EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0193*
SENATE BILL 193
N1 3lr1199
CF HB 92
By: Senators Sydnor and Hayes
Introduced and read first time: January 20, 2023
Assigned to: Judicial Proceedings
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 SENATE BILL 193
(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 REGI STERED UNT IL 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 COSTS , OR OTHER EXPENSES RE LATED 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 ATTEMPTED TO COLL ECT GROUND RENT PAYM ENT, 21
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE 22
GROUND LEASE IN VIOL ATION OF SUBSECTION (A)(1) OF THIS SECTION MAY SUBMIT 23
TO THE DEPARTMENT AN AFFIDAV IT STATING THE FACTU AL BASIS FOR THE 24
LEASEHOLD TENANT ’S BELIEF AND ANY DOC UMENTS IN SUPPORT OF THE 25
AFFIDAVIT. 26
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPPOR TING 27
DOCUMENTS SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE 28
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE 29
SUBJECT OF THE SUBMI SSION STATING THAT : 30
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION 31
ALLEGING THAT THE GR OUND LEASE HOLDER HA S VIOLATED SUBSECTIO N (A)(1) OF 32
THIS SECTION; AND 33 SENATE BILL 193 3
(II) THE RELEVANT GROUND L EASE REGISTRATION OR 1
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER 2
FOR THE PROPERTY IN QUESTION MAY BE VOID ED IN THE DEPARTMENT ’S RECORDS 3
UNLESS, WITHIN 45 DAYS AFTER THE NOTIC E, THE GROUND LEASE HOL DER SUBMITS 4
TO THE DEPARTMENT A COUNTER –AFFIDAVIT AND ANY DO CUMENTS IN SUPPORT O F 5
THE COUNTER –AFFIDAVIT THAT SETS FORTH THE GROUND LEA SE HOLDER’S BELIEF 6
THAT ANY COLLECTION OR ATTEMPTED COLLECT ION DESCRIBED IN THE AFFIDAVIT 7
DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION AND THE FACTUAL BASIS 8
FOR THAT BELIEF . 9
(3) NOTICE SENT TO TH E GROUND LEASE HOLDE R UNDER 10
PARAGRAPH (2) OF THIS SUBSECTION S HALL: 11
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 12
REQUESTED , AND BY FIRST –CLASS MAIL TO THE AD DRESS PROVIDED IN TH E 13
GROUND LEASE HOLDER ’S GROUND LEASE REGIS TRATION OR AMENDMENT , OR TO 14
ANY OTHER ADDRESS USED B Y THE GROUND LEASE H OLDER KNOWN TO THE 15
DEPARTMENT ; AND 16
(II) INCLUDE A COPY OF THE AFFIDAVIT AND ANY SU PPORTING 17
DOCUMENTS SUBMITTED BY THE LEASEHOLD TEN ANT TO THE DEPARTMENT . 18
(C) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBM ITTED 19
COUNTER–AFFIDAVITS, AND ANY SUPPORTING D OCUMENTS, THE DEPARTMENT 20
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER VIOLATED SU BSECTION 21
(A)(1) OF THIS SECTION, THE DEPARTMENT MAY MAKE A FINAL DECISION. 22
(2) FOLLOWING A DECISION MADE UNDER PARAGRAPH (1) OF THIS 23
SUBSECTION, THE DEPARTMENT SHALL PROM PTLY SEND TO ALL PER SONS WHO 24
SUBMITTED AFFIDAVITS AND COUNTER –AFFIDAVITS NOTICE OF THE DECISION. 25
(3) NOTICE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION 26
SHALL: 27
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 28
REQUESTED , AND BY FIRST–CLASS MAIL; AND 29
(II) STATE THAT THE DEPARTMENT : 30
1. REASONABLY BELIEVES T HAT THE GROUND LEASE 31
HOLDER HAS VIOLATED SUBSECTION (A)(1) OF THIS SECTION; AND 32
4 SENATE BILL 193
2. MAY VOID A RELEVANT G ROUND LEASE 1
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS , WITHIN 2
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOL DER FILES AN 3
ACTION IN THE CIRCUI T COURT UNDER SUBSEC TION (E) OF THIS SECTION. 4
(D) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 5
COUNTER–AFFIDAVITS, AND SUPPORTING DOCUM ENTS, THE DEPARTMENT 6
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER DID NOT VIO LATE 7
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROM PTLY SEND 8
