EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[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.
*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
Committee Report: Favorable
Senate action: Adopted
Read second time: February 24, 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
Article – Real Property 22 2 SENATE BILL 193
8–703. 1
(a) (1) The Department shall maintain an online registry of all properties that 2
are subject to ground leases. 3
(2) The online registry shall: 4
(i) Identify properties for which a renewal notice to preserve the 5
irredeemability of an irredeemable ground lease has been filed; and 6
(ii) Include a clear notation of the expiration date for each renewal 7
notice. 8
(b) A GROUND LEASE OR AN A MENDMENT IS NOT REGI STERED UNTIL THE 9
GROUND LEASE OR AMEN DMENT IS POSTED ON T HE ONLINE REGISTRY . 10
(C) The Department is not responsible for the completeness or accuracy of the 11
contents of the online registry. 12
8–707. 13
(A) If a ground lease is not registered in accordance with this subtitle, the ground 14
lease holder may not: 15
(1) Collect OR ATTEMPT TO COLLEC T any ground rent payments [due 16
under], LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED 17
TO the ground lease; 18
(2) Bring a civil action against the leasehold tenant to enforce any rights 19
the ground lease holder may have under the ground lease; or 20
(3) Bring an action against the leasehold tenant under Subtitle 8 of this 21
title. 22
(B) (1) A LEASEHOLD TENANT WHO BELIEVES THAT A GROU ND LEASE 23
HOLDER HAS COLLECTED OR ATTEMPTED TO COLL ECT GROUND RENT PAYM ENT, 24
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE 25
GROUND LEASE IN VIOL ATION OF SUBSECTION (A)(1) OF THIS SECTION MAY SUBMIT 26
TO THE DEPARTMENT AN AFFIDAV IT STATING THE FACTU AL BASIS FOR THE 27
LEASEHOLD TENANT ’S BELIEF AND ANY DOC UMENTS IN SUPPORT OF THE 28
AFFIDAVIT. 29
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPPOR TING 30
DOCUMENTS SUBMITT ED UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE 31 SENATE BILL 193 3
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE 1
SUBJECT OF THE SUBMI SSION STATING THAT : 2
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION 3
ALLEGING THAT THE GR OUND LEASE HOLDER HA S VIOLATED SUBSECTION (A)(1) OF 4
THIS SECTION; AND 5
(II) THE RELEVANT GROUND L EASE REGISTRATION OR 6
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER 7
FOR THE PROPERTY IN QUESTION MAY BE VOID ED IN THE DEPARTMENT ’S RECORDS 8
UNLESS, WITHIN 45 DAYS AFTER TH E NOTICE, THE GROUND LEASE HOL DER SUBMITS 9
TO THE DEPARTMENT A COUNTER –AFFIDAVIT AND ANY DO CUMENTS IN SUPPORT O F 10
THE COUNTER –AFFIDAVIT THAT SETS FORTH THE GROUND LEA SE HOLDER’S BELIEF 11
THAT ANY COLLECTION OR ATTEMPTED COLLECT ION DESCRIBED IN THE AFFIDAVIT 12
DID NOT VIOLATE SUBSEC TION (A)(1) OF THIS SECTION AND THE FACTUAL BASIS 13
FOR THAT BELIEF . 14
(3) NOTICE SENT TO THE GR OUND LEASE HOLDER UN DER 15
PARAGRAPH (2) OF THIS SUBSECTION S HALL: 16
