Maryland 2024 Regular Session

Maryland Senate Bill SB901 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	sb0901
6	6
7	7	SENATE BILL 901
8	8	N1 4lr2384
9	9
10	10	By: Senator West
11	11	Introduced and read first time: February 2, 2024
12	12	Assigned to: Judicial Proceedings
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Ground Leases – Application for Redemption – Procedures 2
19	19
20	20	FOR the purpose of altering certain requirements for a leasehold tenant to apply to redeem 3
21	21	a certain ground lease; and generally relating to ground lease redemption. 4
22	22
23	23	BY repealing and reenacting, without amendments, 5
24	24	Article – Real Property 6
25	25	Section 8–804(a) and (f)(3) 7
26	26	Annotated Code of Maryland 8
27	27	(2023 Replacement Volume) 9
28	28
29	29	BY repealing and reenacting, with amendments, 10
30	30	Article – Real Property 11
31	31	Section 8–804(b) and (f)(1), (2), and (4) 12
32	32	Annotated Code of Maryland 13
33	33	(2023 Replacement Volume) 14
34	34
35	35	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
36	36	That the Laws of Maryland read as follows: 16
37	37
38	38	Article – Real Property 17
39	39
40	40	8–804. 18
41	41
42	42	(a) (1) Except as provided in subsection (f) of this section, this section does not 19
43	43	apply to irredeemable ground leases preserved under § 8–805 of this subtitle. 20
44	44
45	45	(2) This section does not apply to an affordable housing land trust 21
46	46	agreement executed under Title 14, Subtitle 5 of this article. 22
47	47	2 SENATE BILL 901
48	48
49	49
50	50	(b) (1) (I) Except for apartment and cooperative leases AND SUBJECT TO 1
51	51	SUBPARAGRAPH (II) OF THIS PARAGRAPH , any reversion reserved in a ground lease for 2
52	52	longer than 15 years is redeemable at any time, at the option of the leasehold tenant[, 3
53	53	after]. 4
54	54
55	55	(II) IF A GROUND LEASE IS REGISTERE D IN ACCORDANCE WITH 5
56	56	SUBTITLE 7 OF THIS TITLE, THE LEASEHOLD TENANT MUST PROVIDE 30 days’ notice 6
57	57	to the ground lease holder[. Notice shall be given] by certified mail, return receipt 7
58	58	requested, and by first–class mail to the last known address of the ground lease holder, 8
59	59	BEFORE THE LEASEHOLD TENANT MAY REDEEM THE GROUND LEASE. 9
60	60
61	61	(2) The reversion is redeemable: 10
62	62
63	63	(i) For a sum equal to the annual ground rent reserved multiplied 11
64	64	by: 12
65	65
66	66	1. 25, which is capitalization at 4 percent, if the ground lease 13
67	67	was executed from April 8, 1884, to April 5, 1888, both inclusive; 14
68	68
69	69	2. 8.33, which is capitalization at 12 percent, if the ground 15
70	70	lease was or is created after July 1, 1982; or 16
71	71
72	72	3. 16.66, which is capitalization at 6 percent, if the ground 17
73	73	lease was created at any other time; 18
74	74
75	75	(ii) For a lesser sum if specified in the ground lease; or 19
76	76
77	77	(iii) For a sum to which the parties may agree at the time of 20
78	78	redemption. 21
79	79
80	80	(3) (i) If the leasehold tenant is in default under a security instrument, 22
81	81	the holder of the secured interest in the property that is subject to a ground lease, or any 23
82	82	portion of a ground lease, that is recorded in the land records of the county in which the 24
83	83	property is located may apply to the State Department of Assessments and Taxation to 25
84	84	redeem the reversion as provided under this section. 26
85	85
86	86	(ii) If a holder of a secured interest applies to redeem a reversion as 27
87	87	authorized under subparagraph (i) of this paragraph, the holder also shall pay to the 28
88	88	ground lease holder the outstanding amount due, including, if authorized under the ground 29
