EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0855*
SENATE BILL 855
Q2, Q1 3lr1424
CF HB 921
By: Senator McCray
Introduced and read first time: February 6, 2023
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Property Tax – In Rem Foreclosure 2
FOR the purpose of authorizing certain vacant property and nuisance property located in 3
Baltimore City to be subject to a certain in rem foreclosure process; requiring service 4
of a complaint for in rem foreclosure to be served in accordance with the Maryland 5
Rules; providing for the distribution of surplus proceeds from the sale of property 6
subject to an in rem foreclosure; authorizing an in rem foreclosure order to be set 7
aside under certain circumstances; providing for the redemption amounts required 8
to be paid when an in rem foreclosure is set aside; and generally relating to in rem 9
foreclosure of property. 10
BY repealing and reenacting, with amendments, 11
Article – Tax – Property 12
Section 14–874 through 14–876 13
Annotated Code of Maryland 14
(2019 Replacement Volume and 2022 Supplement) 15
BY adding to 16
Article – Tax – Property 17
Section 14–877 and 14–878 18
Annotated Code of Maryland 19
(2019 Replacement Volume and 2022 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – Tax – Property 23
14–874. 24
2 SENATE BILL 855
(a) (1) [Real] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 1
SUBSECTION, REAL property may be subject to foreclosure and sale under this part only 2
if: 3
[(1)] (I) the property consists of a vacant lot or improved property cited 4
as vacant and unsafe or unfit for habitation or other authorized use on a housing or building 5
violation notice; and 6
[(2)] (II) the total amount of liens for unpaid taxes on the property exceeds 7
the lesser of the total value of the property as last determined by the Department or as 8
determined by an appraisal report prepared not more than 6 months before the filing of a 9
complaint under this section by a real estate appraiser who is licensed under Title 16 of the 10
Business Occupations and Professions Article. 11
(2) REAL PROPERTY LOCATED IN BALTIMORE CITY MAY BE SUBJECT 12
TO FORECLOSURE AND S ALE UNDER THIS PART IF THE PROPERTY IS A VA CANT 13
PROPERTY OR A NUISAN CE PROPERTY , AS DETERMINED UNDER THE BALTIMORE 14
CITY BUILDING CODE. 15
(b) (1) A county or municipal corporation may authorize by law an in rem 16
foreclosure in accordance with this part. 17
(2) A law that authorizes an in rem foreclosure shall: 18
(i) state the date after which real property may be subject to in rem 19
foreclosure under this part; 20
(ii) establish criteria for designating real property to be foreclosed 21
under this part; 22
(iii) authorize the county or municipal corporation to file a complaint 23
for an in rem foreclosure under this part; and 24
(iv) include administrative rules and procedures necessary to carry 25
out an in rem foreclosure under this part. 26
(c) (1) Subject to subsection (d) of this section, a county or municipal 27
corporation may authorize, by law, the sale of real property after an in rem foreclosure and 28
designate real property to be sold under this part. 29
(2) A law that authorizes a sale of real property after an in rem foreclosure 30
shall: 31
(i) state the date after which the real property may be subject to sale 32
after an in rem foreclosure under this part; 33
SENATE BILL 855 3
(ii) establish criteria for designating real property to be sold under 1
this part; and 2
(iii) include administrative rules and procedures necessary to carry 3
out a sale under this part. 4
(d) [Only] EXCEPT AS PROVIDED IN SUBSECTION (A)(2) OF THIS SECTION , 5
ONLY real property that consists of a vacant lot or improved property cited as vacant and 6
unsafe or unfit for habitation or other authorized use on a housing or building violation 7
notice may be sold under this part. 8
14–875. 9
(a) A county or municipal corporation may file a complaint for an in rem 10
