Maryland Real Estate Legislative Updates

Maryland Real Estate Legislative Update 2021-22

• Maryland real estate legislation laws regulate and govern the real estate industry in Maryland, covering topics such as licensing, transactions, fair housing, anti-discrimination, property management, environmental regulations, and disclosure requirements.

• Maryland has specific laws and regulations for real estate and property management, including rental agreements, security deposits, lease termination, landlord and tenant obligations, record-keeping, property transfer, and zoning requirements.

• Certain real estate documents, such as deeds and mortgages, must be accompanied by a certificate of preparation signed by either an attorney or a party to the instrument to ensure validity and proper execution.

• HB stands for House Bill, while SB stands for Senate Bill, both types of legislation introduced in the Maryland General Assembly.

• HB 90/SB 687 requires DHCD and local governments to report every 5 years on their efforts to promote fair housing choice and racial and economic integration under the AFFH Rule.

• HB 97/SB 66 creates the Office of Statewide Broadband to connect 98% of households in Maryland to fast internet by January 1, 2026, and offers a capacity building grant program to local governments and nonprofits.

• HB 252 allows local governments to withhold owner-occupied residential property from a tax sale to protect homeowners from losing their homes due to unpaid property taxes.

• HB 815 clarifies that agricultural transfer tax rate changes passed in 2019 do not apply to real estate transactions involving agriculture if the contract was signed before the effective date of the bill but the settlement took place after.

• HB 852 establishes the Homeowner Protection Program, which allows eligible homeowners to participate for up to 3 years and work with an ombudsman to place them on a more sustainable path.

• HB 1178 allows first-time homebuyers to open a tax-free savings account of up to $50,000 for any down payment or closing costs listed on the settlement sheet.

• HB 1239/SB 859 creates a grant program for builders who build or remodel property in low-income areas and requires DHCD to study discrimination in real estate financing, appraisals, and community investments and report back to the Legislature.

• HB 1328/SB 824 allows counties to make it easier and cheaper for companies to build broadband internet infrastructure by sharing trenches and waiving fees and requires state highway projects to allow broadband infrastructure to be installed when roads are being built or repaired.

• SB 787 clarifies certain tax laws related to digital products and advertising, specifying that certain professional instruction services are not subject to sales tax and that the digital advertising tax cannot be passed down to customers through a separate fee.Summary of New Maryland Real Estate Laws

• HB 399 requires buyers of real estate in certain Maryland counties to be informed if the property is located in a zone of dewatering influence, which is susceptible to sinkholes.

• HB 610 requires that residential real estate contracts inform buyers about the Homestead Tax Credit and eligibility for it.

• HB 1213 directs lenders to consider verifiable indications of creditworthiness, such as payment history, when evaluating primary residential mortgage loan applications.

• HB 110/SB 144 allows residents of multifamily units to install and use electric vehicle recharging equipment in their designated parking spaces.

• HB 248 clarifies that homeowner's associations or condominiums cannot unreasonably restrict a homeowner's ability to hire a private company to collect organic waste materials for composting.

• HB 593/SB 535 outlines a process for scheduling subsequent meetings when a quorum is not present at a Board of Directors meeting for a common ownership community.

• HB 1023/SB 686 allows common ownership communities to conduct virtual meetings using specific technology platforms.

• HB 322 prohibits unreasonable restrictions of low-impact landscaping practices, such as rain gardens and wildlife habitats, on residential properties.

• HB 407/SB 22 requires a state license for a Wastewater Property Transfer Inspection for on-site sewage disposal systems during property transfers.

• HB 18/SB 154 grants residential tenants who earn up to 50% of the median income the right to access legal counsel during eviction proceedings.

• HB 104/SB 401 extends the notice period from 30 to 60 days for nonrenewal of residential leases less than a year, while leases of one year or more remain at 90 days.

• HB 861/SB 691 allows tenants to use "reusable" tenant screening reports if accepted by a landlord, and prohibits landlords from charging a rental application fee if they accept such reports.Summary of 2022 Real Estate Legislation in Maryland

• The new Maryland tenant screening law allows tenants to use reusable screening reports and prohibits landlords from charging rental application fees if they accept such reports.

