SUMMARY OF 2013
REAL ESTATE LEGISLATION
Maryland Association of REALTORS@
AFFORDABLE HOUSING AND TAXES
HB 71 Homann/nefs Insurance Underwriting Based on Geographic Area
Requires insurance carriers who underwrite horneowner’s policies and exclude risks based on
geographic areas to obtain the approval ofthe Insurance Commissioner for those exclusions
and to have a mitten underwriting standard describing the exclusion.
HB 88/SB 199 – Real Property Refinance Mortgage Priority over Junior Liens
STATUS: PASSED » Effective October 1, 2013
Authorizes homeowners to refinance a ñrst mortgage Without obtaining permission from the
lender that funded a home equity loan or second mortgage. The bill applies to current
mortgages as long as the retìnanoing occurs after the effective date.
1″HB 128/SB 1.58 H Homestead Tax Credit Eligibility Verification and Application
STATUS: PASSED Effective April 9, 2013
Extends by one year the time frame for property owners to apply for the Homestead Tax
Credit. Properties that have not been transferred after December 31, 2007 can now apply for
the Homestead Tax Credit by December 30, 2013 (Deo. 31St is a furlough day for state
employees) rather than December 31, 2012.
HB 235 – Property Tax – Valuation of Residential Real Property Database
STATUS: PASSED October 1, 2013
Requires the State Department of Assessments and Taxation (SDAT) to maintain an
accessible database on its website providing information related to a property’s square
footage, bathrooms, and the date ofthe initial assessment of new improvements.
SB 970 – Private Property Rights Regulatory Infringement Compensation
STATUS: NOT PASSED
Provided property owners with a cause of action if regulations promulgated by certain state
agencies diminished a property’s value. The state agencies would be liable only if those
agencies could not demonstrate that their action was necessary to comply with federal law.
PROPERTY MANAGEMENT
HB 45/SB 337 Real Property – Residential Leases – Interest on Security Deposits
STATUS: NOT PASSED
Required landlords to return security deposits with an interest rate of 1.5% or a rate equal t0
the U.S. Treasury Daily Yield Curve Rate, Whichever is higher.
HB 78/SB 160 Civil Actions Personal Injury or Death Caused by Dog – Rebuttable
Presumption
Reversed the Court of Appeals decision on pit bulls so that landlords do not have “strict
liability” for do g bites caused by their tenants. The bill also created a rebuttable presumption
for dog owners rather than the “strict liability” imposed by the case.
HB 315 – Residential Leases Rent Stabilization and Just Cause Evictions
Established state-Wide rent control limiting how much rents can be increased for current
tenants. The bili also would have provided a more difñcuit standard to meet when evieting
tenants.
HB ÖGB/SB 487 w Human Relations Housing Discrimination – Source of Income
STATUS: DEFEATED
Established “source of income” as a protected class under Maryland law.
HB 754 Environment- Reduction of Lead Risk in Housing – Qualified Offer
STATUS: NOT PASSED
Created a qualiñed under Maryland law designed to meer the concerns expressed by the
Maryland Court of Appeals in its ease Jackson v. Beckman. Damages were capped at
$100,000, a signiñeantly higher amount than the $17,000 cap under the 01d law.
HB 923 Certificate of a Qualified Expert – Lead Paint Poisoning Claims
STATUS: NOT PASSED
Required courts to dismiss a iead paint poisoning claim if the plaintiff failed to a
certificate of a qualified expert.
HB 263/SB 144 – Property Tax Credit Historically and Architecturally Valuable
Property
STATUS: PASSED – Effective June 1, 2013, applicable to tax years after June 30, 2013
Authorizes local governments to increase ñorn 10 to 25 percent the tax credit for the
restoration or preservation of a historic or architecturally valuable property.
*HB 378 – Maryland Agricultural Land Preservation Fund Easement Restriction
Reimbursement
STATUS: PASSED – Effective July 1, 2013
Authorizes the Maryland Agricultural Land Preservation Fund (MALPF) Board of Trustees
and the Comptroller to reimburse certain property owners for lots those owners subject to
MALPF easement restrictions. Applies in situations when a lot owner pays to release a lot
from easement restrictions but then places the lot back under the easement.
