Section 14-117 - Contracts for sale of property. - Maryland Statutes

§ 14-117. Contracts for sale of property.
 

(a)  Definitions; applicability; notice.-  

(1) (i) In this subsection the following words have the meanings indicated. 

(ii) "Ground lease" means a residential lease or sublease for a term of years renewable forever subject to the payment of a periodic ground rent. 

(iii) 1. "Ground lease holder" means the holder of the reversionary interest under a ground lease. 

2. "Ground lease holder" includes an agent of the ground lease holder. 

(iv) "Ground rent" means a rent issuing out of, or collectible in connection with, the reversionary interest under a ground lease. 

(v) "Leasehold interest" means the tenancy in real property created under a ground lease. 

(vi) "Leasehold tenant" means the holder of the leasehold interest under a ground lease. 

(2) (i) This subsection applies to residential property that was or is used, intended to be used, or authorized to be used for four or fewer dwelling units. 

(ii) This subsection does not apply to property: 

1. Leased for business, commercial, manufacturing, mercantile, or industrial purposes, or any other purpose that is not primarily residential; 

2. Improved or to be improved by any apartment, condominium, cooperative, or other building for multifamily use of greater than four dwelling units; or 

3. Leased for dwellings or mobile homes that are erected or placed in a mobile home development or mobile home park. 

(3) A contract for the sale of real property subject to a ground rent shall contain the following notice in boldface type, at least as large as 14 point, in substantially the following form: 
   
"NOTICE REQUIRED BY MARYLAND LAW REGARDING YOUR GROUND RENT   

This property (address) is subject to a ground lease. The annual payment on the ground lease ("ground rent") is $(dollar amount), payable in yearly or half-yearly installments on (date or dates). 
 

The next ground rent payment is due (day, month, year) in the amount of $(dollar amount). 
 

The payment of the ground rent should be sent to: 
 

(name of ground lease holder) 
 

(address) 
 

(phone number) 
 

NOTE REGARDING YOUR RIGHTS AND RESPONSIBILITIES UNDER MARYLAND LAW: 
 

As the owner of this property, you are obligated to pay the ground rent to the ground lease holder. It is also your responsibility to notify the ground lease holder if you change your address or transfer ownership of the property. 
 

If you fail to pay the ground rent on time, you are still responsible for paying the ground rent. In addition, the ground lease holder may take action to collect the past due ground rent which may result ultimately in your loss of the property. Please note that under Maryland law, a ground lease holder may demand not more than 3 years of past due ground rent. If you fail to pay the ground rent on time, you should contact a lawyer for advice. 
 

As the owner of this property, you are entitled to redeem, or purchase, the ground lease from the ground lease holder and obtain absolute ownership of the property. The redemption amount is fixed by law but may also be negotiated with the ground lease holder for a different amount. For information on redeeming the ground lease, contact the ground lease holder. If the identity of the ground lease holder is unknown, the State Department of Assessments and Taxation provides a process to redeem the ground lease that may result in your obtaining absolute ownership of the property. If you would like to obtain absolute ownership of this property, you should contact a lawyer for advice.". 

(b)  Notice of estimated deferred water and sewer charges.-  

(1) In this subsection, "water and sewer authority" includes a person to which the duties and responsibilities of the Washington Suburban Sanitary Commission have been delegated by a written agreement or in accordance with a local ordinance. 

(2) A contract for the initial sale of improved, residential real property to a member of the public who intends to occupy or rent the property for residential purposes shall disclose the estimated cost, as established by the appropriate water and sewer authority, of any deferred water and sewer charges for which the purchaser may become liable. If the appropriate water and sewer authority has not established a schedule of charges for the water and sewer project that benefits the property or if a local jurisdiction has adopted a plan to benefit the property in the future, the contract of sale shall disclose that fact. 

(c)  Violation of subsection (b).- Violation of subsection (b) of this section entitles the initial purchaser to recover from the seller: 

(1) Two times the amount of deferred charges the purchaser would be obligated to pay during the 5 years of payments following the sale; 

(2) No amount greater than actually paid thereafter; and 

(3) Any deposit moneys actually paid by the purchaser that were lost as a result of violation of subsection (b) of this section. 

(d)  Notice of costs of recordation or transfer taxes.-  

(1) A contract for use in the sale of residential property used as a dwelling place for one or two single-family units shall contain, in the manner provided under paragraph (2) of this subsection, the following statement: 
 

"Section 14-104 of the Real Property Article of the Annotated Code of Maryland provides that, unless otherwise negotiated in the contract or provided by State or local law, the cost of any recordation tax or any State or local transfer tax shall be shared equally between the buyer and seller." 

(2) The statement required under paragraph (1) of this subsection shall be printed in conspicuous type or handwritten in the contract or an addendum to the contract. 

