EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0664*
SENATE BILL 664
N1 4lr2533
HB 425/23 – ENT CF HB 480
By: Senator Charles
Introduced and read first time: January 29, 2024
Assigned to: Judicial Proceedings
A BILL ENTITLED
AN ACT concerning 1
Real Property – Land Installment Contracts – Requirements and Vendor Duties 2
and Limitations 3
FOR the purpose of requiring that certain signatures for the parties to a land installment 4
contract be acknowledged and include the date that the party signed the contract; 5
requiring the vendor to provide a purchaser under a land installment contract with 6
the results of a title search for the property at or before the time the purchaser signs 7
the contract; requiring the inclusion of certain notice, terms, and recitals in a land 8
installment contract; altering the percentage of the original cash price of a land 9
installment contract that the purchaser must pay before the purchaser may demand 10
a grant of the deed to the property to the purchaser; prohibiting a vendor from 11
executing an agreement with the purchaser to assign an outstanding mortgage or 12
lien secured by the property to the purchaser without granting the purchaser deed 13
to the property; and generally relating to purchases of real property by land 14
installment contract. 15
BY repealing and reenacting, without amendments, 16
Article – Real Property 17
Section 10–101(a) and (c) 18
Annotated Code of Maryland 19
(2023 Replacement Volume) 20
BY repealing and reenacting, with amendments, 21
Article – Real Property 22
Section 10–102, 10–103, 10–105, and 10–107 23
Annotated Code of Maryland 24
(2023 Replacement Volume) 25
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 26
That the Laws of Maryland read as follows: 27
2 SENATE BILL 664
Article – Real Property 1
10–101. 2
(a) In this subtitle the following words have the meanings indicated unless 3
otherwise apparent from context. 4
(c) “Land installment contract” means a legally binding executory agreement 5
under which: 6
(1) The vendor agrees to sell an interest in property to the purchaser and 7
the purchaser agrees to pay the purchase price in five or more subsequent payments 8
exclusive of the down payment, if any; and 9
(2) The vendor retains title as security for the purchaser’s obligation. 10
10–102. 11
(a) [Every] A land installment contract shall be evidenced by [a contract] AN 12
INSTRUMENT DULY signed AND ACKNOWLEDGED by all parties to [it] THE 13
INSTRUMENT , THAT INCLUDES THE DA TE ON WHICH EACH PAR TY SIGNED THE 14
INSTRUMENT and [containing] CONTAINS all the terms to which [they] THE PARTIES 15
have agreed. 16
(b) (1) (I) At or before the time the purchaser signs the instrument, the 17
vendor shall deliver to [him] THE PURCHASER an exact copy OF THE INSTRUMENT AN D, 18
SUBJECT TO SUBPARAGR APH (II) OF THIS PARAGRAPH , THE RESULTS OF A TITLE 19
SEARCH FOR THE PROPE RTY SUBJECT TO THE L AND INSTALLMENT CONT RACT, and 20
the purchaser shall give the vendor a receipt showing that [he] THE PURCHASER has 21
received the copy of the instrument. 22
(II) THE TITLE SEARCH SHAL L BE PERFORMED BY A QUALIFIED, 23
DISINTERESTED PARTY AT THE VENDOR ’S EXPENSE. 24
(2) (I) If the copy OF THE INSTRUMENT was not executed by the 25
vendor at the time the purchaser signed, the vendor shall deliver a copy of the instrument 26
signed by [him] THE VENDOR within 15 days after [he] THE VENDOR receives notice that 27
the purchaser has signed and the purchaser shall give the vendor a receipt showing that 28
[he] THE PURCHASER has received the copy. 29
(II) If the vendor fails to deliver the copy within 15 days, the contract 30
signed by the purchaser is void at [his] THE PURCHASER ’S option, and the vendor, 31
immediately, on demand, shall refund to the purchaser all payments and deposits that have 32
been made. 33
SENATE BILL 664 3
(c) (1) The receipt for the delivery of a copy of a contract shall be printed in 1
12–point bold type or larger, typewritten or written in legible handwriting. 2
(2) If contained in the contract, the receipt shall be printed, typewritten, or 3
written immediately below the signature on the contract and shall be signed separately. 4
(3) IF NOT CONTAINED IN T HE CONTRACT , THE RECEIPT SHALL BE 5
SIGNED AND ACKNOWLED GED BY THE PURCHASER AND INCLUDE THE DATE THAT 6
THE PURCHASER SIGNED THE CONTRACT . 7
(d) Until the purchaser signs a land installment contract and receives a copy 8
signed by the vendor, the purchaser has an unconditional right to cancel the contract and 9