HB 621/SB 627 Maryland Energy Administration Regulated Sustainable Energ
Contract Program
STATUS: PASSED July 1, 2013
Authorizes contractors to enter into an agreement with consumers to pay for energy
improvements. The contracts are subject to specific payment requirements and may, in some
instances, be recorded in the land records. Requires the approval ofthe mortgage holder to
agree to the terms of the sustainable energy contract.
695 Homeowner’s Insurance Anti-Concurrent Causation Clause Prohibited
STATUS: PASSED – Effective for all policies issued, delivered or renewed on or after
October 1, 2013
Requires an insurer to provide a clear notice to a consumer regarding an anti-concurrent
coverage (ACC) clause in policies. An ACC clause provides that if loss is caused by both
covered and non-covered events, the loss claim Will not be paid.
HB 965 – Homestead Tax Credit Eligibility Definition of Legal Interest
STATUS: NOT PASSED
Allowed a settler, grantor or beneficiary of a property held in trust who is residing in the
property at no cost to claim the homestead tax credit.
HB 1208 Bay Restoration Fee Exemption m Oli-Site Sewage Disposal System Using
Best Available Technology
Exempted property owners from the Bay Restoration fee if the owners had to install Best
Available Technology (BAT) septic systems.
REAL ESTATE BROKERAGE AND CONTRACTS
HB 40 Residential Property Sales Disclosure of Utility Consumption
Specified that sellers display or make available to buyers information regarding monthly costs
for electric, gas, and home heating oil.
I-IB 291/813 383 Real Property Maryland Mortgage Relief Services Act
STATUS: PASSED Effective July 1, 2013
Provides state government with authority to enforce violations of federal regulations
controlling the activities of mortgage assistance relief service providers. Also gives Maryland
consumers a private right of action. The current federal regulations require clear disclosures
to consumers and specific rules on how and when payments may be collected.
HB S40/SB 189 – Residential Real Property Sales Property Tax Disclaimer
Required a notice in the Seller Disclosure and Disclaimer form stating that the buyer’s
property tax bill may be significantly different than the seller’s current bill and that the buyer
should contact local government to estimate the future tax bill.
HB ’TSS/SB 375 – Commercial Law Maryland Credit Services Businesses Act Scope
STATUS: PASSED Effective Date October 1, 2013
Clariiies that licensed real estate associate brokers and salespersons are not required to obtain
a credit services license in order to provide real estate brokerage services. Only real estate
brokers had been exempted from the original law thus potentially exposing agents to
regulation when assisting a home owner who is at risk of foreclosure.
HB 917 Real Property Property Used for Methamphetamine Production
Disclosures and Quarantine
Established a process for remediating properties that had been contaminated by a
methamphetamine laboratory. The bill would have established a quarantine period for the
property as Well a disclosure requirement before the property could be resold.
HB 1008 Real Property – Foreclosure Mortgage Foreclosure Property Values
Protection Act of 2013
Required a purchaser of foreclosure property to record the deed Within 60 days ofthe
ratification of sale or require Certain information regarding the purchaser of the property to be
recorded in the Íand records.
HB 1048 Real Property Sale of Property – Lead-Contaminated Dust Test Required
STATUS: DEFEATEI)
Required a seller of pre«l97 8 properîy to conduct a lead dust test ofthe property at. least 7 days prior
to settlement. ’The bill would have given the purchaser the right to waive the clust test.
HB ISGS/SB 642 – Residential Property – Prohibition on Nonjudicial Evictions
STATUS: PASSED Effective June 1, 2013
Prohíbits nonjudicial evictions in foreclosures and rentals (including mobile home parks)
except when the property is abandoned.
HB £554 Real Property Disclosure Requirements – Death by Other than Natural
Causes
Required home sellers to inform buyers about whether a death or felony occurred on a
property, effectively repealing most of Maryland’s stigmatized property law.
