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.
Italics indicate opposite chamber/conference committee amendments.
*sb0194*
SENATE BILL 194
N1 (3lr1197)
ENROLLED BILL
— Judicial Proceedings/Environment and Transportation —
Introduced by Senators Sydnor and Hayes
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at __ ______________________ o’clock, ________M.
______________________________________________
President.
CHAPTER ______
AN ACT concerning 1
Ground Leases – Notices and Billing – Forms and Requirements 2
FOR the purpose of prohibiting a leasehold tenant of an unregistered ground lease from 3
being required to hold more than a certain amount of ground rent in escrow; 4
requiring a ground lease holder to mail certain notices and bills to a leasehold tenant 5
in a certain manner under certain circumstances and prohibiting the ground lease 6
holder from requiring the leasehold tenant to reimburse the ground lease holder for 7
the mailing expenses; requiring the State Department of Assessments and Taxation 8
to develop and make available on its website certain form notices and bills; requiring 9
a ground lease transferee to send notice of a ground lease transfer to the State 10
Department of Assessments and Taxation within a certain period of time; and 11
generally relating to ground leases. 12
BY renumbering 13
Article – Real Property 14 2 SENATE BILL 194
Section 8–801(b) through (f) 1
to be Section 8–801(c) through (g), respectively 2
Annotated Code of Maryland 3
(2015 Replacement Volume and 2022 Supplement) 4
BY repealing and reenacting, with amendments, 5
Article – Real Property 6
Section 8–707, 8–805(a) and (d)(1)(iii) and (v) and (3)(ii), 8–807(a), (c), and (d), 8–809, 7
and 8–810 8
Annotated Code of Maryland 9
(2015 Replacement Volume and 2022 Supplement) 10
BY repealing and reenacting, without amendments, 11
Article – Real Property 12
Section 8–801(a) 13
Annotated Code of Maryland 14
(2015 Replacement Volume and 2022 Supplement) 15
BY adding to 16
Article – Real Property 17
Section 8–801(b) and 8–801.1 18
Annotated Code of Maryland 19
(2015 Replacement Volume and 2022 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That Section(s) 8–801(b) through (f) of Article – Real Property of the Annotated Code of 22
Maryland be renumbered to be Section(s) 8–801(c) through (g), respectively. 23
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 24
as follows: 25
Article – Real Property 26
8–707. 27
If a ground lease is not registered in accordance with this [subtitle, the] SUBTITLE: 28
(1) THE ground lease holder may not: 29
[(1)] (I) Collect any ground rent payments due under the ground lease; 30
[(2)] (II) Bring a civil action against the leasehold tenant to enforce any 31
rights the ground lease holder may have under the ground lease; or 32
[(3)] (III) Bring an action against the leasehold tenant under Subtitle 8 of 33
this title; AND 34 SENATE BILL 194 3
(2) THE LEASEHOLD TENANT OF THE UNREGISTERED GROUND LEASE 1
MAY NOT BE REQUIRED TO HOLD MORE THAN 3 YEARS OF GROUND RENT IN ESCROW 2
FOR THE UNREGISTERED GROUND LEASE . 3
8–801. 4
(a) In this subtitle the following words have the meanings indicated. 5
(B) “DEPARTMENT ” MEANS THE STATE DEPARTMENT OF ASSESSMENTS 6
AND TAXATION. 7
8–801.1. 8
(A) THE GENERAL ASSEMBLY DECLARES THA T IT IS IN THE PUBLI C 9
INTEREST FOR GROUND RENTS TO BE REDEEMED . 10
(B) IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT T HE DEPARTMENT 11
USE ITS GROUND RENT REDEMPTION PROGRAM T O ASSIST IN THE REDE MPTION OF 12
GROUND RENTS . 13
8–805. 14
(a) (1) In this section the following words have the meanings indicated. 15
(2) [“Department” means the State Department of Assessments and 16
Taxation. 17
(3)] “Irredeemable ground rent” means a ground rent created under a 18
ground lease executed before April 9, 1884, that does not contain a provision allowing the 19
leasehold tenant to redeem the ground rent. 20
[(4)] (3) “Redeemable ground rent” means a ground rent that may be 21
redeemed in accordance with this section or redeemed or extinguished in accordance with 22
