SB 170
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 170 (Senator West)
Judicial Proceedings Environment and Transportation
Real Property - Ground Leases - Past Due Ground Rent
This bill specifies that, notwithstanding any other provision of law, a ground lease holder
may not bring any suit, action, or proceeding against a current or former leasehold tenant
to recover ground rent that was due before the date the current leasehold tenant acquired
title to the leasehold interest, if the ground lease was not registered with the State
Department of Assessments and Taxation (SDAT) in accordance with specified statutory
provisions.
Fiscal Summary
State Effect: The bill does not materially impact State finances or operations.
Local Effect: The bill does not materially impact local government finances or operations.
Small Business Effect: Potential meaningful.
Analysis
Current Law:
Required Registration
Generally, if a ground lease is not registered with SDAT in accordance with specified
provisions of the Real Property Article, the ground lease holder may not (1) collect any
ground rent payments due under the ground lease; (2) bring a civil action against the
leasehold tenant to enforce any rights the ground lease holder may have under the ground
lease; or (3) bring an action against the leasehold tenant under specified provisions of the
Real Property Article related to ground leases.
Action for Past-due Ground Rent
In any suit, action, or proceeding by a ground lease holder (or the transferee of the reversion
in property subject to a ground lease) to recover past-due ground rent, the ground lease
holder or the transferee may only recover up to three years of past-due ground rent,
calculated from the date a specified notice required before filing an action for possession
was sent by the ground lease holder. If authorized under the ground lease, a ground lease
holder may be reimbursed for specified late fees, interest, collection costs, and expenses.
Notwithstanding any other provision of law, in any suit, action, or proceeding to recover
past-due ground rent, a ground lease holder may only recover up to three years of past-due
ground rent if the property is (1) owned or acquired by the Mayor and City Council of
Baltimore by any means and (2) distressed property, as defined in the Public Local Laws
of Baltimore City. The three-year period is calculated from the date a specified notice
required before filing an action for possession was sent by the ground lease holder.
Notwithstanding any other provision of law, a ground lease holder may not bring any suit,
action, or proceeding against the current leasehold tenant to recover ground rent that was
due from a former leasehold tenant before the date that the current leasehold tenant
acquired title to a property subject to a residential ground lease, if the property is (1) owned
or acquired by the current leasehold tenant by any means and (2) abandoned property as
defined in the Public Local Laws of Baltimore City.
Background: Ground leases have been a form of property holding in Maryland since
colonial times. A ground lease creates a leasehold estate in the grantee that is personal –
not real – property. The grantor retains a reversion in the ground lease property and fee
simple title to the land. Ground leases generally have a 99-year term and are renewable
perpetually. Ground rent is paid to the grantor (the ground lease holder) for the use of the
property for the term of the lease in annual or semiannual installments. Under a typical
ground lease contract, the tenant agrees to pay all fees, taxes, and other costs associated
with ownership of the property.
2015 Ground Lease Legislation
Chapter 428 of 2015 substantially reorganized the law related to ground leases applicable
to residential property and made multiple additions. It repealed a provision of law that
made the establishment of a lien the remedy for nonpayment of a ground rent on residential
property and reinstated, with modifications, an action for possession as the remedy, similar
to the posture of the law before 2007. It prohibited the holder of a ground lease from
SB 170/ Page 2
bringing an action against a tenant unless the ground lease is registered, and it prohibited
the use of self-help to take possession of residential property. Chapter 428 also added new
requirements for notice and service of process on a leasehold tenant, and it allowed for a
holder of a security interest in a property subject to a ground lease to apply to redeem the
reversion. Finally, in an ejectment action, Chapter 428 specified and placed limits on the
expenses for which a ground lease holder may be reimbursed, and it clarified that recovery
of a maximum of three years of past-due ground rent is calculated from the date a specified
notice was sent.
Registration of a Ground Lease
Chapter 290 of 2007 established the registry of ground leases maintained by SDAT. The
registration fee is $10 for the first ground lease and $5 for each additional ground lease,
per ground lease holder.
Remaining Ground Leases in Maryland
As of January 2020, there are 92,419 ground rents registered with SDAT. According to the
registry, ground rents are concentrated mostly in Baltimore City (62,223), with other
ground rents located in Anne Arundel (3,795), Baltimore (25,939), Carroll (11), Cecil (1),
Charles (1), Harford (174), Howard (59), Montgomery (5), Prince George’s (45), and
Worcester (166) counties.
Small Business Effect: Small businesses that are holders of ground leases may be
prohibited from recovering past-due ground rent from a former leasehold tenant, if the
ground lease was not registered before the date that the current leasehold tenant acquired
title.
Additional Information
Prior Introductions: SB 956 of 2019 received a hearing in the Senate Judicial
Proceedings Committee, but no further action was taken. Its cross file, HB 753, passed the
House and was referred to the Senate Judicial Proceedings Committee, but no further action
was taken.
Designated Cross File: HB 241 (Delegate Holmes) - Environment and Transportation.
Information Source(s): Baltimore City; Anne Arundel, Baltimore, Harford, Howard, and
Prince George’s counties; Judiciary (Administrative Office of the Courts); State
Department of Assessments and Taxation; Department of Legislative Services
SB 170/ Page 3
Fiscal Note History: First Reader - January 27, 2020
af/jkb Third Reader - February 14, 2020
Analysis by: Donavan A. Ham Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 170/ Page 4


Statutes affected:
Text - First - Real Property - Ground Leases - Past Due Ground Rent: 8-707 Real Property, 8-806 Real Property, 8-807 Real Property
Text - Third - Real Property - Ground Leases - Past Due Ground Rent: 8-707 Real Property, 8-806 Real Property, 8-807 Real Property