foreclosure action in accordance with this part. 11
(b) The county or municipal corporation may not file a complaint for an in rem 12
foreclosure action unless: 13
(1) the tax on the real property has been delinquent for at least 6 months; 14
and 15
(2) (I) the right to appeal the notice of the property as vacant and 16
unsafe or unfit has tolled; OR 17
(II) THE RIGHT TO APPEAL THE NOTICE OF THE PR OPERTY AS 18
VACANT PROPERTY OR A NUISANCE PROPERTY , AS DETERMINED UNDER THE 19
BALTIMORE CITY BUILDING CODE, HAS TOLLED. 20
(c) All taxes shall: 21
(1) be included in the foreclosure action; and 22
(2) cease to be a lien against the real property if a judgment is entered 23
foreclosing the existing interests of all interested parties in the real property. 24
(d) The county or municipal corporation shall: 25
(1) file the complaint for an in rem foreclosure in the circuit court of the 26
county where the real property is located; and 27
(2) [within 5 days after filing the complaint, send notice and a copy of] 28
SERVE the complaint to each interested party [by first–class mail and certified mail, 29
postage prepaid, return receipt requested, bearing a postmark from the United States 30
Postal Service] IN ACCORDANCE WITH T HE MARYLAND RULES. 31
4 SENATE BILL 855
(e) The complaint for an in rem foreclosure shall include: 1
(1) the identity of the county or municipal corporation on behalf of which 2
the complaint is filed; 3
(2) the name and address of the county or municipal corporation; 4
(3) a description of the real property as it appears in the county land 5
records; 6
(4) the tax identification number of the real property; 7
(5) a statement that the taxes are delinquent at the time of the filing; 8
(6) the amount of taxes that are delinquent as of the date of filing; 9
(7) the names and last known addresses of all interested parties in the real 10
property and, if applicable, a statement that the address of a particular interested party in 11
the real property is unknown; 12
(8) a statement that the real property is: 13
(I) a vacant lot or improved property cited as vacant and unsafe or 14
unfit for habitation or other authorized use on a housing or building violation notice; OR 15
(II) A VACANT PROPERTY OR A NUISANCE PROPERTY , AS 16
DETERMINED UNDER THE BALTIMORE CITY BUILDING CODE; 17
(9) copies of any violation notice cited under paragraph (8) of this 18
subsection; 19
(10) a request that the circuit court not schedule a hearing on the complaint 20
until 30 days after the date that the complaint is filed; and 21
(11) a request that the circuit court enter a judgment that forecloses the 22
existing interests of all interested parties in the real property and orders ownership of the 23
real property to be transferred to the county or municipal corporation. 24
(f) A complaint for an in rem foreclosure may be amended to include all taxes 25
that become delinquent after the commencement of the in rem foreclosure action. 26
(g) (1) Subject to paragraph (2) of this subsection, an interested party has the 27
right to cure the delinquent taxes and liens on the real property by paying all past due fees, 28
payments, and penalties at any time before the entry of the foreclosure judgment. 29
SENATE BILL 855 5
(2) The right to cure the delinquent taxes and liens on the real property 1
extinguishes once the foreclosure judgment is entered. 2
14–876. 3
(a) A circuit court may not set a hearing for an in rem foreclosure until 30 days 4
after the complaint for an in rem foreclosure is filed. 5
(b) At the hearing, any interested party shall have the right to be heard and to 6
contest the delinquency of the taxes and the adequacy of the proceedings. 7
(c) If the circuit court finds that the county or municipal corporation sent notice 8
and a copy of the complaint to each interested party in accordance with § 14–875(d) of this 9
subtitle and that the information set forth in the complaint is accurate, the court shall: 10
(1) enter a judgment that: 11