§ 8–804(f) of this subtitle. 23
(d) (1) To be effective and to be entitled to be recorded, the notice shall be 24
executed by the ground lease holder, acknowledged before a notary public, and contain 25
substantially the following information: 26
(iii) The name of every leasehold tenant as of the time the notice is 27
filed according to the land records or the records of the [State] Department [of Assessments 28
and Taxation]; 29
4 SENATE BILL 194
(v) The recording reference of every leasehold tenant’s leasehold 1
deed, as of the time the notice is filed, according to the land records or the records of the 2
[State] Department [of Assessments and Taxation]; 3
(3) The notice shall be indexed as “Notice of Intention to Preserve 4
Irredeemability”: 5
(ii) In the grantor indices of deeds under the name of every leasehold 6
tenant as of the time the notice is filed according to the land records or the records of the 7
[State] Department [of Assessments and Taxation]; and 8
8–807. 9
(a) For property subject to a ground lease in effect on or after July 1, 2007, a 10
ground lease holder may bring an action for possession for nonpayment of ground rent only: 11
(1) If the ground lease holder has the lawful right to claim possession for 12
nonpayment of ground rent; 13
(2) If the ground lease is registered with the [State] Department [of 14
Assessments and Taxation] under Subtitle 7 of this title; 15
(3) If the payment of ground rent is at least 6 months in arrears; and 16
(4) As provided under this section. 17
(c) (1) (I) No less than 60 days before filing an action for possession, the 18
ground lease holder shall send a notice, in the form required under paragraph (2) of this 19
subsection, to the leasehold tenant’s last known address AND TO THE PREMISES ADDRESS 20
as shown in the records of the [State] Department [of Assessments and Taxation, or other 21
place of business or residence if known,] by[: 22
(i) First–class mail;] FIRST–CLASS MAIL and 23
[(ii) Certified] CERTIFIED mail, return receipt requested. 24
(II) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS 25
AND THE PREMISES ADD RESS LISTED IN THE R ECORDS OF THE DEPARTMENT ARE 26
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY 27
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN 28
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY . 29
(III) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD 30
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED IN 31
PROVIDING NO TICE REQUIRED UNDER THIS SUBSECTION . 32 SENATE BILL 194 5
(2) The DEPARTMENT SHALL DEVE LOP AND MAKE AVAILAB LE ON ITS 1
WEBSITE A FORM NOTICE FOR US E BY A GROUND LEASE HOLDER THE FORM A 2
GROUND LEASE HOLDER MUST USE TO PROVIDE TO A LEAS EHOLD TENANT THE notice 3
required under paragraph (1) of this subsection [shall be in substantially the same form as 4
the notice contained on the Web site of the State Department of Assessments and 5
Taxation]. 6
(3) If authorized under the ground lease, a ground lease holder may be 7
reimbursed for reasonable late fees, interest, collection costs, and expenses not exceeding 8
$100, provided the outstanding amount due is paid after the notice sent under paragraph 9
(1) of this subsection and before a notice is sent under subsection (d) of this section. 10
(d) (1) (I) After notice has been sent under subsection (c) of this section and 11
no [less] FEWER than 30 days before filing an action for possession, the ground lease holder 12
shall send a notice, in the form required under paragraph (2) of this subsection, to the 13
leasehold tenant’s last known address AND TO THE PREMISES ADDRESS as shown in the 14
records of the [State] Department [of Assessments and Taxation, or other place of business 15
or residence if known,] by[: 16
(i) First–class mail;] FIRST–CLASS MAIL and 17
[(ii) Certified] CERTIFIED mail, return receipt requested. 18
(II) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS 19
AND THE PREMISES ADD RESS LISTED IN THE R ECORDS OF THE DEPARTMENT ARE 20
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY 21
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN 22
