House Bill 511, Real Property - Residential Property - Ground Leases

on July 7, 2015
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On May 20, 2015, Governor Hogan passed my bill, House Bill (HB) 511, Real Property – Residential Property – Ground Leases, which I introduced to the Maryland General Assembly Legislative 435th Session. Historically, in December 2006, a series of articles in the Baltimore Sun described a dysfunctional ground rent system in which residential property was seized due to missed ground rent payments. Some of these ground rent payments were as little as $96.00 per year. Homeowners were being charged exorbitant legal fees and late fees, often resulting in the homeowner losing their home worth hundreds of thousands of dollars because of the late ground rent fees for under $100.00 per year

HB 511 repeals a provision of law that makes the establishment of a lien, the remedy for nonpayment of a ground rent on residential property and reinstates, with modifications, an action for possession as the remedy, similar to the posture of the law before 2007. The bill also (1) prohibits the holder of a ground lease from bringing an action against a tenant unless the ground lease is registered; (2) prohibits the use of self-help to take possession of residential property; (3) allows for a holder of a security interest in a property subject to a ground lease to apply to redeem the reversion; (4) specifies and places limits on the expenses for which a ground lease holder may be reimbursed in an ejectment action; (5) adds new requirements for notice and service of process on a leasehold tenant; and (6) clarifies that recovery of a maximum of three years past-due ground rent is calculated from the date a specified notice was sent.

If you have any questions about HB 511, please feel free to call my office at 301-858-3310. Thanks!

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