• Real Property Article
  • August 10, 2017 | Authors: Neil J. Schechter; Timothy D. A. Chriss; David H. Fishman; Y. Jeffrey Spatz; Edward J. Levin; Seth M. Rotenberg; Searle E. Mitnick; William D. Shaughnessy; Peter B. Rosenwald; Danielle Stager Zoller
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • 1. Chapters 520 and 521 (SB 376/HB 595)

    Mortgages and Deeds of Trust - Prerequisites to Recording
    Real Property Article repealing and reenacting, with amendments Section 3–104(f)(1)

    Under existing law deeds, mortgages, and deeds of trust must contain a certification that the instrument was prepared by an attorney or a party to the instrument. These Acts amend this requirement, providing that a mortgage, deed of trust, assignment of a mortgage or deed of trust, or release of a mortgage or deed of trust does not need the preparation certification. Additionally, these Acts clarify that, with respect to preparation by an attorney, the attorney must be admitted to the Maryland Bar and that preparation “under the attorney’s supervision” includes review of the instrument by the certifying attorney.

    Effective October 1, 2017.

    2. Chapter 817 (HB 34)

    Real Property - Homeowners Associations - Resale of Lot - Inspection Fees
    Real Property Article repealing and reenacting, with amendments Section 11B–106

    This Act provides that, in addition to the maximum $250 fee and any related expedited service fees presently authorized by statute, a homeowners association may impose a reasonable fee of up to $50 for conducting an inspection in connection with the resale of a lot if the inspection is required by the governing documents of the homeowners association.

    Effective October 1, 2017.

    3. Chapter 480 (HB 789)

    Condominiums and Homeowners Associations - Amendment of Governing Documents
    Real Property Article repealing and reenacting, with amendments Section 11–104(e) and 11B–116

    This Act authorizes the council of unit owners of a condominium or a homeowners association (HOA) to amend the condominium bylaws or HOA governing document by, with respect to a condominium, the affirmative vote of unit owners in good standing having at least 60% of the votes in the council, or by a lower percentage if required in the bylaws, or with respect to an HOA, the affirmative vote of lot owners in good standing having at least 60% of the votes in the development, or by a lower percentage if required in the governing document. These provisions are applicable even if the respective governing documents of the condominium or HOA provide otherwise. The Act defines “in good standing” as not being more than 90 days in arrears in the payment of any assessment or charge due to the condominium or HOA. The Act does not apply to an HOA that issues bonds or other long-term debt secured in whole or in part by annual charges assessed in accordance with its governing document or to a village or community association affiliated with that HOA.

    Effective October 1, 2017.

    4. Chapter 481 (SB 809)

    Condominiums and Homeowners Associations - Sales of Common Elements and Common Areas
    Real Property Article adding Section 11–108(d) and 11B–106.2

    This Act requires that the governing body of a condominium or homeowners association (HOA) (or if control has not yet transitioned to unit owners or lot owners, the developer or declarant, as the case may be), in the event of a proposed sale (including a tax sale) of any common element or common area, to provide notice to the unit owners or lot owners no less than 30 days before the sale. The notice requirement may be satisfied by providing written notice to each unit owner or lot owner or by posting a specified sign on the property to be sold and, if the condominium or HOA has a website, providing notice on the website.

    Effective October 1, 2017.

    5. Chapters 348 and 349 (SB 875/HB 1048)

    Residential Property - Notice of Foreclosure
    Real Property Article repealing and reenacting, with amendments Section 7–105.2

    This Act provides that a person authorized to sell residential real property subject to a foreclosure must file with the Maryland Department of Labor Licensing and Regulation (DLLR) certain information concerning the property. The information provided to DLLR includes basic information, such as the property’s address, tax identification number, whether the property is vacant, and if known, the owner’s contact information. The new notice required under the Act must be filed within seven days of filing the foreclosure order to docket. DLLR will provide the form of the notice. The Act increases the compliance burden for the party conducting the foreclosure, but it should not prove to be overly burdensome.

    Delayed effective date of October 1, 2018.