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY . 23
(III) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD 24
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED IN 25
PROVIDING NOTICE REQ UIRED UNDER THIS SUB SECTION. 26
(2) (I) The DEPARTMEN T SHALL DEVELOP AND MAKE AVAILABLE 27
ON ITS WEBSITE A FORM NOTICE FOR US E BY A GROUND LEASE HOLDER THE FORM 28
A GROUND LEASE HOLDE R MUST USE TO PROVIDE TO A LEAS EHOLD TENANT THE 29
notice required under paragraph (1) of this subsection. 30
(II) THE FORM shall be in 14 point bold font and [include] REQUIRE 31
THE FOLLOWING : 32
[(i)] 1. An itemized bill for the payment due; 33
6 SENATE BILL 194
[(ii)] 2. The amount necessary to cure the default, including late 1
fees, interest, collection costs, and expenses authorized under paragraph (3) of this 2
subsection; 3
[(iii)] 3. The name and address of the person to whom to send the 4
payment due; 5
[(iv)] 4. The name and contact information of the person to contact 6
for questions about the notice; and 7
[(v)] 5. A statement that unless the default is cured in 30 days: 8
[1.] A. The ground lease holder intends to file an action for 9
possession; and 10
[2.] B. The leasehold tenant may be liable for reimbursing 11
the ground lease holder for expenses and costs incurred in connection with the collection of 12
past due ground rent and the filing of the action for possession. 13
(3) If authorized under the ground lease, a ground lease holder may be 14
reimbursed for reasonable late fees, interest, collection costs, and expenses not exceeding 15
$650, including: 16
(i) Title abstract and examination fees; 17
(ii) Judgment report costs; 18
(iii) Photocopying and postage fees; and 19
(iv) Attorney’s fees. 20
8–809. 21
(a) (1) A ground lease holder may not collect a yearly or half –yearly 22
installment payment of a ground rent due under the ground lease unless: 23
[(1)] (I) The ground lease is registered with the [State] Department [of 24
Assessments and Taxation] under Subtitle 7 of this title; and 25
[(2)] (II) At least 60 days before the payment is due, the ground lease 26
holder mails a bill, IN THE FORM REQUIRED UNDER SUBSECTION (B) OF THIS 27
SECTION, to the last known address of the leasehold tenant and to the PREMISES address 28
of the property subject to the ground lease LISTED IN THE RECORD S OF THE 29
DEPARTMENT . 30
SENATE BILL 194 7
(2) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND 1
THE PREMISES ADDRESS LISTED IN THE RECORD S OF THE DEPARTMENT ARE 2
IDENTICAL, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE BILL TO 3
THE ADDRESS BY FIRST –CLASS MAIL AND ONE C OPY OF THE BILL TO T HE ADDRESS 4
BY CERTIFIED MAIL , RETURN RECEIPT REQUE STED. 5
(3) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND 6
PREMISES ADDRESS LIS TED IN THE RECORDS O F THE DEPARTMENT ARE 7
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE BILL BY 8
FIRST–CLASS MAIL AND ONE COPY OF THE BILL BY CERTIFIE D MAIL, RETURN 9
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY . 10
(4) A GROUND LEASE HOLDER MAY NOT REQUIRE THE LEASEHOLD 11
TENANT TO REIMBURSE THE GROUND LEASE HOL DER FOR COSTS INCURR ED TO 12
PROVIDE A BILL UNDER THIS SUBSECTION. 13
(b) (1) THE DEPARTMENT SHALL DEVE LOP AND MAKE AVAILAB LE ON ITS 14
WEBSITE A FORM BILL FOR USE BY A GROUND LEASE HO LDER THE FORM A GROUND 15
LEASE HOLDER MUST US E TO PROVIDE TO A LE ASEHOLD TENANT THE B ILL 16
REQUIRED UNDER SUBSE CTION (A)(1)(II) OF THIS SECTION. 17
(2) The FORM bill MADE AVAILABLE ON TH E DEPARTMENT ’S WEBSITE 18
shall include a notice in boldface type, at least as large as 14 point, in substantially the 19
following form: 20
“NOTICE REQUIRED BY MARYLAND LAW 21
REGARDING YOUR GROUND RENT 22
This property (address) is subject to a ground lease. The annual payment on the ground 23
lease (“ground rent”) is $(dollar amount), payable in yearly or half–yearly installments on 24
(date or dates). 25
The next ground rent payment is due (day, month, year) in the amount of $(dollar amount). 26
The payment of the ground rent should be sent to: 27