TO ALL PERSONS WHO S UBMITTED AFFIDAVITS OR TIMELY FILED 9
COUNTER–AFFIDAVITS NOTICE OF TH E DECISION. 10
(2) NOTICE REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION 11
SHALL: 12
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 13
REQUESTED , AND BY FIRST–CLASS MAIL; AND 14
(II) STATE THAT: 15
1. THE DEPARTMENT REASONABLY BELIEVES THAT THE 16
GROUND LEASE HOLDER DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION ; 17
AND 18
2. THE DEPARTMENT WILL TAKE NO FURTHER ACTION 19
UNLESS, WITHIN 45 DAYS AFTER THE DATE OF THE NOTICE , THE LEASEHOLD 20
TENANT FILES AN ACTI ON IN THE CIRCUIT CO URT UNDER SU BSECTION (E) OF THIS 21
SECTION. 22
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY TH E DEPARTMENT 23
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDE R OR A LEASEHOLD TEN ANT 24
MAY FILE AN ACTION I N THE CIRCUIT COURT . 25
(2) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE FILED: 26
(I) WITHIN 45 DAYS AFTER THE DATE OF NOTICE BY THE 27
DEPARTMENT ; AND 28
(II) 1. IN THE CIRCUIT COURT FOR THE COUNTY IN WH ICH 29
THE PETITIONER RESID ES; OR 30
SENATE BILL 193 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 SUBJE CT TO THE 2
GROUND LEASE IS LOCA TED. 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 SENT A NOTICE UN DER SUBSECTION (C) 6
OR (D) OF THIS SECTION SHAL L BE A PARTY TO AN A CTION FILED UNDER TH IS 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 SUBSECTION (A)(1) OF THIS SECTION: 12
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE 13
DEPARTMENT TO VOID TH E APPROPRIATE GROUND LEASE REGISTRATION O R 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 PROM PTLY VOID THE 18
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S 19
RECORDS THAT THE REL EVANT GROUND LEASE R EGISTRATION OR AMEND MENT IS 20
VOID UNDER A COURT O RDER. 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 THA T THE 24
COLLECTION OR ATTEMP TED COLLECTION THAT WAS THE SUBJECT OF T HE 25
COMPLAINT WAS NOT UNLAWFUL; 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 SHAL L MAIL A COPY OF THE 30
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF 31
DECISION ISSUED BY T HE DEPARTMENT . 32 6 SENATE BILL 193
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A 1
COMPLAINT FILED UNDE R SUBSECTION (E) OF THIS SECTION WITH IN 45 DAYS AFTER 2
THE DATE OF THE NOTI CE OF DECISION ISSUE D BY THE DEPARTMENT , THE 3
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECIS ION. 4
(H) A GROUND LEASE REGISTR ATION OR AMENDMENT T HAT HAS BEEN 5
VOIDED BY THE DEPARTMENT UNDER THIS SECTION MAY NOT BE C ONSIDERED 6
REGISTERED. 7
(I) THE DEPARTMENT SHALL INCLUDE NOTICE ON AL L GROUND RENT 8
FORMS AND ON ITS WEB SITE IN SUBSTANTIALL Y THE FOLLOWING FORM : 9
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HO LDER MAY NOT 10
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST, 11
COLLECTION COSTS , OR ANY OTHER EXP ENSES RELATED TO A G ROUND LEASE THAT 12
IS NOT REGISTERED AN D POSTED ON THE DEPARTMENT ’S ONLINE GROUND RENT 13
REGISTRY.”. 14
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A 15
FORM COUNTER –AFFIDAVIT THAT SHALL BE USED BY A LEASEHO LD TENANT AND 16
GROUND L EASE HOLDER , RESPECTIVELY , FOR SUBMISSIONS MADE TO THE 17
DEPARTMENT UNDER SUBS ECTION (B) OF THIS SECTION. 18
(2) THE FORM AFFIDAVIT AN D FORM COUNTER –AFFIDAVIT 19
DEVELOPED BY THE DEPARTMENT SHALL INCL UDE AN ACKNOWLEDGMEN T THAT 20
THE FORM IS BEING SI GNED UNDER PEN ALTY OF PERJURY . 21
(K) THE DEPARTMENT MAY NOT CH ARGE A FEE TO CARRY OUT THIS 22
SECTION. 23
(L) THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS 24
SECTION. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
October 1, 2023. 27