WES MOORE, Governor Ch. 181
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Chapter 181
(Senate Bill 193)
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.
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(b) A GROUND LEASE OR AN A MENDMENT IS NOT REGI STERED 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 COSTS , OR OTHER EXPENSES RE LATED
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 ATTEMPTED TO COLL ECT GROUND RENT PAYM ENT,
LATE FEES, INTEREST, COLLECTION COSTS , OR OTHER EXPENSES RE LATED TO THE
GROUND LEASE IN VIOLATI ON OF SUBSECTION (A)(1) OF THIS SECTION MAY SUBMIT
TO THE DEPARTMENT AN AFFIDAV IT STATING THE FACTU AL BASIS FOR THE
LEASEHOLD TENANT ’S BELIEF AND ANY DOC UMENTS IN SUPPORT OF THE
AFFIDAVIT.
(2) ON RECEIPT OF AN AFFI DAVIT AND ANY SUPP ORTING
DOCUMENTS SUBMITTED UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE
DEPARTMENT SHALL SEND NOTICE TO THE GROUND LEASE HOLDER THAT IS THE
SUBJECT OF THE SUBMI SSION STATING THAT :
(I) THE DEPARTMENT HAS RECEIV ED A SUBMISSION
ALLEGING THAT THE GR OUND LEASE HOLDER HAS VIOLAT ED SUBSECTION (A)(1) OF
THIS SECTION; AND
(II) THE RELEVANT GROUND L EASE REGISTRATION OR
AMENDMENT SUBMITTED TO THE DEPARTMENT BY THE GRO UND LEASE HOLDER
FOR THE PROPERTY IN QUESTION MAY BE VOID ED IN THE DEPARTMENT ’S RECORDS
UNLESS, WITHIN 45 DAYS AFTER THE NOTIC E, THE GROUND LEASE HOL DER SUBMITS
TO THE DEPARTMENT A COUNTER –AFFIDAVIT AND ANY DO CUMENTS IN SUPPORT O F WES MOORE, Governor Ch. 181
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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 AFFIDAVI T
DID NOT VIOLATE SUBS ECTION (A)(1) OF THIS SECTION AND THE FACTUAL BASIS
FOR THAT BELIEF .
(3) NOTICE SENT TO THE GR OUND LEASE HOLDER UN DER
PARAGRAPH (2) OF THIS SUBSECTION S HALL:
(I) BE SENT BY CERTIFIED MAIL, 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 TEN ANT 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 PROM PTLY SEND TO ALL PER SONS WHO
SUBMITTED AFFIDAVITS AND COUNTER –AFFIDAVITS NOTICE OF THE DECISI ON.
(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 SUBSECTION (A)(1) OF THIS SECTION; AND
2. MAY VOID A RELEVANT G ROUND LEASE
REGISTRATION OR AMEN DMENT IN THE DEPARTMENT ’S RECORDS UNLESS , WITHIN
45 DAYS AFTER THE DATE OF THE NOTICE, THE GROUND LEASE HOLDER FI LES AN
ACTION IN THE CIRCUI T COURT UNDER SUBSEC TION (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 LEA SE HOLDER DID NOT VI OLATE
SUBSECTION (A)(1) OF THIS SECTION , THE DEPARTMENT SHALL PROM PTLY 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 SUBSECTI ON
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 CO URT UNDER SUBSECTION (E) OF THIS
SECTION.
(E) (1) FOLLOWING NOTICE OF A FINAL DECISION BY TH E DEPARTMENT
MADE UNDER THIS SECT ION, A GROUND LEASE HOLDE R OR A LEASEHOLD TEN ANT
MAY FILE AN ACTION I N THE CIRCUIT COURT .
(2) AN ACTION FILED UNDER THIS SUBSECTION SHAL L 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 RESID ES; 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 SUBJE CT TO THE
GROUND LEASE IS LOCA TED.
(3) AN ACTION FILED UNDER THIS SUBSECTION SHAL L BE HEARD DE
NOVO BY THE CIRCUIT COURT. WES MOORE, Governor Ch. 181
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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 A CTION FILED UNDER TH IS
SUBSECTION.
(5) THE DEPARTMENT MAY N OT BE JOINED AS A PA RTY IN AN ACTION
UNDER THIS SUBSECTIO N.
(F) (1) IF A COURT DETERMINES THAT A GROUND LEASE HOLDER HAS
VIOLATED SUBSECTION (A)(1) OF THIS SECTION:
(I) THE COURT SHALL ENTER AN ORDER REQUIRING T HE
DEPARTMENT TO VOID TH E 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 PROM PTLY VOID THE
REGISTRATION OR AMEN DMENT AND ENTER A NO TATION IN THE DEPARTMENT ’S
RECORDS THAT THE REL EVANT GROUND LEASE R EGISTRATION OR AMEND MENT IS
VOID UNDER A COURT O RDER.
(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 TH E
COLLECTION OR ATTEMP TED COLLECTION THAT WAS THE SUBJECT OF T HE
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 SHAL L MAIL A COPY OF THE
COMPLAINT TO THE DEPARTMENT WITHIN 45 DAYS AFTER THE DATE OF NOTICE OF
DECISION ISSUED BY T HE DEPARTMENT .
(2) IF THE DEPARTMENT DOES NOT R ECEIVE A COPY OF A
COMPLAINT FILED UNDER SUBSECTION (E) OF THIS SECTION WITH IN 45 DAYS AFTER
THE DATE OF THE NOTI CE OF DECISION ISSUE D BY THE DEPARTMENT , THE
DEPARTMENT SHALL TAKE ACTION IN ACCORDANCE WITH ITS FINAL DECIS ION.
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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 C ONSIDERED
REGISTERED.
(I) THE DEPARTMENT SHALL INCL UDE NOTICE ON ALL GR OUND RENT
FORMS AND ON ITS WEB SITE IN SUBSTANTIALL Y THE FOLLOWING FORM :
“NOTICE REQUIRED BY LA W: A GROUND RENT LEASE HO LDER MAY NOT
COLLECT OR ATTEMPT T O COLLECT GROUND REN T, LATE FEES, INTEREST,
COLLECTION COSTS , OR ANY OTHER EXPENSE S RELATED TO A GROUN D LEASE THAT
IS NOT REGISTERED AN D POSTED ON THE DEPARTMENT ’S ONLINE GR OUND RENT
REGISTRY.”.
(J) (1) THE DEPARTMENT SHALL DEVE LOP A FORM AFFIDAVIT AND A
FORM COUNTER –AFFIDAVIT THAT SHALL BE USED BY A LEASEHO LD TENANT AND
GROUND LEASE HOLDER , RESPECTIVELY , FOR SUBMISSIONS MADE TO THE
DEPARTMENT UNDER SUBS ECTION (B) OF THIS SECTION.
(2) THE FORM AFFIDAVIT AN D FORM COUNTER –AFFIDAVIT
DEVELOPED BY THE DEPARTMENT SHALL INCL UDE AN ACKNOWLEDGMEN T THAT
THE FORM IS BEING SI GNED UNDER PENALTY O F PERJURY.
(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.