(name of ground lease holder) 28
(address) 29
(phone number) 30
NOTE REGARDING YOUR RIGHTS AND RESPONSIBILITIES UNDER MARYLAND 31
LAW: 32
The ground lease holder is required to register the ground lease with the State Department 33
of Assessments and Taxation and is prohibited from collecting ground rent payments unless 34
the ground lease is registered. If the ground lease is registered, as the owner of this 35 8 SENATE BILL 194
property, you are obligated to pay the ground rent to the ground lease holder. To determine 1
whether the ground lease is registered, you may check the [Web site] WEBSITE of the State 2
Department of Assessments and Taxation. It is also your responsibility to notify the ground 3
lease holder if you change your address or transfer ownership of the property. 4
If you fail to pay the ground rent on time, you are still responsible for paying the ground 5
rent. In addition, if the ground lease holder files an action in court to collect the past due 6
ground rent, you may be required to pay the ground lease holder for fees and costs 7
associated with the collection of the past due ground rent. In addition, the ground lease 8
holder may also file an action in court to take possession of the property, which may result 9
in your being responsible for additional fees and costs and ultimately in your loss of the 10
property. Please note that under Maryland law, a ground lease holder may demand not 11
more than 3 years of past due ground rent, and there are limits on how much a ground 12
lease holder may be reimbursed for fees and costs. If you fail to pay the ground rent on 13
time, you should contact a lawyer for advice. 14
As the owner of this property, you are entitled to redeem, or purchase, the ground lease 15
from the ground lease holder and obtain absolute ownership of the property. Unless you 16
and the ground lease holder agree to a lesser amount, the amount to redeem your ground 17
lease is _______. If you wish to redeem the ground lease, contact the ground lease holder. If 18
the identity of the ground lease holder is unknown, the State Department of Assessments 19
and Taxation provides a process to redeem the ground lease that may result in your 20
obtaining absolute ownership of the property. If you would like to obtain absolute 21
ownership of this property, you should contact a lawyer for advice.”. 22
8–810. 23
(a) Within 30 days after any transfer of a ground lease, the transferee shall notify 24
the leasehold tenant AND THE DEPARTMENT of the transfer. 25
(b) (1) The notification shall include the name and address of the new ground 26
lease holder and the date of the transfer. 27
(2) If the property is subject to a redeemable ground rent, the notification 28
shall also include the following notice: 29
“As the owner of the property subject to this ground lease, you are entitled to redeem, 30
or purchase, the ground lease from the ground lease holder and obtain absolute ownership 31
of the property. The redemption amount is fixed by law but may also be negotiated with 32
the ground lease holder for a different amount. For information on redeeming the ground 33
lease, contact the ground lease holder.” 34
(c) (1) A ground lease holder shall send notice under this section to the last 35
known address of the leasehold tenant AND THE PREMISES ADD RESS LISTED IN THE 36
RECORDS OF THE DEPARTMENT BY FIRST –CLASS MAIL AND CERTI FIED MAIL, 37
RETURN RECEIPT REQUE STED. 38 SENATE BILL 194 9
(2) IF A LEASEHOLD TENANT ’S LAST KNOWN MAILING ADDRESS AND 1
PREMISES ADDRESS LIS TED IN THE RECORDS O F THE DEPARTMENT ARE 2
DIFFERENT, THE GROUND LEASE HOL DER SHALL MAIL ONE C OPY OF THE NOTICE BY 3
FIRST–CLASS MAIL AND ONE C OPY OF THE NOTICE BY CERTIFIED MAIL , RETURN 4
RECEIPT REQUESTED , TO EACH ADDRESS , RESPECTIVELY . 5
(3) A GROUND LEASE HOLDER MAY NOT REQUIRE A LE ASEHOLD 6
TENANT TO REIMBURSE THE GROUND LEASE HOLDER FOR COS TS INCURRED IN 7
PROVIDING NOTICE REQ UIRED UNDER THIS SEC TION. 8
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 9
October 1, 2023. 10
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.