EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1408*
HOUSE BILL 1408
N1 4lr2060
By: Delegate Rosenberg
Introduced and read first time: February 9, 2024
Assigned to: Environment and Transportation
A BILL ENTITLED
AN ACT concerning 1
Residential Property – Assignment of Contracts of Sale – Disclosure 2
Requirements and Rescission 3
FOR the purpose of authorizing a vendor and purchaser of residential property to rescind 4
a contract of sale under certain circumstances; requiring an escrow agent to 5
distribute trust money in a contract of sale for residential property to a certain party 6
that rescinds the contract in accordance with this Act; and generally relating to 7
residential property and the assignment and rescission of contracts of sale. 8
BY adding to 9
Article – Real Property 10
Section 10–714 11
Annotated Code of Maryland 12
(2023 Replacement Volume) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Real Property 16
10–714. 17
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 18
INDICATED. 19
(2) “ESCROW AGENT ” MEANS A PERSON ENGAG ED IN THE BUSINESS 20
OF RESIDENTIAL PROPERTY SETTLEMENTS WHO RECE IVES TRUST MONEY . 21
2 HOUSE BILL 1408
(3) “RESIDENTIAL PROPERTY” MEANS PROPERTY IMPROVED BY 1
FOUR OR FEWER SINGLE –FAMILY DWELLING UNIT S THAT ARE DESIGNED 2
PRINCIPALLY AND ARE INTENDED FOR HUMAN H ABITATION. 3
(4) “TRUST MONEY ” MEANS A DEPOSIT MADE BY A PURCHASER IN 4
CONNECTION WITH A RE SIDENTIAL PROPERTY TRANSACTION THAT THE 5
PURCHASER DELIVERS T O AN ESCROW AGENT TO HOLD FOR THE BENEFIT OF THE 6
PURCHASER AND THE VENDOR. 7
(B) A VENDOR OF RESIDENTIAL PROPERTY MAY RESCIND A CONTRACT OF 8
SALE FOR THE PROPERTY AT ANY TIME BEFORE T HE DISTRIBUTION OF TRUST 9
MONEY AT CLOSING IF THE PURCHASER : 10
(1) ASSIGNS THE CONTRACT TO ANOTHER PERSON ; AND 11
(2) FAILED TO DISCLOSE IN WRITING BEFORE THE CONTRACT WAS 12
ENTERED INTO THAT THE PURCHASER M AY ASSIGN THE CONTRACT TO ANOTHER 13
PERSON. 14
(C) A PURCHASER OF RESIDENTIAL PROPE RTY FROM A VENDOR THAT 15
HOLDS AN EQUITABLE INTEREST IN THE PROP ERTY OR OTHERWISE DOES NOT HOLD 16
LEGAL TITLE TO THE PROPERTY MAY RESCIND A CONTRACT OF SALE FOR THE 17
PROPERTY AT ANY TIME BEFORE THE DISTRIBUT ION OF TRUST MONEY A T CLOSING 18
IF THE VENDOR: 19
(1) ASSIGNS THE CONTRACT TO ANOTHER PERSON ; AND 20
(2) FAILED TO DISCLOSE IN WRITING BEFORE THE CONTRACT WAS 21
ENTERED INTO THAT THE VENDOR M AY ASSIGN THE CONTRACT TO ANOTHER 22
PERSON. 23
(D) (1) A VENDOR OR PURCHASER OF RESI DENTIAL PROPERTY MAY NOT 24
BE PENALIZED FOR RESCINDING A CONTRACT IN ACCORDANCE WITH THIS SECTION. 25
(2) IF A VENDOR OR PURCHASER RESCINDS A CONTRACT UNDER T HIS 26
SECTION, THE ESCROW AGENT SHA LL DISTRIBUTE THE TR UST MONEY TO THE PARTY 27
THAT RESCINDED THE CONTRACT . 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 29
apply only prospectively and may not be applied or interpreted to have any effect on or 30
application to any contracts of sale for residential property executed before the effective 31
date of this Act. 32
HOUSE BILL 1408 3
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
October 1, 2024. 2