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.
*hb1408*
HOUSE BILL 1408
N1 4lr2060
By: Delegate Rosenberg
Introduced and read first time: February 9, 2024
Assigned to: Environment and Transportation
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 8, 2024
CHAPTER ______
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 seller and buyer of certain 4
residential property to rescind a contract of sale under certain circumstances; 5
requiring an escrow agent to distribute trust money in a contract of sale for 6
residential property to a certain party that rescinds the contract in accordance with 7
this Act; establishing that a buyer is entitled to a refund of any deposit paid for the 8
purchase of residential real property under certain circumstances; requiring that a 9
contract of sale comply with the requirements of this Act; and generally relating to 10
residential property and the assignment and rescission of contracts of sale. 11
BY adding to 12
Article – Real Property 13
Section 10–714 and 14–117(e)(24) 14
Annotated Code of Maryland 15
(2023 Replacement Volume) 16
BY repealing and reenacting, with amendments, 17
Article – Real Property 18
Section 14–117(e)(22) and (23) 19
Annotated Code of Maryland 20
(2023 Replacement Volume) 21
2 HOUSE BILL 1408
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Real Property 3
10–714. 4
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 5
INDICATED. 6
(2) “ESCROW AGENT ” MEANS A PERSON ENGAG ED IN THE BUSINESS 7
OF RESIDENTIAL PROPE RTY SETTLEMENTS WHO RECEIVES TRUST MONEY . 8
(3) (2) “RESIDENTIAL PROPERTY ” MEANS PROPERTY IMPRO VED 9
BY FOUR OR FEWER SIN GLE–FAMILY DWELLING UNIT S THAT ARE DESIGNED 10
PRINCIPALLY AND ARE INTENDED FOR HUMAN H ABITATION. 11
(4) “TRUST MONEY ” MEANS A DEPOSIT MADE BY A PURCHASER IN 12
CONNECTIO N WITH A RESIDENTIAL PROPERTY TRANSACTION THAT THE 13
PURCHASER DELIVERS T O AN ESCROW AGENT TO HOLD FOR THE BENEFIT OF THE 14
PURCHASER AND THE VE NDOR. 15
(B) A VENDOR OF RESIDENTIA L PROPERTY MAY RESCI ND A CONTRACT OF 16
SALE FOR THE PROPERT Y AT ANY TIME BEFORE THE DISTRIBUTION OF TRUS T 17
MONEY AT CLOSING IF THE PURCHASER : 18
(1) ASSIGNS THE CONTRACT TO ANOTHER PERSON ; AND 19
(2) FAILED TO DISCLOSE IN WRITING BEFORE THE C ONTRACT WAS 20
ENTERED INTO THAT TH E PURCHASER MAY ASSI GN THE CONTRACT TO A NOTHER 21
PERSON. 22
(C) A PURCHASER OF RESIDEN TIAL PROPERTY FROM A VENDOR THAT 23
HOLDS AN EQUITABLE I NTEREST IN THE PROPE RTY OR OTHERWISE DOE S NOT HOLD 24
LEGAL TITLE TO THE P ROPERTY MAY RESCIND A CONTRACT OF SALE F OR THE 25
PROPERTY AT ANY TIME BEFORE THE DISTRIBUT ION OF TRUST MONEY A T CLOSING 26
IF THE VENDOR: 27
(1) ASSIGNS THE CONTRACT TO ANOTHER PERSON ; AND 28
(2) FAILED TO DISCLOSE IN WRITING BEFORE THE C ONTRACT WAS 29
ENTERED INTO THAT TH E VENDOR MAY ASSIGN THE CONTRACT TO ANOT HER 30
PERSON. 31
HOUSE BILL 1408 3
(D) (1) A VENDOR OR PURCHASER OF RESIDENTIAL PROPERTY MAY NOT 1
BE PENALIZED FOR RES CINDING A CONTRACT I N ACCORDANCE WITH TH IS SECTION. 2