• HB 1069 requires landlords of residential rental properties using well water to test the water every three years, and if contaminated, provide potable water or remediate the contamination, or let tenants terminate the lease. Failure to comply may result in a fine of up to $1,000.

• HB 719/SB 582 specifies that personal liability clauses in commercial leases are unenforceable if the default occurred between March 23, 2020, and September 30, 2020, inclusive, and the tenant was ordered to cease operations during the COVID-19 State of Emergency, or their business was not designated as essential.

• HB 69/SB 247 requires the State Department of Assessments and Taxation (SDAT) to publish an explanation of the methodology used to determine property values on its website and clarifies the type of information that an Appeals Authority may use when reviewing a property's value.

• HB 108/SB 524 aims to reduce energy use by 0.4% each year for certain lower-income individuals in Maryland and requires the Department of Housing and Community Development to plan and implement assistance programs to achieve these goals.

• HB 203/SB 197 permits SDAT to apply the Homestead Property Tax Credit retroactively in situations where a homeowner failed to apply for the credit in the previous year.

• HB 204/SB 181 extends the deadline for homeowners to apply for the Homeowner Property Tax Credit by one year, applying to first-time applicants or applicants who have filed for the credit in each of the three years before the current year.

• HB 449 permits renters over age 70 to apply retroactively for the Renters Tax Credit within three years of eligibility.

• HB 483 requires the Comptroller to identify property owners who may have been eligible for the Homestead Tax Credit but failed to file an income tax return in the last three years and help them apply for the credit.

• HB 809/SB 976 establishes a process for eligible individuals to apply for the disabled veteran property tax exemption prior to purchase and have the benefit of the tax credit calculated in their loan payments and closing costs.

• HB 927/SB 744 allocates up to $30 million to the Maryland Rental Housing Fund, creates a process for reviewing excess or surplus state-owned property suitable for conversion to workforce or affordable housing, and allows the sale or donation of the property to a nonprofit organization or developer.

• HB 1186 enables county governments to expand a property tax credit to elderly individuals, veterans, and surviving spouses by eliminating caps on how long the credit may be granted and how much it may exceed a property owner's current tax liability.Overview of New Maryland Real Estate Laws

• Maryland has passed several new laws affecting real estate, including changes to personal property tax exemptions, commission payments for real estate agents, and dispute resolution processes for HOAs.

• Under the new personal property tax exemption law, businesses will not have to pay taxes on the first $20,000 worth of equipment and other business property they own, and the state cannot require businesses to file a tax return if they are claiming this exemption.

• The commission payment law clarifies that title companies may pay compensation to a real estate licensee on behalf of the real estate broker according to a written disbursement authorization provided by the broker.

• The new law on notarial acts increases the fees that notaries may charge for in-person and remote notarizations and clarifies certain procedures regarding remote notarizations, including its application to wills and trusts.

• The partition of property law provides additional protections to joint tenants whose property is being sold through a partition sale, including better disclosures, a market rate appraisal of the property, and the opportunity to purchase the property.

• The new law on continuing education courses for real estate brokers, salespersons, and associate brokers allows Zoom-type classes to use a written affidavit to verify the identity of class participants instead of requiring them to show a picture ID on video at the beginning of the course.

• The task force on property appraisal and valuation equity will examine issues related to property appraisal and valuation equity and report its findings to the Governor and the General Assembly by October 31, 2023.

• The new law on reserve studies requires housing cooperatives, condominiums, and homeowners associations outside of Montgomery and Prince George's County to conduct reserve studies to ensure they have enough funds set aside to cover the cost of major repairs or replacements of shared property or infrastructure.

• The new law on dispute settlement provides a process for resolving disputes in homeowners associations (HOAs) that is similar to the process that already exists for resolving disputes in condominiums.

• The new law on on-site wastewater services creates a board to regulate people who provide on-site wastewater services in Maryland to ensure that these services are done safely and correctly.

• The new law on permit applications creates an Environmental Justice (EJ) Score for projects that apply for certain state permits and requires owners of affected buildings to measure and report emissions to the Maryland Department of Environment starting in 2025.

• The Climate Solutions Now Act of 2022 sets broad goals for Maryland to achieve net-zero greenhouse gas emissions by 2045 and requires certain buildings to reach net-zero greenhouse gas emissions by 2040.

• Landlord and tenant laws were also updated, including provisions related to rent increases and security deposits.