to receive immediate refund of all payments and deposits made on account of or in 10
contemplation of the contract. A request for a refund operates to cancel the contract. 11
(e) When any payment or deposit is accepted by the vendor from a purchaser, 12
before the purchaser signs a land installment contract and receives a copy, the vendor 13
immediately shall deliver to [him] THE PURCHASER a receipt, which clearly states in 14
12–point type or larger, in typewriting or in legible handwriting, [his] THE PURCHASER ’S 15
rights under subsection (d) of this section. 16
(f) (1) Within 15 days after the contract is signed by both the vendor and 17
purchaser, the vendor shall cause the contract to be recorded among the land records of the 18
county where the property lies and shall mail the recorder’s receipt to the purchaser. [This] 19
(2) THE duty of recordation and mailing of receipt shall be written clearly 20
or printed on the contract. [Failure to do so, or to record as required under this section 21
within the time stipulated,] 22
(3) A VENDOR’S FAILURE TO MEET TH E REQUIREMENTS OF 23
PARAGRAPHS (1) AND (2) OF THIS SUBSECTION gives the purchaser the unconditional 24
right to cancel the contract and to receive AN immediate refund of all payments and 25
deposits made on account of or in contemplation of the contract, if the purchaser exercises 26
the right to cancel before the vendor records the contract. 27
10–103. 28
(a) Every land installment contract shall contain all the following information: 29
(1) The full name, the place of residence, and post office address of every 30
party to the contract; 31
(2) The date when signed by the purchaser; 32
(3) A legal description AND THE PHYSICAL ADD RESS of the property 33
covered by the contract; 34 4 SENATE BILL 664
(4) A disclosure, with respect to the six–month period prior to the date of 1
purchase, of [every transfer of title to the property, the sale price of each transfer,] THE 2
SALE PRICE FOR EVERY TRAN SFER OF TITLE TO THE PROPERTY and the substantiated 3
cost to the vendor of repairs or improvements TO THE PROPERTY ; 4
(5) (I) AN ATTESTATION THAT T HE VENDOR PROVIDED T HE 5
PURCHASER WITH THE R ESULTS OF A TITLE SE ARCH FOR THE PROPERT Y SUBJECT 6
TO THE LAND INSTALLM ENT CONTRACT AS REQU IRED UNDER § 10–102 OF THIS 7
SUBTITLE, SIGNED BY THE PURCHA SER; AND 8
(II) IF TITLE TO THE PROPE RTY SUBJECT TO THE L AND 9
INSTALLMENT CONTRACT IS NOT FREE AND CLEA R OF ALL ENCUMBRANCE S, A 10
SEPARATE NOTICE BY T HE VENDOR THAT THE PURCHA SER HAS BEEN INFORME D 11
THAT LIENS EXIST ON THE PROPERTY SUBJECT TO THE LAND INSTALLM ENT 12
CONTRACT AND THAT TH IS MAY NEGATIVELY IM PACT THE PURCHASER ’S RIGHTS TO 13
THE PROPERTY THAT IS SIGNED BY THE PURCHA SER; 14
[(5)] (6) A provision that the [vendee] PURCHASER has the right to 15
accelerate any installment payment; 16
[(6)] (7) Provisions stating clearly (i) any collateral security taken for the 17
purchaser’s obligation under the contract, and (ii) whether or not the vendor has received 18
any written notice from any public agency requiring any repairs or improvements to be 19
made to the property described in the contract; 20
[(7)] (8) The following notice in 12–point bold type or larger, typewritten 21
or handwritten legibly directly above the space reserved in the contract for the signature 22
of the purchaser: 23
Notice to Purchaser 24
You are entitled to a copy of this contract at the time you sign it; 25
[(8)] (9) The following notice, in 12–point bold type or larger, typewritten 26
or handwritten legibly, directly below the space reserved in the contract for the signature 27
of the purchaser acknowledging the receipt of a copy of the contract: 28
[In] SUBJECT TO THE ABILIT Y OF A PURCHASER TO CURE A DEFAULT UNDER 29
§ 10–106 OF THE REAL PROPERTY ARTICLE, ANNOTATED CODE OF MARYLAND, IN 30
the event of default, the purchaser may be liable to a default judgment; AND 31
(10) PROVISIONS STATING CL EARLY THE RIGHTS OF THE PURCHASER 32
AND SELLER TO CURE A DEFAULT. 33
SENATE BILL 664 5
(b) The contract also shall recite in simple tabular form, the following separate 1
items in the following order: 2
(1) The cash price of the property sold; 3
(2) Any charge or fee for any service which is included in the contract 4
separate from the cash price; 5
(3) The cost to the purchaser of any insurance coverage from the date of 6
the contract, for the payment of which credit is to be extended to the purchaser, the amount 7
