when the leasehold tenant records the certificate in the land
173-records of the county in which the property is located.
159+ 2. The property was acquired or is being acquired by the 10
160+Mayor and City Council of Baltimore City; and 11
174161
175- (9) The ground lease holder, any creditor of the ground lease holder, or any
176-other person claiming by, through, or under the ground lease holder may file a claim with
177-the Department in order to collect all, or any portion of, where applicable, the redemption
178-amount and 3 years’ past due ground rent to the extent required under this section and §
179-8–806 of this subtitle, without interest, by providing to the Department:
162+ 3. The existence of the ground rent is an impediment to 12
163+redevelopment of the site. 13
180164
181- (i) Documentation satisfactory to the Department of the claimant’s
182-interest; and
165+ (6) At any time, the leasehold tenant may submit to the Department notice 14
166+that the leasehold tenant is no longer seeking redemption or extinguishment under this 15
167+subsection. 16
183168
184- (ii) Payment of a $20 fee, and any expediting fee required under §
185-1–203 of the Corporations and Associations Article.
169+ (7) [Upon receipt of the documentation, fees, and, where applicable, the 17
170+redemption amount and 3 years’ past due ground rent to the extent required under this 18
171+section and § 8–806 of this subtitle, the] THE Department shall issue to [the] A leasehold 19
172+tenant a ground rent redemption certificate or a ground rent extinguishment certificate, as 20
173+appropriate, WHEN: 21
186174
187- (10) (i) A ground lease holder whose ground rent has been extinguished
188-may file a claim with the Baltimore City Director of Finance to collect an amount equal to
189-the annual ground rent reserved multiplied by 16.66, which is capitalization at 6 percent,
190-by providing to the Director: WES MOORE, Governor Ch. 183
175+ (I) NOTICE THAT APPLICATI ON HAS BEEN MADE TO REDEEM 22
176+OR EXTINGUISH THE GROUND RENT HAS BEEN POSTED ON THE DEPARTMENT ’S 23
177+WEBSITE FOR AT LEAST 90 DAYS; AND 24
191178
192-– 5 –
179+ (II) THE DEPARTMENT HAS RECEIV ED THE DOCUMENTATION , 25
180+FEES, AND, WHERE APPLICABLE , THE REDEMPTION AMOUN T AND 3 YEARS’ PAST 26
181+DUE GROUND RENT TO T HE EXTENT REQUIRED U NDER THIS SECTI ON AND § 8–806 27
182+OF THIS SUBTITLE . 28
193183
194- 1. Proof of payment to the ground lease holder by the
195-Department of past due ground rent under paragraph (9) of this subsection; and
184+ (8) The redemption or extinguishment of the ground rent is effective to 29
185+conclusively divest the ground lease holder of the reversion and vest the reversion in the 30
186+leasehold tenant, and eliminate all right, title, or interest of the ground lease holder, any 31
187+lien of a creditor of the ground lease holder, and any person claiming by, through, or under 32
188+the ground lease holder when the leasehold tenant records the certificate in the land 33
189+records of the county in which the property is located. 34
196190
197- 2. Payment of a $20 fee.
191+ (9) The ground lease holder, any creditor of the ground lease holder, or any 35
192+other person claiming by, through, or under the ground lease holder may file a claim with 36 HOUSE BILL 93 5
198193
199- (ii) A ground lease holder of abandoned or distressed property
200-acquired by the Mayor and City Council of Baltimore City whose ground rent has been
201-redeemed may file a claim with the Baltimore City Director of Finance to collect the
202-redemption amount, by providing to the Director:
203194
204- 1. Proof of payment to the ground lease holder by the
205-Department of past due ground rent under paragraph (9) of this subsection; and
195+the Department in order to collect all, or any portion of, where applicable, the redemption 1
196+amount and 3 years’ past due ground rent to the extent required under this section and § 2
197+8–806 of this subtitle, without interest, by providing to the Department: 3
206198
207- 2. Payment of a $20 fee.
199+ (i) Documentation satisfactory to the Department of the claimant’s 4
200+interest; and 5
208201
209- (11) (i) In the event of a dispute regarding the extinguishment amount
210-as calculated under paragraph (10)(i) of this subsection, the ground lease holder may refuse
211-payment from the Baltimore City Director of Finance and file an appeal regarding the
212-valuation in the Circuit Court of Baltimore City.
202+ (ii) Payment of a $20 fee, and any expediting fee required under § 6
203+1–203 of the Corporations and Associations Article. 7
213204
214- (ii) In an appeal, the ground lease holder is entitled to receive the
215-fair market value of the ground lease holder’s interest in the property at the time of the
216-extinguishment.