(2) IF A VENDOR OR PURCHA SER RESCINDS A CONTR ACT UNDER THIS 3
SECTION, THE ESCROW AGENT SHA LL DISTRIBUTE THE TR UST MONEY TO THE PAR TY 4
THAT RESCINDED THE C ONTRACT. 5
(3) “WHOLESALE BUYER ” MEANS A PERSON THAT ENTERS INTO A 6
CONTRACT OF SALE WIT H AN OWNER OF OWNER –OCCUPIED RESIDENTIAL 7
PROPERTY IN ORDER TO ASSIGN THE CONTRACT TO ANOTHER PERSON FO R A 8
MONETARY ASSIGNMENT FEE. 9
(4) “WHOLESALE SELLER ” MEANS A PERSON THAT , WITHOUT 10
HOLDING LEGAL TITLE TO OWNER–OCCUPIED RESIDENTIAL PROPERTY: 11
(I) ENTERS INTO A CONTRAC T OF SALE FOR THE PR OPERTY; 12
AND 13
(II) ASSIGNS THE PERSON ’S BENEFICIAL INTERES T IN THE 14
PROPERTY TO ANOTHER . 15
(B) THIS SECTION DOES NOT APPLY TO A SALES PRO CEEDING UNDER § 16
14–215 OF THE MARYLAND RULES. 17
(C) (1) BEFORE ENTERING INTO A CONTRACT OF SALE F OR RESIDENTIAL 18
PROPERTY, A WHOLESALE BUYER SH ALL DISCLOSE IN WRIT ING TO THE OWNER OF 19
THE PROPERTY THAT TH E WHOLESALE BUYER MA Y ASSIGN THE CONTRAC T OF SALE 20
TO ANOTHER PERSON . 21
(2) BEFORE ENTERING INTO A CONTRACT OF SALE F OR RESIDENTIAL 22
PROPERTY, A WHOLESALE SELLER S HALL DISCLOSE IN WRI TING TO A PROSPECTIV E 23
BUYER THAT THE WHOLE SALE SELLER HOLDS AN EQUITABLE INTEREST I N THE 24
PROPERTY AND MAY NOT BE ABLE TO CONVEY T ITLE TO THE PROPERTY . 25
(D) NOTWITHSTANDING ANY P ROVISION OF A CONTRA CT OF SALE OR ANY 26
OTHER AGREEMENT , AN OWNER OF RESIDENT IAL PROPERTY MAY RES CIND A 27
CONTRACT OF SALE TO A WHOLESALE BUYER , OR THE ASSIGNEE OR S UCCESSOR OF 28
A WHOLESALE BUYER , WITHOUT PENALTY AT ANY TIME BEFORE C LOSING IF THE 29
WHOLESALE BUYER : 30
(1) DOES NOT PROVIDE NOTI CE IN ACCORDANCE WIT H THE 31
REQUIREMENTS OF THIS SECTION; AND 32
(2) ASSIGNS THE CONTRACT OF SALE. 33 4 HOUSE BILL 1408
(E) (1) NOTWITHSTANDING ANY P ROVISION OF A CONTRA CT OF SALE OR 1
ANY OTHER AGREEMENT , A BUYER MAY RESCIND A CONTRACT OF SALE F OR 2
RESIDENTIAL PROPERTY WITHOUT PENALTY AT A NY TIME BEFORE CLOSI NG IF A 3
WHOLESALE SELLER DOE S NOT PROVIDE NOTICE IN ACCORDANCE WITH T HE 4
REQUIREMENTS OF THIS SECTION. 5
(2) A BUYER THAT RESCINDS A CONTRACT UNDER PARAGRAPH (1) OF 6
THIS SUBSECTION IS E NTITLED TO A REFUND OF ANY DEPOSIT PAID FOR THE 7
PROPERTY. 8
14–117. 9
(e) A contract of sale shall also comply with the following provisions, if applicable: 10
(22) Section 6–824 of the Environment Article (disclosure pertaining to 11
obligations to perform risk reduction); [and] 12
(23) Section 10–711 of this article (notice on zones of dewatering influence); 13
AND 14
(24) SECTION 10–714 OF THIS ARTICLE (DISCLOSURE PERTAI NING TO 15
ASSIGNMENT OF CONTRA CTS OF SALE BY WHOLE SALE BUYERS AND WHOL ESALE 16
SELLERS). 17
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 18
apply only prospectively and may not be applied or interpreted to have any effect on or 19
application to any contracts of sale for residential property executed before the effective 20
date of this Act. 21
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 22
October 1, 2024. 23
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.