(e)  "Critical area" notice required.- A contract or an addendum to the contract for the sale of real property shall contain in conspicuous type the following statement: 
 

"Notice to buyer concerning the Chesapeake and Atlantic Coastal Bays Critical Area 
 

Buyer is advised that all or a portion of the property may be located in the "critical area" of the Chesapeake and Atlantic Coastal Bays, and that additional zoning, land use, and resource protection regulations apply in this area. The "critical area" generally consists of all land and water areas within 1,000 feet beyond the landward boundaries of State or private wetlands, the Chesapeake Bay, the Atlantic Coastal Bays, and all of their tidal tributaries. The "critical area" also includes the waters of and lands under the Chesapeake Bay, the Atlantic Coastal Bays, and all of their tidal tributaries to the head of tide. For information as to whether the property is located within the critical area, buyer may contact the local department of planning and zoning, which maintains maps showing the extent of the critical area in the jurisdiction. Allegany, Carroll, Frederick, Garrett, Howard, Montgomery, and Washington counties do not include land located in the critical area.". 

(f)  Additional requirements.- A contract of sale shall also comply with the following provisions, if applicable: 

(1) Section 17-405 of the Business Occupations and Professions Article (notice of purchaser's protection by the Real Estate Guaranty Fund in an amount not to exceed $25,000); 

(2) Section 17-504 of the Business Occupations and Professions Article (notice by real estate broker pertaining to deposit in noninterest bearing account); 

(3) Section 17-523 of the Business Occupations and Professions Article (notice by real estate broker about recordation and transfer taxes); 

(4) Section 17-524 of the Business Occupations and Professions Article (notice of purchaser's right to select title company, settlement company, escrow company, mortgage lender, or financial institution); 

(5) Section 8A-605 of this article (notice of park rules to be given to buyer pertaining to sales of mobile homes); 

(6) Section 10-103 of this article (notices and disclosures pertaining to land installment contracts); 

(7) Sections 10-301 and 10-306 of this article (requirements and disclosures pertaining to deposits on new homes); 

(8) Sections 10-505 and 10-506 of this article (requirements and disclosures pertaining to contracts between custom home builders and buyers); 

(9) Sections 10-602, 10-603, 10-604(b), and 10-605 of this article (notices, disclosures, and requirements pertaining to new home warranties); 

(10) Section 10-701 of this article (notice pertaining to sale of real property in Prince George's County creating subdivision); 

(11) Section 10-702 of this article (disclosure or disclaimer statements pertaining to single-family residential real property); 

(12) Section 10-703 of this article (notice pertaining to land use in county land-use plans in Anne Arundel County); 

(13) Section 11-126 of this article (notice pertaining to initial sale of condominium unit); 

(14) Section 11-135 of this article (notice pertaining to resale of condominium unit); 

(15) Sections 11A-112, 11A-115, and 11A-118 of this article (statements and requirements pertaining to time-shares); 

(16) Section 11B-105 of this article (notice pertaining to initial sale of lot in development containing more than 12 lots); 

(17) Section 11B-106 of this article (notice pertaining to resale of any lot or initial sale of lot in development containing 12 or fewer lots); 

(18) Section 11B-107 of this article (notice pertaining to initial sale of lot not intended to be occupied or rented for residential purposes); 

(19) Section 5-6B-02 of the Corporations and Associations Article (notice pertaining to initial sale of cooperative interests); 

(20) Section 13-308 of the Tax - Property Article (notice of liability for agricultural land transfer tax); 

(21) Section 13-504 of the Tax - Property Article (notice of liability for agricultural land transfer tax in Washington County); and 

(22) Section 6-824 of the Environment Article (disclosure pertaining to obligations to perform risk reduction). 

(g)  Validity of contract.- Unless otherwise specifically provided, a contract of sale is not rendered invalid by the omission of any statement referred to in this section. 

(h)  Development impact fees.-  

(1) This subsection applies to Prince George's County. 

(2) A contract for the sale of real property on which a development impact fee has been imposed shall contain a notice to the purchaser stating: 

(i) That a development impact fee has been imposed on the property; 

(ii) The total amount of the impact fee that has been imposed on the property; and 

(iii) The amount of the impact fee, if any, that is unpaid on the date of the contract for the sale of the property. 

(3) Violation of paragraph (2) of this subsection entitles the initial purchaser to recover from the seller: 

(i) Two times the amount of development impact fees the purchaser would be obligated to pay following the sale; 

(ii) No amount greater than actually paid thereafter; and 

(iii) Any deposit moneys actually paid by the purchaser that were lost as a result of violation of paragraph (2) of this subsection. 

(i)  Agriculturally assessed property; applicability.-  

(1) This subsection applies to St. Mary's and Charles counties. 

