§ 8-804. Redemption of reversions in leases
West's Annotated Code of MarylandReal PropertyEffective: October 1, 2023
Effective: October 1, 2023
MD Code, Real Property, § 8-804
Formerly cited as MD REAL PROP § 8-110
§ 8-804. Redemption of reversions in leases
(a)(1) Except as provided in subsection (f) of this section, this section does not apply to irredeemable ground leases preserved under § 8-805 of this subtitle.
(b)(1) Except for apartment and cooperative leases, any reversion reserved in a ground lease for longer than 15 years is redeemable at any time, at the option of the leasehold tenant, after 30 days' notice to the ground lease holder. Notice shall be given by certified mail, return receipt requested, and by first-class mail to the last known address of the ground lease holder.
(3)(i) If the leasehold tenant is in default under a security instrument, the holder of the secured interest in the property that is subject to a ground lease, or any portion of a ground lease, that is recorded in the land records of the county in which the property is located may apply to the State Department of Assessments and Taxation to redeem the reversion as provided under this section.
(ii) If a holder of a secured interest applies to redeem a reversion as authorized under subparagraph (i) of this paragraph, the holder also shall pay to the ground lease holder the outstanding amount due, including, if authorized under the ground lease, reasonable late fees, interest, collection costs, and expenses as provided under § 8-807 of this subtitle.
(c) If a leasehold tenant has power to redeem the reversion from a trustee or other person who does not have a power of sale, the reversion nevertheless may be redeemed in accordance with the procedures prescribed in the Maryland Rules.
(d) Notwithstanding subsection (b) of this section, any regulatory changes made by a federal agency, instrumentality, or subsidiary, including the Department of Housing and Urban Development, the Federal Housing Administration, the Government National Mortgage Association, the Federal National Mortgage Association, and the U.S. Department of Veterans Affairs, shall be applicable to redemption of reversions of ground leases for longer than 15 years.
(e)(1) Before the entry of a judgment foreclosing a leasehold tenant's right of redemption, a reversion in a ground rent or ground lease for 99 years renewable forever held on abandoned property in Baltimore City, as defined in § 14-817 of the Tax--Property Article, may be donated to Baltimore City or, at the option of Baltimore City, to an entity designated by Baltimore City.
(f)(1)(i) A leasehold tenant who has given the ground lease holder notice in accordance with subsection (b) of this section may apply to the Department to redeem a ground rent as provided in this subsection.
(ii) When the Mayor and City Council of Baltimore City acquires property that is subject to an irredeemable ground rent, the City shall become the leasehold tenant of the ground rent and, after giving the ground lease holder notice in accordance with subsection (b) of this section, may apply to the Department to extinguish the ground rent as provided in this subsection.
(iii) When the Mayor and City Council of Baltimore City acquires abandoned or distressed property that is subject to a redeemable ground rent, the City shall become the leasehold tenant of the ground rent and, after giving the ground lease holder notice in accordance with subsection (b) of this section, may apply to the Department to redeem the ground rent as provided in this subsection.
(8) The redemption or extinguishment of the ground rent is effective to conclusively divest the ground lease holder of the reversion and vest the reversion in the leasehold tenant, and eliminate all right, title, or interest of the ground lease holder, any lien of a creditor of the ground lease holder, and any person claiming by, through, or under the ground lease holder when the leasehold tenant records the certificate in the land records of the county in which the property is located.
(9) The ground lease holder, any creditor of the ground lease holder, or any other person claiming by, through, or under the ground lease holder may file a claim with the Department in order to collect all, or any portion of, where applicable, the redemption amount and 3 years' past due ground rent to the extent required under this section and § 8-806 of this subtitle, without interest, by providing to the Department:
(14) The Department shall credit all fees and funds collected under this subsection to the fund established under § 1-203.3 of the Corporations and Associations Article. Redemption and extinguishment amounts received shall be held in a ground rent redemption and ground rent extinguishment account in that fund.
(17) Any redemption or extinguishment funds not collected by a ground lease holder under this subsection within 20 years after the date of the payment to the Department by the leasehold tenant shall escheat to the State. The Department shall annually transfer any funds that remain uncollected after 20 years to the State General Fund at the end of each fiscal year.
Credits
Added as Real Property § 8-110 by Acts 1974, c. 12, § 2, eff. July 1, 1974. Amended by Acts 1976, c. 572; Acts 1982, c. 317; Acts 1983, c. 626; Acts 1989, c. 670; Acts 1996, c. 558, § 1, eff. Oct. 1, 1996; Acts 2002, c. 401, § 1, eff. July 1, 2002; Acts 2003, c. 464, § 1, eff. Jan. 1, 2004; Acts 2004, c. 480, § 1, eff. Oct. 1, 2004; Acts 2005, c. 18, § 1, eff. June 1, 2005; Acts 2007, c. 291, § 1, eff. July 1, 2007; Acts 2010, c. 609, § 1, eff. Oct. 1, 2010; Acts 2010, c. 610, § 1, eff. Oct. 1, 2010; Acts 2013, c. 462, § 1, eff. Oct. 1, 2013. Renumbered as Real Property § 8-804 and amended by Acts 2015, c. 428, § 2, eff. July 1, 2015. Amended by Acts 2015, c. 22, § 5; Acts 2020, c. 441, § 1, eff. Oct. 1, 2020; Acts 2020, c. 442, § 1, eff. Oct. 1, 2020; Acts 2023, c. 182, § 2, eff. Oct. 1, 2023; Acts 2023, c. 183, § 2, eff. Oct. 1, 2023; Acts 2023, c. 49, § 6.
MD Code, Real Property, § 8-804, MD REAL PROP § 8-804
Current through legislation effective through April 25, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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