Maryland Real Estate Legislative Update 2021-22

• Maryland real estate legislation laws regulate and govern the real estate industry in Maryland, covering topics such as licensing, transactions, fair housing, anti-discrimination, property management, environmental regulations, and disclosure requirements.

• Maryland has specific laws and regulations for real estate and property management, including rental agreements, security deposits, lease termination, landlord and tenant obligations, record-keeping, property transfer, and zoning requirements.

• Certain real estate documents, such as deeds and mortgages, must be accompanied by a certificate of preparation signed by either an attorney or a party to the instrument to ensure validity and proper execution.

• HB stands for House Bill, while SB stands for Senate Bill, both types of legislation introduced in the Maryland General Assembly.

• HB 90/SB 687 requires DHCD and local governments to report every 5 years on their efforts to promote fair housing choice and racial and economic integration under the AFFH Rule.

• HB 97/SB 66 creates the Office of Statewide Broadband to connect 98% of households in Maryland to fast internet by January 1, 2026, and offers a capacity building grant program to local governments and nonprofits.

• HB 252 allows local governments to withhold owner-occupied residential property from a tax sale to protect homeowners from losing their homes due to unpaid property taxes.

• HB 815 clarifies that agricultural transfer tax rate changes passed in 2019 do not apply to real estate transactions involving agriculture if the contract was signed before the effective date of the bill but the settlement took place after.

• HB 852 establishes the Homeowner Protection Program, which allows eligible homeowners to participate for up to 3 years and work with an ombudsman to place them on a more sustainable path.

• HB 1178 allows first-time homebuyers to open a tax-free savings account of up to $50,000 for any down payment or closing costs listed on the settlement sheet.

• HB 1239/SB 859 creates a grant program for builders who build or remodel property in low-income areas and requires DHCD to study discrimination in real estate financing, appraisals, and community investments and report back to the Legislature.

• HB 1328/SB 824 allows counties to make it easier and cheaper for companies to build broadband internet infrastructure by sharing trenches and waiving fees and requires state highway projects to allow broadband infrastructure to be installed when roads are being built or repaired.

• SB 787 clarifies certain tax laws related to digital products and advertising, specifying that certain professional instruction services are not subject to sales tax and that the digital advertising tax cannot be passed down to customers through a separate fee.Summary of New Maryland Real Estate Laws

• HB 399 requires buyers of real estate in certain Maryland counties to be informed if the property is located in a zone of dewatering influence, which is susceptible to sinkholes.

• HB 610 requires that residential real estate contracts inform buyers about the Homestead Tax Credit and eligibility for it.

• HB 1213 directs lenders to consider verifiable indications of creditworthiness, such as payment history, when evaluating primary residential mortgage loan applications.

• HB 110/SB 144 allows residents of multifamily units to install and use electric vehicle recharging equipment in their designated parking spaces.

• HB 248 clarifies that homeowner's associations or condominiums cannot unreasonably restrict a homeowner's ability to hire a private company to collect organic waste materials for composting.

• HB 593/SB 535 outlines a process for scheduling subsequent meetings when a quorum is not present at a Board of Directors meeting for a common ownership community.

• HB 1023/SB 686 allows common ownership communities to conduct virtual meetings using specific technology platforms.

• HB 322 prohibits unreasonable restrictions of low-impact landscaping practices, such as rain gardens and wildlife habitats, on residential properties.

• HB 407/SB 22 requires a state license for a Wastewater Property Transfer Inspection for on-site sewage disposal systems during property transfers.

• HB 18/SB 154 grants residential tenants who earn up to 50% of the median income the right to access legal counsel during eviction proceedings.

• HB 104/SB 401 extends the notice period from 30 to 60 days for nonrenewal of residential leases less than a year, while leases of one year or more remain at 90 days.

• HB 861/SB 691 allows tenants to use "reusable" tenant screening reports if accepted by a landlord, and prohibits landlords from charging a rental application fee if they accept such reports.Summary of 2022 Real Estate Legislation in Maryland

• The new Maryland tenant screening law allows tenants to use reusable screening reports and prohibits landlords from charging rental application fees if they accept such reports.

• HB 1069 requires landlords of residential rental properties using well water to test the water every three years, and if contaminated, provide potable water or remediate the contamination, or let tenants terminate the lease. Failure to comply may result in a fine of up to $1,000.