205+ (10) (i) A ground lease holder whose ground rent has been extinguished 8
206+may file a claim with the Baltimore City Director of Finance to collect an amount equal to 9
207+the annual ground rent reserved multiplied by 16.66, which is capitalization at 6 percent, 10
208+by providing to the Director: 11
217209
218- (12) In the event of a dispute regarding the payment by the Department to
219-any person of all or any portion of the collected redemption amount and up to 3 years’ past
220-due ground rent to the extent required by this section and § 8–806 of this subtitle, the
221-Department may:
210+ 1. Proof of payment to the ground lease holder by the 12
211+Department of past due ground rent under paragraph (9) of this subsection; and 13
222212
223- (i) File an interpleader action in the circuit court of the county
224-where the property is located; or
213+ 2. Payment of a $20 fee. 14
225214
226- (ii) Reimburse the ground lease holder from the fund established in
227-§ 1–203.3 of the Corporations and Associations Article.
215+ (ii) A ground lease holder of abandoned or distressed property 15
216+acquired by the Mayor and City Council of Baltimore City whose ground rent has been 16
217+redeemed may file a claim with the Baltimore City Director of Finance to collect the 17
218+redemption amount, by providing to the Director: 18
228219
229- (13) The Department is not liable for any sum received by the Department
230-that exceeds the sum of:
220+ 1. Proof of payment to the ground lease holder by the 19
221+Department of past due ground rent under paragraph (9) of this subsection; and 20
231222
232- (i) The redemption amount; and
223+ 2. Payment of a $20 fee. 21
233224
234- (ii) Up to 3 years’ past due ground rent to the extent required by this
235-section and § 8–806 of this subtitle.
225+ (11) (i) In the event of a dispute regarding the extinguishment amount 22
226+as calculated under paragraph (10)(i) of this subsection, the ground lease holder may refuse 23
227+payment from the Baltimore City Director of Finance and file an appeal regarding the 24
228+valuation in the Circuit Court of Baltimore City. 25
236229
237- (14) The Department shall credit all fees and funds collected under this
238-subsection to the fund established under § 1–203.3 of the Corporations and Associations Ch. 183 2023 LAWS OF MARYLAND
230+ (ii) In an appeal, the ground lease holder is entitled to receive the 26
231+fair market value of the ground lease holder’s interest in the property at the time of the 27
232+extinguishment. 28
239233
240-– 6 –
241-Article. Redemption and extinguishment amounts received shall be held in a ground rent
242-redemption and ground rent extinguishment account in that fund.
234+ (12) In the event of a dispute regarding the payment by the Department to 29
235+any person of all or any portion of the collected redemption amount and up to 3 years’ past 30
236+due ground rent to the extent required by this section and § 8–806 of this subtitle, the 31
237+Department may: 32
243238
244- (15) The Department shall maintain a list of properties for which ground
245-rents have been redeemed or extinguished under this subsection.
239+ (i) File an interpleader action in the circuit court of the county 33
240+where the property is located; or 34
241+ 6 HOUSE BILL 93
246242
247- (16) The Department shall adopt regulations to carry out the provisions of
248-this subsection.
249243
250- (17) Any redemption or extinguishment funds not collected by a ground
251-lease holder under this subsection within 20 years after the date of the payment to the
252-Department by the leasehold tenant shall escheat to the State. The Department shall
253-annually transfer any funds that remain uncollected after 20 years to the State General
254-Fund at the end of each fiscal year.
244+ (ii) Reimburse the ground lease holder from the fund established in 1
245+§ 1–203.3 of the Corporations and Associations Article. 2
255246
256- SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
257-October 1, 2023.
247+ (13) The Department is not liable for any sum received by the Department 3
248+that exceeds the sum of: 4
258249
259-Approved by the Governor, April 24, 2023.
250+ (i) The redemption amount; and 5
251+
252+ (ii) Up to 3 years’ past due ground rent to the extent required by this 6
253+section and § 8–806 of this subtitle. 7
254+
255+ (14) The Department shall credit all fees and funds collected under this 8
256+subsection to the fund established under § 1–203.3 of the Corporations and Associations 9
257+Article. Redemption and extinguishment amounts received shall be held in a ground rent 10
258+redemption and ground rent extinguishment account in that fund. 11
259+
260+ (15) The Department shall maintain a list of properties for which ground 12
261+rents have been redeemed or extinguished under this subsection. 13
262+
263+ (16) The Department shall adopt regulations to carry out the provisions of 14
264+this subsection. 15
265+
266+ (17) Any redemption or extinguishment funds not collected by a ground 16
267+lease holder under this subsection within 20 years after the date of the payment to the 17
268+Department by the leasehold tenant shall escheat to the State. The Department shall 18
269+annually transfer any funds that remain uncollected after 20 years to the State General 19
270+Fund at the end of each fiscal year. 20
271+
272+ SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
273+October 1, 2023. 22
274+
275+
276+
277+Approved:
278+________________________________________________________________________________
279+ Governor.
280+________________________________________________________________________________
281+ Speaker of the House of Delegates.
282+________________________________________________________________________________
283+ President of the Senate.