or extent and expiration date of the coverage, a concise description of the type of coverage, 8
and every party to whom the insurance is payable; 9
(4) The sum of items (1), (2), and (3) OF THIS SUBSECTION ; 10
(5) The amount of any down payment on behalf of the purchaser; 11
(6) The principal balance owed, which is the sum of item (4) of this 12
[subtitle] SUBSECTION less item (5) of this [subtitle] SUBSECTION ; 13
(7) (I) The amount and [time] DUE DATE of each installment payment 14
[and the], BROKEN OUT BY : 15
1. THE AMOUNT OF PRINCIP AL OWED FOR THE 16
INSTALLMENT PAYMENT ; AND 17
2. THE AMOUNT OF INTERES T OWED FOR THE 18
INSTALLMENT PAYMENT ; 19
(II) THE total number of periodic [installments] INSTALLMENT 20
PAYMENTS; AND 21
(III) DISCLOSURE OF ANY BAL LOON PAYMENTS ; 22
(8) The interest on the unpaid balance not exceeding the percentage per 23
annum allowed by § 12–404(b) of the Commercial Law Article, provided that points may 24
not be charged; AND 25
(9) Any ground rent, taxes, and other public charges. 26
(c) The installment payments first shall be applied by the vendor to the payment 27
of: 28
(1) Taxes, assessments, and other public charges levied or assessed against 29
the property and paid by the vendor; 30
6 SENATE BILL 664
(2) Any ground rent paid by the vendor; 1
(3) Insurance premiums on the property paid by the vendor; 2
(4) Interest on unpaid balance owed by the purchaser at a rate not 3
exceeding the percentage per annum allowed by § 12–404(b) of the Commercial Law Article; 4
AND 5
(5) Principal balance owed by purchaser. 6
(d) No vendor may place or hold any mortgage on any property sold under a land 7
installment contract in any amount greater than the balance due under the contract, nor 8
may any mortgage require payments in excess of the periodic payments required under the 9
contract. 10
10–105. 11
(a) If the LAND INSTALLMENT contract fixes no earlier period, when [40 percent] 12
20% or more of the original cash price of the property is paid, the purchaser may demand 13
a grant of the [premises mentioned in] PROPERTY SUBJECT TO the contract, on the 14
condition that [he] THE PURCHASER execute a purchase money mortgage to the vendor, 15
or to a mortgagee procured by the purchaser. If any mortgage is executed [pursuant to] IN 16
ACCORDANCE WITH the purchaser’s demand for grant under this subsection, the 17
purchaser is liable for expenses, such as title search, drawing deed and mortgage, one half 18
of cost of federal and State revenue stamps, notary fees, recording, reasonable building 19
association fees, judgment reports, and tax lien report. 20
(b) The periodic principal and interest payments required by the mortgage may 21
not exceed the periodic principal and interest payments otherwise required by the land 22
installment contract, except with the consent of the mortgagor. This consent may be 23
evidenced by the execution of a mortgage. 24
(c) The mortgagee may require the usual covenants by the mortgagor for the 25
payment of the mortgage debt, the taxes on the mortgaged property, any ground rent, and 26
the premiums on fire and extended coverage insurance in an amount equal to the mortgage 27
indebtedness, if obtainable, and if not, then in the highest amount of insurance obtainable. 28
The mortgage also may require the usual remedies on default by way of a power of sale to 29
the mortgagee, [his] THE MORTGAGEE ’S assigns, or [his] THE MORTGAGEE ’S attorney or 30
assent to a decree for sale by the mortgagor pursuant to the Maryland Rules, or both. 31
(d) The deed and mortgage executed pursuant to this section shall supersede 32
entirely the land installment contract. 33
(E) A VENDOR MAY NOT EXECU TE AN AGREEMENT WITH A PURCHASER 34
ASSIGNING TO THE PUR CHASER AN OUTSTANDIN G MORTGAGE OR OTHER LIEN 35
SECURED BY THE PROPE RTY THAT IS SUBJECT TO THE LAND INSTALLM ENT 36 SENATE BILL 664 7
CONTRACT WITHOUT GRA NTING THE PURCHASER DEED TO THE PROPERTY IN 1
ACCORDANCE WITH THIS SECTION. 2
10–107. 3
(a) Every vendor under a land installment contract shall mail or deliver a 4
statement to the purchaser: 5
(1) When [40 percent] 20% of the original cash price has been paid; and 6
(2) (i) Annually within 30 days of January 1; or 7
(ii) On demand of the purchaser no more than twice a year. 8
(b) The statement shall show: 9
(1) The total amount paid for any ground rent, insurance, taxes, and any 10
other periodic charge; 11
(2) The amount credited to principal and interest; and 12
(3) The balance due. 13
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
October 1, 2024. 15