Bulletin: MD2017004

Dear Associates:

This Bulletin is a summary of legislation changes made by the Maryland General Assembly relating to real property.

House Bill 34: Homeowners Associations - Inspection Fee on Resale

Authorizes an HOA to charge 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 HOA.

Takes Effect October 1, 2017

Chapter 480 HB 789: Amendment of Governing Documents

Authorizes a condominium's council of unit owners to amend the bylaws by the affirmative vote of at least 60% of unit owners in good standing, or by a lower percentage if required in the bylaws.

Authorizes an HOA to amend the governing document by the affirmative vote of at least 60% of the votes in the development in good standing, or by a lower percentage if required in the governing document.

Good Standing is defined as not being more than 90 days in arrears in the payment of any assessment or charge due to the condominium or HOA.

Governing Document is defined as the declaration, bylaws, a deed and agreement, and recorded covenants and restrictions.

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 a declaration, or to a village or community association affiliated with that HOA.

Takes Effect October 1, 2017

Chapter 481 SB809: Common Ownership Communities

Notice of Sale of Common Elements and Common Areas

The governing body of a condominium or HOA, or if control has not yet transitioned to unit owners or lot owners, the developer or declarant, must give notice no less than 30 days before the sale, including a tax sale, of any common element or common area located on property that has been transferred to the condominium or HOA.

The notice requirement may be satisfied by:

Providing written notice to each unit owner or lot owner, or

Posting a specified sign on the property to be sold AND, if the condominium or HOA has a website, providing notice on the website.

Takes Effect October 1, 2017

SB 247 HB 26: Foreclosure Process

Requires the person authorized to make a sale in a residential foreclose action to give written notice of the proposed sale to a condominium or HOA that has recorded a lien against the property at least 30 days before the date of the proposed sale.

In the event of a postponement or cancellation of the foreclose sale, within 14 days after the postponement or cancellation, the trustee of the property shall provide written notice to the record owner and to a condominium or HOA that was notified of the foreclosure sale.

Takes Effect October 1, 2017

SB 1033 HB 702: Expedited Foreclosure of Vacant and Abandoned Property

A lender may petition the circuit court for an expedited foreclosure if the property is vacant and abandoned.

A residential property may be found to be vacant and abandoned if:

The mortgage or deed of trust on the property has been in default for 120 days or more;

No mortgagor or grantor has filed with the court an answer or objection that would preclude the court from entering a final judgment and a decree of foreclosure;

No mortgagor or grantor has filed with the court a written statement that the property is not vacant and abandoned; and

The court finds that at least three of the following circumstances are true (this is not an exhaustive list):

Utilities are disconnected;

Windows or entrances are boarded up or window panes are broken and unrepaired;

Doors are smashed, broken off, unhinged, or continuously unlocked;

Junk, litter, trash, debris, or hazardous, noxious, or unhealthy substances on the property;

There are no furnishings, window treatments, or personal items on the property;

The property has been vandalized, or there is loitering, criminal conduct, or physical destruction or deterioration of the property;

The borrower has stated in writing that he/she/they intend to abandon the property;

There is a determination that no owner or tenant appears to be residing in the property when the lender inspects the property;

Two or more citations have been issued for failure to maintain the property AND a health and safety issue exists that has not been rectified;

The property has been condemned by a county or municipal corporation; or

Other reasonable indicia of abandonment exists.

Taxes Effect October 1, 2017

Senate Bill 376: House Bill 595 Recordation of Mortgages and Deeds of Trust

Under current law, a deed, mortgage, or deed of trust may not be recorded unless it bears either a certification that the instrument was prepared by:

An attorney or under an attorney's supervision; or

One of the parties named in the instrument.

The law limits the applicability of current recordation requirements to only a deed other than a mortgage, deed of trust, or an assignment or release of a mortgage or deed of trust.

Additionally, a mortgage, deed of trust, or an assignment or release of a mortgage or deed of trust prepared by any attorney or one of the parties named in the instrument may be recorded without the required certification.

Takes Effect October 1, 2017

HB 44: Ground Lease Registration Form - Optional Contact Information

Modernizes the required contents of the ground lease registration form maintained by the State Department of Assessments and Taxation to include:

The ground leaseholder's telephone number and email address (optional).

Additionally, the form used to report changes or corrections to a ground lease may also include the ground leaseholder's telephone number and email address.

Takes Effect October 1, 2017

HB 487: Liability for Past-due Ground Rent on Abandoned Property in Baltimore City

Prohibits a ground leaseholder from bringing any suit, action, or proceeding against the current leasehold tenant to recover ground rent that was due from a former leasehold tenant, if the property is:

Owned or acquired by the current leasehold tenant by any means; and

Abandoned property as defined in the Public Local Laws of Baltimore City.

Allows the ground leaseholder, under certain circumstances, to request in writing that the current leasehold tenant acquire the reversionary interest under the ground lease for the established market value at the time the current leasehold tenant acquired the property.

Takes Effect October 1, 2017

SB 792/HB 754: Estates and Trusts

Clarifies that a trustee need not send notices required under the Maryland Trust Act to him/herself.

A trustee who is a qualified beneficiary of a trust can waive and does not have to provide himself or herself with an annual trustee's report or other information required to be furnished to qualified beneficiaries under the Act.

Takes Effect October 1, 2017

HB 753: Representatives of Trust Beneficiaries

Prohibits, except in specified circumstances, a person from serving as a representative of a trust beneficiary if that person also is serving as a trustee.

This prohibition may not be overridden by the terms of a trust.

Authorizes the settlor of a trust to:

Designate one or more persons to serve as a representative or successor representative of a trust beneficiary;

Designate one or more other persons who may designate a representative or successor representative of a trust beneficiary; and

Specify the order of priority among those persons designated to serve as a representative of a trust beneficiary.

Takes Effect October 1, 2017

SB73: Share of Intestate Estate- Surviving Spouse

Increase the initial share of a decedent's intestate estate that is inherited by a surviving spouse from $15,000 to $40,000 (plus one-half of the residue).

Takes Effect October 1, 2017

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