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 17
REQUESTED , AND BY FIRST–CLASS MAIL TO THE AD DRESS PROVIDED IN TH E 18
GROUND LEASE HOLDER ’S GROUND LEASE REGIS TRATION OR AMENDMENT , OR TO 19
ANY OTHER ADDRESS US ED BY THE GROUND LEA SE HOLDER KNOWN TO T HE 20
DEPARTMENT ; AND 21
(II) INCLUDE A COPY OF THE AFFIDAVIT AND ANY SU PPORTING 22
DOCUMENTS SUBMITTED B Y THE LEASEHOLD TENA NT TO THE DEPARTMENT . 23
(C) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 24
COUNTER–AFFIDAVITS, AND ANY SUPPORTING D OCUMENTS, THE DEPARTMENT 25
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER VIOLATED SU BSECTION 26
(A)(1) OF THIS SECTION, THE DEPARTMENT MAY MAKE A FINAL DECISION. 27
(2) FOLLOWING A DECISION MADE UNDER PARAGRAPH (1) OF THIS 28
SUBSECTION, THE DEPARTMENT SHALL PROM PTLY SEND TO ALL PER SONS WHO 29
SUBMITTED AFFIDAVITS AND COUNTER –AFFIDAVITS NOTICE OF THE DECISION. 30
(3) NOTICE REQUIRED UNDER PARAGRAPH (2) OF THIS SUBSECTION 31
SHALL: 32
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 33
REQUESTED , AND BY FIRST–CLASS MAIL; AND 34 4 SENATE BILL 193
(II) STATE THAT THE DEPARTMENT : 1
1. REASONABLY BELIEVES T HAT THE GROUND LEASE 2
HOLDER HAS VIOLATED SU BSECTION (A)(1) OF THIS SECTION; AND 3
2. MAY VOID A RELEVANT G ROUND LEASE 4
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS , WITHIN 5
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOL DER FILES AN 6
ACTION IN THE CIR CUIT COURT UNDER SUB SECTION (E) OF THIS SECTION. 7
(D) (1) IF, AFTER REVIEWING ANY AFFIDAVITS, TIMELY SUBMITTED 8
COUNTER–AFFIDAVITS, AND SUPPORTING DOCUM ENTS, THE DEPARTMENT 9
REASONABLY BELIEVES THAT THE GROUND LEAS E HOLDER DID NOT VIO LATE 10
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROM PTLY SEND 11
TO ALL PERSONS WHO S UBMITTED AFFIDAVITS OR TIMELY FILED 12
COUNTER–AFFIDAVITS NOTICE OF THE DECISION. 13
(2) NOTICE REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION 14
SHALL: 15
(I) BE SENT BY CERTIFIED MAIL, RETURN RECEIPT 16
REQUESTED , AND BY FIRST–CLASS MAIL; AND 17
(II) STATE THAT: 18
1. THE DEPARTMENT REASONABLY BELIEVES THAT THE 19
GROUND LEASE HOLDER DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION ; 20
AND 21
2. THE DEPARTMENT WILL TAKE NO FURTHER ACTION 22
UNLESS, WITHIN 45 DAYS AFTER THE DATE OF THE NOTICE , THE LEASEHOLD 23
TENANT FILES AN ACTI ON IN THE CIRCUIT CO URT UNDER SUBSECTION (E) OF THIS 24
SECTION. 25
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY TH E DEPARTMEN T 26
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDE R OR A LEASEHOLD TEN ANT 27
MAY FILE AN ACTION I N THE CIRCUIT COURT . 28
(2) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE FILED: 29
(I) WITHIN 45 DAYS AFTER THE DATE OF NOTICE BY THE 30
DEPARTMENT ; AND 31 SENATE BILL 193 5
(II) 1. IN THE CIRCUIT COURT FOR THE COUNTY IN WH ICH 1
THE PETITIONER RESID ES; OR 2
2. IF THE PERSON DOES NO T RESIDE IN THE STATE, IN 3
THE CIRCUIT COURT FO R THE COUNTY IN WHIC H THE PROPERTY SUBJE CT TO THE 4
GROUND LEASE IS LOCA TED. 5