HB M13/SB 969 Public Safety Fire Protection and Prevention Residential Smoke
Alarms _
STATUS: PASSED – Effective July 1, 2013
Requires homeowners to disclose Whether the smoke detectors are over ten years old and
whether they use a ten-year battery as required under Maryland law by 2018. The
notice will be added to the current Seller Property Condition Disclosure Form. The
legislation also requires homeowners to update smoke detectors to newer sealed battery
systems if the smoke detectors are battery operated and are over 10 years old or malfunction
when tested. Smoke detectors that are hard-wired are also required to be updated every 10
years or when those systems malfunction. Finally, the legislation requires that at least one
smoke detector be located on every Hoor of a residence by 2018. ‘
COMMON OWNERSHIP COMMUNITIES
HB 286/SB 161 – Real Property Maryland Mortgage Assistance Relief Services Act
STATUS: Effective October 1, 2013
Limits certain foreclosure rights of Homeowner Associations (HOAS) and the Council of Unit
Owners for Condominiums (Condos). An HOA or Condo may not foreclose on a property if
the lien is comprised only of rines and/or attorney fees to collect those ñnes. HOAS and
Condos may only foreclose on alien comprised of delinquent assessments and/or attorney
fees to collect those assessments.
HB 576/SB 794 – Real Property – Regulation of Common Ownership Community
Managers
Required licensing of common ownership community managers. Common ownership
communities are condominiums and homeowner associations. The bill also would have
provided some exemptions from licensing for real estate licensees and other categories.
LAND-USE. PROPERTY RIGHTS, AND THE ENVIRONMENT
HB 706 Natural Resources Forest Preservation Act of 2013
STATUS: PASSED Effective October 1, 2013
Establishes a 40% goal for forest canopy in Maryland but does not mandate a compliance
timetable. The bill also directs the Department of Natural Resources to create a forest
resource inventory, and to provide technical assistance and guidance to local governments.
The bill provides some limited exemptions from the act for activities related to stream
restorations and projects in high growth areas with significant impervious surfaces.
HB 769/513 750 – Public Safety Maryland Building Performance Standards Local
Wind Design and Wind-Born Debris Standards
STATUS: PASSED H Effective October 1, 2013
Prohibits local governments from enacting changes to the Maryland Building Performance
Standards (MBPS) that weaken Wind design and Wind-borne debris standards.
HB 796ISB 427 Income Tax Credit Agricultural Land Diminution in Value of Real
Property
Established a tax credit to compensate property owners for the reduced Value of property due
to the restrictions ofthe Sustainable Growth Act and Nutrient Management Plans.
HB SOG/SB 524 Wetlands and Riparian Rights – Licenses and Permits for Nonwater»
Dependent Projects 0n State or Private Wetlands
STATUS: PASSED – Effective July 1, 2013
Establishes a permit and fee for nonwater~dependent projects located on piers over private and
state wetlands. The permit allows limited commercial activity on piers in conjunction with an
established business. The fee is based on a percentage ofthe business’s current property tax
bill.
SB 28 Real Property Blighted Property – Nuisance Abatement
Required owners of blighted property to up the properties or face a tine equal to a tripling
of the annual property taxes. An owner could avoid the by selling the property.
SB SOO/SB 973 Environment – Oil-Site Sewage Disposal Systems – Nitrogen Removal
Technology – Prohibition
Clarified that the Maryland Department of Environment (MDE) cannot require new and
existing homes outside ofthe critical areas to use Best Available Technology (BAT) Septic
Systems.
HB 924 – Environment _ Reduction of Lead Risk in Housing Applicability and
Registration Requirements ‘
Clarified that property owners With units built between 1950 -1978 must pay the $30
registration fee under the Reduction of Lead Risk in Housing Act but are not required to
participate in the program. Legislation passed last year requires these properties to pay the
fee and meet program requirements.
HB 947 Environment- Lead-Based Paint Damages Manufacturers of Lead Pigment
STATUS: DEFEATED
Created a “market-share” liability standard for lead paint pigment manufacturers. While this
legislation theoretically gave landlords the right to participate in suits against lead paint
manufacturers, it did not protect landlords from counter suits by the manufacturers.
HB 1067 – Environment Reduction of Lead Risk in Housing H Blood Lead Level
STATUS: DEFEATED
Lowered the trigger level for Mary1and’s lead paint law fiom 10 micrograms per deciliter to
only 5i
HB N90/SB 849 – Public Utilities Consumer Relations Tenant Payment 0f Landlord
Utility Bills
STATUS: PASSED – Effective January 1, 2014
Gives tenants, except those receiving service from an electric cooperative, the ability to create
a service account in their own name when faced with termination of service because the
landlord failed to pay the bill. The bill applies only to tenants receiving Service through a
single meter to a single dwelling unit. If the tenant establishes an account, the tenant may not
be billed for utility service by the landlord.