(i) proper notice has been provided to all interested parties; and 12
(ii) the real property is: 13
1. a vacant lot or an improved property cited as vacant and 14
unsafe or unfit for habitation or other authorized use on a housing or building violation 15
notice; OR 16
2. A VACANT PROPERTY OR A NUISANCE PROPERTY , AS 17
DETERMINED UNDER THE BALTIMORE CITY BUILDING CODE; and 18
(2) order that ownership of the real property be transferred to the county 19
or municipal corporation on behalf of which the complaint was filed. 20
(d) (1) The county or municipal corporation shall record a judgment under 21
subsection (c) of this section in the land records of the county. 22
(2) The title acquired in an in rem foreclosure proceeding shall be an 23
absolute or fee simple title including the right, title, and interest of each of the defendants 24
in the proceeding whose property has been foreclosed unless a different title is specified in 25
the judgment entered. 26
(3) A judgment in an action under this part is binding and conclusive, 27
regardless of legal disability, on: 28
(i) all persons, known and unknown, who were parties to the action 29
and who had a claim to the property, whether present or future, vested or contingent, legal 30
or equitable, or several or undivided; and 31
6 SENATE BILL 855
(ii) all persons who were not parties to the action and had a claim to 1
the property that was not recorded at the time that the action was commenced. 2
14–877. 3
(A) IN THIS SECTION, “SURPLUS PROCEEDS ” MEANS THE PROCEEDS F ROM 4
THE SALE OF PROPERTY SOLD WITHIN 1 YEAR FROM WHEN THE PROPER TY WAS 5
OBTAINED BY A COUNTY OR MUNIC IPAL CORPORATION THROUGH AN IN REM 6
FORECLOSURE , THAT EXCEED THE SUM OF: 7
(1) THE DELINQUENT TAXES , FEES, AND PENALTIES ON THE 8
PROPERTY; AND 9
(2) THE VALUE OF ALL IMP ROVEMENTS MADE ON TH E PROPERTY AND 10
ALL COSTS INCURRED W ITH RESPECT TO DEVEL OPMENT OF THE PROPER TY PRIOR 11
TO THE SALE BY THE C OUNTY OR MUNICIPAL C ORPORATION . 12
(B) (1) SURPLUS PROCEEDS SHALL B E HELD BY A COUNTY O R 13
MUNICIPALITY FOR A P ERIOD OF 12 MONTHS. 14
(2) AFTER 12 MONTHS, SURPLUS PROCEEDS SHA LL BE DISTRIBUTED 15
TO ANY PERSON WITH AN O UTSTANDING CLAIM ON THE PROPERTY , IN ORDER OF 16
PRIORITY. 17
(C) EACH COUNTY AND MUNIC IPALITY SHALL MAINTA IN A LIST OF 18
PROPERTIES OBTAINED THROUGH IN REM FOREC LOSURE THAT HAVE BEEN SOLD 19
WITHIN 1 YEAR FROM WHEN THE P ROPERTY WAS OBTAINED AND FOR WHICH THE 20
SALE HAS RESULTED IN SURPLUS PROCEEDS . 21
14–878. 22
(A) (1) EXCEPT AS PROVIDED IN PARAGRAP H (2) OF THIS SUBSECTION , A 23
COURT MAY NOT REOPEN A JUDGMENT RENDERED IN AN IN REM FORECLOSURE 24
PROCEEDING IN ACCORDANCE WITH T HIS PART EXCEPT ON THE GROUND OF LACK 25
OF JURISDICTION OR F RAUD IN THE CONDUCT OF THE PROCEEDINGS T O 26
FORECLOSE. 27
(2) A COURT MAY NOT REOPEN ANY JUDGMENT UNDER PARAGRAPH 28
(1) OF THIS SUBSECTION ON THE GROUND OF CON STRUCTIVE FRAUD IN T HE 29
CONDUCT OF THE PROCE EDINGS TO FORECLOSE UNLESS AN APPLICATIO N TO 30
REOPEN A JUDGMENT RE NDERED IS FILED WITH IN 1 YEAR FROM THE DATE O F THE 31
JUDGMENT. 32
SENATE BILL 855 7
(B) A PLAINTIFF IN A N ACTION TO REOPEN AN IN REM FORECLOSURE 1
JUDGMENT SHALL : 2
(1) EXCEPT AS PROVIDED IN SUBSECTION (A)(2) OF THIS SECTION , 3
FILE THE ACTION WITH IN 3 YEARS OF THE ISSUANC E OF THE IN REM FORE CLOSURE 4
JUDGMENT; AND 5
(2) WITHIN 30 DAYS OF FILING THE A CTION, SUBMIT EVIDENCE TO 6
THE COURT THAT THE P LAINTIFF HAS OBTAINE D A BOND EQUAL TO THE 7
REASONABLE VALUE OF THE PROPERTY . 8
(C) IF AN IN REM FORECLOSUR E JUDGMENT OF THE COUR T IS SET ASIDE, 9
THE AMOUNT REQUIRED TO REDEEM IS: 10
(1) THE AMOUNT REQUIRED BY THIS SUBTITLE; AND 11
(2) THE REASONABLE VALUE , AT THE DATE THE JUDG MENT IS SET 12
ASIDE, OF ALL IMPROVEMENTS MADE ON THE PROPERTY AND ALL COSTS INCURR ED 13
WITH RESPECT TO DEVE LOPMENT OF THE PROPE RTY BY THE PURCHASER AND THE 14
PURCHASE R’S SUCCESSORS IN INTE REST. 15
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 16
October 1, 2023. 17