89	89	lease, reasonable late fees, interest, collection costs, and expenses as provided under § 30
90	90	8–807 of this subtitle. 31
91	91
92	92	(f) (1) (i) A leasehold tenant who [has given the ground lease holder notice 32
93	93	in accordance with] IS AUTHORIZED TO RED EEM A GROUND RENT UN DER subsection 33
94	94	(b) of this section may apply to the Department to redeem [a] THE ground rent as provided 34
95	95	in this subsection. 35 SENATE BILL 901 3
96	96
97	97
98	98
99	99	(ii) When the Mayor and City Council of Baltimore City acquires 1
100	100	property that is subject to an irredeemable ground rent, the City shall become the leasehold 2
101	101	tenant of the ground rent and, after giving the ground lease holder notice in accordance 3
102	102	with subsection (b) of this section, may apply to the Department to extinguish the ground 4
103	103	rent as provided in this subsection. 5
104	104
105	105	(iii) When the Mayor and City Council of Baltimore City acquires 6
106	106	abandoned or distressed property that is subject to a redeemable ground rent, the City shall 7
107	107	become the leasehold tenant of the ground rent and, after giving the ground lease holder 8
108	108	notice in accordance with subsection (b) of this section, may apply to the Department to 9
109	109	redeem the ground rent as provided in this subsection. 10
110	110
111	111	(2) The leasehold tenant shall provide to the Department: 11
112	112
113	113	(i) Documentation satisfactory to the Department of the ground 12
114	114	lease and, IF THE GROUND LEASE WAS REGISTERED IN AC CORDANCE WITH SUBTITLE 13
115	115	7 OF THIS TITLE WHEN T HE LEASEHOLD TENANT APPLIED FOR THE ISSU ANCE OF A 14
116	116	REDEMPTION CERTIFICA TE, OF the notice given to the ground lease holder; and 15
117	117
118	118	(ii) Payment of a $20 fee, PAYMENT OF THE REDEM PTION 16
119	119	AMOUNT, and any expediting fee required under § 1–203 of the Corporations and 17
120	120	Associations Article. 18
121	121
122	122	(3) (i) On receipt of the items stated in paragraph (2) of this subsection, 19
123	123	the Department shall post notice on its website that application has been made to redeem 20
124	124	or extinguish the ground rent. 21
125	125
126	126	(ii) The notice shall remain posted for at least 90 days. 22
127	127
128	128	(4) Except as provided in paragraph (5) of this subsection, [a] IF A 23
129	129	GROUND LEASE WAS REG ISTERED IN ACCORDANC E WITH SUBTITLE 7 OF THIS TITLE 24
130	130	AT THE TIME OF APPLI CATION FOR A REDEMPTION CER TIFICATE, THE leasehold 25
131	131	tenant seeking to redeem [a] THE ground rent shall provide to the Department: 26
132	132
133	133	(i) Payment of [the redemption amount and] up to 3 years’ past due 27
134	134	ground rent to the extent required under this section and § 8–806 of this subtitle, in a form 28
135	135	satisfactory to the Department; and 29
136	136
137	137	(ii) An affidavit made by the leasehold tenant, in the form adopted 30
138	138	by the Department, certifying that: 31
139	139
140	140	1. The leasehold tenant has not received a bill for ground 32
141	141	rent due or other communication from the ground lease holder regarding the ground rent 33
142	142	during the 3 years immediately before the filing of the documentation required for the 34
143	143	issuance of a redemption certificate under this subsection; or 35 4 SENATE BILL 901
144	144
145	145
146	146
147	147	2. The last payment for ground rent was made to the ground 1
148	148	lease holder identified in the affidavit and sent to the same address where the notice 2
149	149	required under subsection (b) of this section was sent. 3
150	150
151	151	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 4
152	152	October 1, 2024. 5