    6. Chapters 347 and 346 (SB 247/HB 26)

    Real Property - Notices of Foreclosure Sale and Postponement or Cancellation of Foreclosure Sale
    Real Property Article repealing and reenacting, with amendments Section 7–105.2

    These Acts expand upon the existing written notice requirements necessary for a residential foreclosure sale. In addition to the existing duty to provide notice of the time, place, and terms of a foreclosure sale to the record owner of the subject property, the Acts require the person authorized to conduct a foreclosure sale to give written notice to a condominium or homeowners association that recorded a statement of lien under the Maryland Contract Lien Act at least 30 days before the proposed sale date. Additionally, in the event the foreclosure sale is postponed or cancelled, the person authorized to conduct the foreclosure sale must give notice of the postponement or cancellation within 14 days thereafter to the record owner and, if applicable, to the condominium or homeowners association. Under current law, the person conducting a foreclosure is not required to provide notice of the postponement or cancellation of a sale.

    Effective October 1, 2017. These Acts apply to any foreclosure sale scheduled to occur on or after the effective date.

    7. Chapters 617 (SB 1033/HB 702)

    Residential Property - Vacant and Abandoned Property - Expedited Foreclosure
    Real Property Article repealing and reenacting, with amendments Section 7–105.1(b); adding Section 7–105.14

    This Act sets forth procedures for secured parties to ask the court to proceed with an expedited foreclosure of abandoned or vacant residential real property. If the deed of trust has been in default for at least 120 days and the secured party can establish certain other indicia of abandonment (such as boarded up windows, disconnected utilities, the absence of furnishings, accumulated litter, or destruction or vandalism of the property), the secured party may petition the court for an expedited foreclosure. If the court grants the petition, then the secured party may proceed with an expedited foreclosure pursuant to which it avoids the usual requirements in a foreclosure of residential property, including possible mediation and certain notice requirements. Essentially, if the court grants the petition for immediate foreclosure, the foreclosure will proceed like a foreclosure of commercial real property rather than residential property.

    Practice Point: This Act will allow secured parties to avoid the extended amount of time and high expenses typically associated with foreclosure of residential abandoned properties. Importantly, taking the actions described in this Act is voluntary. A secured party may always follow the normal requirements for residential property foreclosures even if the property is vacant or abandoned.

    Effective October 1, 2017 and applies prospectively with no effect on any order to docket or complaint to foreclose filed before its effective date.

    8. Chapters 704 and 705 (SB 49/HB 851)

    Landlord and Tenant - Military Personnel - Limitation on Liability for Rent
    Real Property Article repealing and reenacting, with amendments Section 8–212.1

    These Acts provide for a limitation on liability under a residential lease for a person on active duty with the U.S. military who experiences a “change of assignment.” If a person on active duty with the U.S. military, or the person’s spouse, enters into a residential lease and the person subsequently receives a change of assignment, as defined in the Acts, any liability of the person or the person’s spouse under the lease is limited to the following: any rent or other lawful charges then due plus 30 days’ rent and the cost to repair any property damage caused by an act or omission of the tenant. The 30-day limit commences when written notice and proof of the change of assignment are given to the landlord. The provisions apply regardless of whether the change of assignment occurs before or after the property is occupied.

    Effective October 1, 2017.

    9. Chapter 542 (HB 44)

    Residential Property - Ground Lease Registration Forms - Contact Information Option
    Real Property Article repealing and reenacting, with amendments Section 8–704

    As a result of this law, the ground lease holder registration forms made available by the State Department of Assessments and Taxation (SDAT) will be revised to allow ground lease holders, at their option, to include their telephone number and email address.

    Effective October 1, 2017.

    10. Chapter 595 (SB 487)

    Baltimore City - Residential Ground Leases - Abandoned Property
    Real Property Article repealing and reenacting, with amendments Section 8–806(c)

    Under current law, recovery of delinquent ground rent on property in Baltimore City is limited to three years’ past-due ground rent if the property is owned or acquired by Baltimore City and is abandoned or distressed property as defined in the law. This Act prohibits a ground rent holder from bringing an action to recover back ground rent from a current leasehold owner if the prior leasehold owner failed to make all payments of ground rent and if the property is abandoned property, as defined in the Public Local Laws of Baltimore City. The bill also allows a ground rent holder of abandoned or distressed property to request in writing that the owner of the leasehold acquire the reversionary interest for the market value of such ground rent established at the time the leasehold owner acquired leasehold title.

    Effective October 1, 2017.