• HB 719/SB 582 specifies that personal liability clauses in commercial leases are unenforceable if the default occurred between March 23, 2020, and September 30, 2020, inclusive, and the tenant was ordered to cease operations during the COVID-19 State of Emergency, or their business was not designated as essential.

• HB 69/SB 247 requires the State Department of Assessments and Taxation (SDAT) to publish an explanation of the methodology used to determine property values on its website and clarifies the type of information that an Appeals Authority may use when reviewing a property's value.

• HB 108/SB 524 aims to reduce energy use by 0.4% each year for certain lower-income individuals in Maryland and requires the Department of Housing and Community Development to plan and implement assistance programs to achieve these goals.

• HB 203/SB 197 permits SDAT to apply the Homestead Property Tax Credit retroactively in situations where a homeowner failed to apply for the credit in the previous year.

• HB 204/SB 181 extends the deadline for homeowners to apply for the Homeowner Property Tax Credit by one year, applying to first-time applicants or applicants who have filed for the credit in each of the three years before the current year.

• HB 449 permits renters over age 70 to apply retroactively for the Renters Tax Credit within three years of eligibility.

• HB 483 requires the Comptroller to identify property owners who may have been eligible for the Homestead Tax Credit but failed to file an income tax return in the last three years and help them apply for the credit.

• HB 809/SB 976 establishes a process for eligible individuals to apply for the disabled veteran property tax exemption prior to purchase and have the benefit of the tax credit calculated in their loan payments and closing costs.

• HB 927/SB 744 allocates up to $30 million to the Maryland Rental Housing Fund, creates a process for reviewing excess or surplus state-owned property suitable for conversion to workforce or affordable housing, and allows the sale or donation of the property to a nonprofit organization or developer.

• HB 1186 enables county governments to expand a property tax credit to elderly individuals, veterans, and surviving spouses by eliminating caps on how long the credit may be granted and how much it may exceed a property owner's current tax liability.Overview of New Maryland Real Estate Laws

• Maryland has passed several new laws affecting real estate, including changes to personal property tax exemptions, commission payments for real estate agents, and dispute resolution processes for HOAs.

• Under the new personal property tax exemption law, businesses will not have to pay taxes on the first $20,000 worth of equipment and other business property they own, and the state cannot require businesses to file a tax return if they are claiming this exemption.

• The commission payment law clarifies that title companies may pay compensation to a real estate licensee on behalf of the real estate broker according to a written disbursement authorization provided by the broker.

• The new law on notarial acts increases the fees that notaries may charge for in-person and remote notarizations and clarifies certain procedures regarding remote notarizations, including its application to wills and trusts.

• The partition of property law provides additional protections to joint tenants whose property is being sold through a partition sale, including better disclosures, a market rate appraisal of the property, and the opportunity to purchase the property.

• The new law on continuing education courses for real estate brokers, salespersons, and associate brokers allows Zoom-type classes to use a written affidavit to verify the identity of class participants instead of requiring them to show a picture ID on video at the beginning of the course.

• The task force on property appraisal and valuation equity will examine issues related to property appraisal and valuation equity and report its findings to the Governor and the General Assembly by October 31, 2023.

• The new law on reserve studies requires housing cooperatives, condominiums, and homeowners associations outside of Montgomery and Prince George's County to conduct reserve studies to ensure they have enough funds set aside to cover the cost of major repairs or replacements of shared property or infrastructure.

• The new law on dispute settlement provides a process for resolving disputes in homeowners associations (HOAs) that is similar to the process that already exists for resolving disputes in condominiums.

• The new law on on-site wastewater services creates a board to regulate people who provide on-site wastewater services in Maryland to ensure that these services are done safely and correctly.

• The new law on permit applications creates an Environmental Justice (EJ) Score for projects that apply for certain state permits and requires owners of affected buildings to measure and report emissions to the Maryland Department of Environment starting in 2025.

• The Climate Solutions Now Act of 2022 sets broad goals for Maryland to achieve net-zero greenhouse gas emissions by 2045 and requires certain buildings to reach net-zero greenhouse gas emissions by 2040.

• Landlord and tenant laws were also updated, including provisions related to rent increases and security deposits.