(2) A contract for the sale of agriculturally assessed real property shall include the following information: 

"Notice: under § 9-241 of the Environment Article of the Annotated Code of Maryland, the Department of the Environment is required to maintain permanent records regarding every permit issued for the utilization of sewage sludge, including the application of sewage sludge on farm land. A prospective buyer has the right to ascertain all such information regarding the property being sold under this transaction." 

(3) Omission of the notice required under paragraph (2) of this subsection may not be a basis for invalidation of the contract for sale. 

(j)  Contract for initial sale of new home.-  

(1) This subsection applies to Baltimore City and all other counties except Montgomery County. 

(2) A contract for the initial sale of a new home, as defined in the Maryland Home Builder Registration Act, shall include the following: 

(i) The builder registration number of the seller of the new home; 

(ii) A provision stating that the new home shall be constructed in accordance with all applicable building codes in effect at the time of the construction of the new home; 

(iii) A provision referencing all performance standards or guidelines: 

1. That the seller shall comply with in the construction of the new home; and 

2. That shall prevail in the performance of the contract and any arbitration or adjudication of a claim arising from the contract; and 

(iv) A provision detailing the purchaser's right to receive a consumer information pamphlet as provided under the Home Builder Registration Act. 

(3) The performance standards or guidelines described in paragraph (2) of this subsection shall be: 

(i) The performance standards or guidelines adopted at the time of the contract: 

1. By the National Association of Home Builders; or 

2. Under the federal National Manufactured Housing Construction and Safety Standards Act, to the extent applicable; 

(ii) Any performance standards or guidelines adopted by the home builder and incorporated into the contract that are equal to or more stringent than the performance standards or guidelines adopted at the time of the contract: 

1. By the National Association of Home Builders; or 

2. Under the federal National Manufactured Housing Construction and Safety Standards Act, to the extent applicable; or 

(iii) Any performance standards or guidelines adopted at the time of the contract by a county or municipal corporation that are equal to or more stringent than the performance standards or guidelines adopted at the time of the contract: 

1. By the National Association of Home Builders; or 

2. Under the federal National Manufactured Housing Construction and Safety Standards Act, to the extent applicable. 

(4) The information required by paragraph (2) of this subsection shall be printed in conspicuous type. 

(j-1)  Written commitment for loan.-  

(1) A contract for the initial sale of a new home, as defined in the Maryland Home Builder Registration Act, shall be contingent on the purchaser obtaining a written commitment for a loan secured by the property, unless the contract contains a provision expressly stating that it is not contingent. 

(2) If the contract is contingent on the purchaser obtaining a written commitment for a loan secured by the property, the contract shall state the maximum loan interest rate the purchaser is obligated to accept. 

(k)  Notice of potential high noise levels from proximity to military installation.-  

(1) This subsection does not apply in Allegany, Carroll, Frederick, Garrett, Howard, Montgomery, and Washington counties. 

(2) A contract for the sale of residential real property shall contain the following statement: 

"Buyer is advised that the property may be located near a military installation that conducts flight operations, munitions testing, or military operations that may result in high noise levels. " 

(3) All local laws requiring a statement or notice substantially similar to the statement required under paragraph (2) of this subsection prevail over the requirements of this subsection. 

(l)  Disclosure of violations described in § 5-106(aa)(1) of the Courts and Judicial Proceedings Article.-  

(1) This subsection applies to Anne Arundel County. 

(2) Subject to paragraph (3) of this subsection, if Anne Arundel County or the State has initiated enforcement action for a violation of a local law described in § 5-106(aa)(1) of the Courts and Judicial Proceedings Article, a contract for sale of the real property where the violation occurred shall disclose: 

(i) The nature of the violation; 

(ii) The status of any ongoing proceedings to enforce the violation; and 

(iii) Any actions the buyer of the real property may be required to take with respect to the property in order to cure the violation. 

(3) If a violation of a local law described in § 5-106(aa)(1) of the Courts and Judicial Proceedings Article is cured and a buyer of the real property where the violation occurred would not have any obligation to cure the violation, paragraph (2) of this subsection does not apply. 
 

[1980, ch. 288; 1987, ch. 633; 1989, ch. 236, § 4; ch. 756, § 1; 1990, ch. 6, § 13; ch. 596; 1991, ch. 55, § 1; 1993, ch. 324; 1994, ch. 3, § 13; 1995, ch. 3, § 1; 1997, ch. 729; 1998, ch. 21, § 1; 1999, ch. 654; 2000, ch. 522; 2001, ch. 560; 2002, ch. 60, §§ 1, 2; 2003, ch. 21, § 1; 2004, ch. 396; 2006, ch. 568; 2007, chs. 5, 288, 289, 550; 2009, ch. 60, § 5; ch. 92.]