HB 1222 Real Property Landlord Defenses in Nuisance Actions
Provided a legal defense for landlords faced with a nuisance action if the tenant was the sole
cause of the nuisance action and the landlord had been making efforts to remove the tenant.
HB 1279/SB 902 Statewide Building Codes Maryland Accessibility Code
STATUS: PASSED – Effective October 1, 2013 l
Gives tenants a private right of action against a building owner if the building does not meet
accessibility requirements. The bill does not change a tenant’s current right to sue under the
Americans with Disabilities Act or Section 504 ofthe Federal Rehabilitation Act of 1973.
Before initiating a law suit, a tenant must give a building owner 30 days to propose a
compliance plan.
HB ISGS/SB 642 Residential Property – Prohibition on Nonj udicial Evictions
STATUS: PASSED – Effective June 1, 2013
Prohibits nonjudicial evictions in foreclosures and rentals (including mobile home parks),
except when the property is abandoned.
HB M13/SB 969 – Public Safety Fire Protection and Prevention Residential Smoke
Alarms
STATUS: PASSED Effective July 1, 2013
Requires landlords of one and two-dwelling units to upgrade battery smoke detectors to new,
ten-year battery, sealed units at change of occupancy or when those systems are ten years old
or malfunction. For buildings with more than two units, the legislation states that itis the
responsibility ofthe occupant to test the smoke alarms and notify the landlord, and that it is
the responsibility of the landlord to replace or repair the smoke alarm.
COMMERCIAL
HB 161 County Property Taxes – Classes of Property – Special Rates and Limits
STATUS: NOT PASSED
Authorized county governments and Baltimore City to impose different property tax rates for
any class of property. The rate for commercial property would have been limited to 1.25
percent ofthe residential rate.
HB 372/813 202 – Recordation and Transfer Taxes Transfer of Property Between
Related Entities Exemption
STATUS: PASSED Effective for instruments recorded after July 1, 2013
Exempts from transfer and recordation tax a transfer of real property between related
businesses and corporations such as parent companies and Wholly-owned subsidiaries.
HB 881 – Corporations and Associations Limited Liability Companies Company
Representative
Required Limited Liability Corporations (LLCs) to pay a fee and file paperwork designating a
company representative. The company representative Wo uld have been in addition to the
resident agent that LLCs already designate, but, unlike the resident agent, the company
representative would have had to be an actual person.
HB 1209ÍSB 436 F- Recordation Taxes Exemptions
STATUS: PASSED Effective July 1, 2013
Revises legislation passed last year that imposed recordation taxes on Indemnity Deeds of
Trust (IDOTS). Specifically, the bill increases the trigger for the recordation tax from $1
million to $3 million; clarifies that a series of loans falling below the trigger amounts can be
aggregated to determine the trigger level; and claríñes that the refinancing of an IDOT is not
taxable.
MISCELLANEOUS
HB 1156/813 819, HB 1182 Maryland Contributory Negligence Act
Established by statute that the defense of contributory negligence is Valid under Maryland
law. The Maryland Court of Appeals is currently considering a case that could overturn the
contributory negligence rule.
SB 829 – Transportation Trust Fund Financing Use of Funds
STATUS: PASSED Effective when approved by Maryland Voters in the 2014 Election
Proposes an amendment to the Maryland Constitution prohibiting the use ofthe transportation
trust fund for other purposes. The amendment requires the Governor to declare a fiscal
emergency in order to divert money from the Transportation Trust Fund, and requires the
diversion to be approved by a three-ñiths vote ofthe House and Senate.
*f Indicates a bill that has been signed by the Governor. All other bills listed have been
passed by the Maryland General Assembly and await the Governor’s signature to take
effect.
“Defeated” indicates bills opposed by MAR. “Not Passed” indicates bills that either
MAR did not oppose or bills that MAR opposed but which did not receive a vote.