(3) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE HEARD DE 6
NOVO BY THE CIRCUIT COURT. 7
(4) EACH PERSON WHO WAS S ENT A NOTICE UNDER S UBSECTION (C) 8
OR (D) OF THIS SECTION SHAL L BE A PARTY TO AN A CTION FILED UNDER TH IS 9
SUBSECTION. 10
(5) THE DEPARTMENT MAY N OT BE JOINED AS A PA RTY IN AN ACTION 11
UNDER THIS SUBSECTIO N. 12
(F) (1) IF A COURT DETERMINES THAT A GROUND LEASE HOLDER HAS 13
VIOLATED SUBSECTION (A)(1) OF THIS SECTION: 14
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE 15
DEPARTMENT TO VOID TH E APPROPRIATE GROUND LEASE REGISTR ATION OR 16
AMENDMENT IN THE DEPARTMENT ’S RECORDS; 17
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 18
ORDER TO THE DEPARTMENT ; AND 19
(III) THE DEPARTMENT SHALL PROM PTLY VOID THE 20
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S 21
RECORDS THAT THE REL EVANT GROUND LEASE R EGISTRATION OR AMEND MENT IS 22
VOID UNDER A COURT O RDER. 23
(2) IF A COURT DETERMINES THAT THE GROUND LEAS E HOLDER HAS 24
NOT VIOLATED SUBSECT ION (A)(1) OF THIS SECTION: 25
(I) THE COURT SHALL ENTER AN ORDER FINDING THA T THE 26
COLLECTION OR ATTEMP TED COLLECTION THAT WAS THE SUBJECT OF T HE 27
COMPLAINT WAS NOT UN LAWFUL; AND 28
(II) THE PREVAILING PARTY SHALL PROVIDE A COPY OF THE 29
ORDER TO THE DEPARTMENT . 30
6 SENATE BILL 193
(G) (1) A GROUND LEASE HOLDER OR LEASEHOLD TENANT WHO FILES AN 1
ACTION UNDER SUBSECT ION (E) OF THIS SECTION SHAL L MAIL A COPY OF THE 2
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF 3
DECISION ISSUED B Y THE DEPARTMENT . 4
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A 5
COMPLAINT FILED UNDE R SUBSECTION (E) OF THIS SECTION WITH IN 45 DAYS AFTER 6
THE DATE OF THE NOTI CE OF DECISION ISSUE D BY THE DEPARTMENT , THE 7
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECISI ON. 8
(H) A GROUND LEASE REGISTR ATION OR AMENDMENT T HAT HAS BEEN 9
VOIDED BY THE DEPARTMENT UNDER THIS SECTION MAY NOT BE C ONSIDERED 10
REGISTERED. 11
(I) THE DEPARTMENT SHALL INCL UDE NOTICE ON ALL GR OUND RENT 12
FORMS AND ON ITS WEB SITE IN SUBSTANTIALLY THE FOLLO WING FORM: 13
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HO LDER MAY NOT 14
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST, 15
COLLECTION COSTS , OR ANY OTHER EXPENSE S RELATED TO A GROUN D LEASE THAT 16
IS NOT REGISTERED AN D POSTED ON THE DEPARTMENT ’S ONLINE GROUND RENT 17
REGISTRY.”. 18
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A 19
FORM COUNTER –AFFIDAVIT THAT SHALL BE USED BY A LEASEHO LD TENANT AND 20
GROUND LEASE HOLDER , RESPECTIVELY , FOR SUBMISSIONS MADE TO THE 21
DEPARTMENT UNDER SUBSECTION (B) OF THIS SECTION. 22
(2) THE FORM AFFIDAVIT AN D FORM COUNTER –AFFIDAVIT 23
DEVELOPED BY THE DEPARTMENT SHALL INCL UDE AN ACKNOWLEDGMEN T THAT 24
THE FORM IS BEING SI GNED UNDER PENALTY O F PERJURY. 25
(K) THE DEPARTMENT MAY NOT CH ARGE A FEE TO CA RRY OUT THIS 26
SECTION. 27
(L) THE DEPARTMENT MAY ADOPT REGULATIONS TO CARRY OUT THIS 28
SECTION. 29
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 30
October 1, 2023. 31