Bulletin: MD2015009

Dear Associates:

The 2015 Legislative session recently ended. With one exception, only minor changes were made to Maryland statutes affecting the title insurance industry.  

The exception is in the area of ground leases, for which the new “SUBTITLE 8 - RESIDENTIAL GROUND LEASES” was created as part of the Real Property Article. A separate Bulletin will be issued shortly that will be dedicated entirely to the new ground lease Article.

Two proposed statutes of major interest did not pass during this session:

1. Transfer On Death Deeds: The Maryland Land Title Association (MLTA) successfully worked with other industry organizations to defeat proposed “TOD” legislation. Although such legislation has successfully been introduced in approximately half of the States, it conflicts greatly with the long-established Maryland reliance upon life estate deeds (both with and without powers) to transfer property upon death of the life estate tenant.

2. Quiet Title: Although a proposed quiet title bill was unsuccessful in 2015, MLTA laid the groundwork for passing such legislation in 2016. It will bring together case law and differing court practices in various Maryland jurisdictions, and combine them into a single, comprehensive statute to guide attorneys and their clients.

Here is a summary of other statutes of interest:

BILLS EFFECTIVE JUNE 1, 2105:

HB 123 (Chap. 68) - BALTIMORE CITY - RESIDENTIAL RETENTION PROPERTY TAX CREDIT - MODIFICATION:

Tweaks the 2014 bill allowing a city resident to “carry over” a homestead tax credit to a newly-purchased city residence.

HB 511 (Chap. 428) - REAL PROPERTY - RESIDENTIAL PROPERTY - GROUND LEASES:

This is in response to the Maryland Court of Appeals case STATE VS. GOLDBERG, et al., 437 MD 191 (2014), which held that provisions of Chap. 286 of 200 were unconstitutional , and restores ejectment as a remedy. 

HB 935 (Chap. 289) - PRINCE GEORGE’S COUNTY - TAX SALES - FORECLOSURE FOR ABANDONED PROPERTY:

When Prince George’s County becomes holder of a tax sale certificate of abandoned property, it may file to foreclose all rights of redemption at any time after the sale.

BILLS EFFECTIVE JULY 1, 2015:

HB 1035 (Chap. 114) - BALTIMORE CITY - TAX SALES:

Requires Baltimore City to withhold owner-occupied residential property from a tax sale if total taxes owed (including interest & penalties) amount to less than $750. Also increases minimum threshold from $350 to $750 before owner-occupied residential property can be sold to enforce a lien for unpaid water/sewer charges. Creates numerous changes in notice requirements/costs/charges for owner-occupied residential properties. Allows the City to establish an installment payment method for owners of residential property to be redeemed from tax sale.

SB 863 (Chap. 124) - WATERSHED PROTECTION AND RESTORATION PROGRAMS - REVISIONS:

The following jurisdictions are subject to the Watershed/Restoration Program mandates: Anne Arundel Co.; Baltimore City; Baltimore County; Carroll Co.; Charles Co.; Frederick Co.; Harford Co.; Howard Co.; Montgomery Co. & Prince George’s Co.

Repeals the State mandate for these counties to collect a storm water remediation fee, but allows them to do so. The counties are still required to establish Watershed Protection and restoration Programs, but can fund them internally. The counties will be required to file annual reports with MDE to show compliance with the federal mandates. Fees established before 7/1/13 may be repealed or reduced before 7/1/16 provided the county identifies funds that will be deposited into its local watershed protection/restoration fund.

BILLS EFFECTIVE OCTOBER 1, 2015:

HB 49 (Chap. 57) - CLERKS OF CIRCUIT COURTS - WATER AND SEWER LIEN REGISTERS - FEES:

Prohibits Circuit Court Clerks from charging a fee for recording/indexing water/sewer liens.

HB 600 (Chap. 440) - ST. MARY’S COUNTY - PROPERTY MAINTENANCE - VOLUNTARY AGREEMENTS:

Allows St. Mary’s Co. to enter a voluntary agreement with owner of real property to allow the Co.to remediate  a nuisance. The agreement may provide for repayment of costs – any unpaid costs may be enforced by filing a lien against the property. Such a lien would have the same priority and be collected in the same manner as co. real property taxes. The Co. is required to file a notice of lien in the land records.

CAUTION:

Since “voluntary agreements” will not be recorded in the land records at the time they are executed, they could result in a hidden lien! It is possible that the Co. could elect to establish a lien after a property has transferred. We tried to get this resolved during the session, but ran out of time. We will try to get it amended next year, but in the meantime you’ll need to question property owners.

HB 666 (Chap. 100) - MARYLAND TRUST ACT - REVOCABLE TRUSTS - CREDITORS CLAIMS – LIMITATIONS:

Requires creditors/claimants against the estate of a settler of a revocable trust to file their claims in the estate in a timely manner. If an estate is note opened, the trustee may publish a notice (statutory form included) 3 times in a local paper – this will protect the trust property, trustees and beneficiaries against claims presented more than 6 months after date of publication of first notice.

HB 703 (Chap. 450) - ESTATES AND TRUST - MARYLAND TRUST ACT - INCAPACITY:

Adds definition of INCAPACITY to Sec. 14.5-103 of Estates and Trust Art. : Inability of an individual to manage their property/financial affairs due to:

1.       Physical/mental disability

2.       Disease/illness

3.       Habitual drunkenness

4.       Drug addiction

5.       Imprisonment

6.       Compulsory hospitalization

7.       Confinement

8.       Detention by foreign powers

9.       Disappearance.

HB 1028 (Chap. 113) - BUSINESS OCCUPATIONS AND PROFESSIONS - REAL ESTATE SALES PERSONS AND BROKERS - FORMATION OF BUSINESS ENTITIES AND PAYMENT OF COMMISSIONS:

Allows  real estate sales persons or associate brokers to form any business entity authorized under Maryland law and have commissions paid to the business entity.

SB 77 (Chap. 8) - COMMERCIAL LAW - SECURED TRANSACTIONS - FALSE RECORDS:

Prohibits the filing/recording of a false financing statement with SDAT. Authorizes the filing office to terminate the financing statement if the office has reason to believe it is false. Authorizes a debtor to request termination of false statements. Requires SDAT to adopt regs to implement the bill. Does not apply to a financing statement that is a mortgage or deed of trust. 

Portions of this Bulletin are copied by permission of the Maryland Land Title Association.

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