HB 1102
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 1102 (Delegate Wilson)
Judiciary
Commercial Tenants – Personal Liability Clauses – Enforceability and Landlord
Relief
This emergency bill requires Baltimore City and each county to grant a refund to a
commercial landlord for county property taxes paid during fiscal 2021 that were imposed
on space subject to a commercial lease. In order to be eligible for the property tax refund,
a commercial landlord may not enforce or attempt to enforce a specified personal liability
clause. County governments may provide for (1) the amount of the property tax refund;
(2) the conditions to qualify for the property tax refund; (3) the period of time during which
an individual may apply for a property tax refund, provided that the commercial landlord
must have at least one year to apply for the property tax refund; and (4) any other provision
necessary to carry out the property tax refund. The provisions of the bill terminate
September 30, 2023.
Fiscal Summary
State Effect: The bill is not anticipated to materially affect State operations or finances.
Local Effect: Significant decrease in county revenues due to property tax refunds issued,
depending on the number of commercial landlords that are eligible for the refund. County
expenditures are not directly affected. The bill imposes a mandate on a unit of local
government.
Small Business Effect: Potential meaningful. Small businesses subject to a commercial
lease may benefit from a refund from fiscal 2021 real property taxes paid.
 Analysis
Bill Summary: A personal liability clause is a clause or provision in a commercial lease
or an associated agreement that requires an individual who is not a commercial tenant under
the commercial lease to become personally liable to the commercial landlord, in whole or
in part, for fees or charges, including rent, taxes, utility fees, or fees for routine building
maintenance, owed by the commercial tenant in the event of a default.
The bill establishes that a personal liability clause included in a commercial lease is
unenforceable if the following conditions are met: (1) as a result of the Governor’s
declarations issued March 5, 2020, or other proclamations issued related to the COVID-19
outbreak, the tenant was required to either cease serving food or beverages for on-premises
consumption or close to the public because of its status as a nonessential business or a
specific provision contained in an executive order or proclamation; and (2) the default
causing the individual to become wholly or partially personally liable occurred between
March 23, 2020, and September 30, 2020, inclusive.
The bill prohibits a commercial landlord from attempting to enforce a personal liability
clause that the landlord knows or reasonably should know is rendered unenforceable under
the bill. A court may enter a judgment against a commercial landlord for reasonable
attorney’s fees and court costs for a violation of this restriction. A commercial landlord’s
lawful action for nonpayment of rent, lawful termination of a tenancy established by a
commercial lease, lawful refusal to renew or extend a commercial lease or associated
agreement, or lawful reentry and repossession of the covered property may not be
construed as a violation.
Local Fiscal Effect: Local property taxes represent the leading revenue source for most
local governments in Maryland. In addition, due to the triennial assessment process and
the homestead assessments caps, the property tax remains a relatively stable and
predictable revenue source for county governments. Revenue collections are projected to
total $9.1 billion in fiscal 2021. A considerable portion of these revenues are generated by
commercial establishments. As shown in Exhibit 1, commercial real property accounts for
approximately 25% of the total real property base. In Baltimore City, commercial real
property accounts for over 40% of the total real property base. Requiring county
governments to provide a property tax refund in fiscal 2021 to certain commercial landlords
affected by the COVID-19 pandemic will have a significant negative impact on county
revenues.
HB 1102/ Page 2
 Exhibit 1
Real Property Base – Fiscal 2019
Commercial Total
County Real Property Real Property % Commercial
Allegany $983,411,141 $3,647,463,426 27.0%
Anne Arundel 21,336,377,969 91,133,376,067 23.4%
Baltimore City 19,910,869,418 45,557,036,733 43.7%
Baltimore 24,978,591,308 87,945,647,348 28.4%
Calvert 1,361,803,590 12,184,658,610 11.2%
Caroline 408,078,102 2,625,018,052 15.5%
Carroll 2,636,162,950 20,099,491,617 13.1%
Cecil 2,275,859,595 10,181,215,060 22.4%
Charles 3,387,114,025 18,369,902,013 18.4%
Dorchester 525,149,231 2,877,705,939 18.2%
Frederick 6,366,822,557 31,978,786,534 19.9%
Garrett 477,260,496 4,413,279,645 10.8%
Harford 5,855,085,796 28,583,847,626 20.5%
Howard 12,397,250,972 53,313,887,877 23.3%
Kent 414,795,733 2,970,482,813 14.0%
Montgomery 46,217,229,938 195,345,501,347 23.7%
Prince George’s 28,728,368,112 97,654,459,098 29.4%
Queen Anne’s 1,055,072,365 8,397,765,444 12.6%
St. Mary’s 1,811,217,943 12,594,358,576 14.4%
Somerset 273,368,437 1,376,668,778 19.9%
Talbot 1,094,068,494 8,493,110,859 12.9%
Washington 3,984,619,028 12,880,995,194 30.9%
Wicomico 1,642,878,307 6,306,778,804 26.0%
Worcester 2,702,769,121 15,893,364,746 17.0%
Total $190,824,224,628 $774,824,802,206 24.6%
Source: State Department of Assessments and Taxation
Of the 2.4 million real property tax accounts in the State, approximately 2.5% are either
improved commercial accounts (47,700) or improved commercial condominium accounts
(15,800). A portion of these accounts may be subject to a commercial lease. As shown in
Exhibit 2, the average real property assessment is $2.1 million for commercial accounts
and $721,700 for commercial condo accounts. The average local property tax amount for
these accounts total $25,300 for commercial real property and $8,600 for commercial
HB 1102/ Page 3
condo real property. If for illustrative purposes only, 7.5% of these accounts are subject to
a commercial lease in fiscal 2021 and meet the other criteria of the bill, local property tax
refunds could total approximately $100 million in fiscal 2021.
Exhibit 2
Commercial and Commercial Condo Real Property Accounts
July 2020
Commercial Real Property Commercial Condominium Real Property
Avg. Avg.
County Accounts Value Value Accounts Value Value
Allegany 2,033 $819,950,975 $403,321 51 $2,633,400 $51,635
Anne Arundel 4,014 12,541,073,574 3,124,333 1,701 738,442,901 434,123
Baltimore City 7,955 11,809,975,616 1,484,598 695 1,508,098,830 2,169,926
Baltimore 6,265 11,956,855,486 1,908,516 469 810,733,166 1,728,642
Calvert 553 758,266,546 1,371,187 146 39,970,995 273,774
Caroline 511 258,823,497 506,504 0 0 n/a
Carroll 1,651 1,921,249,897 1,163,689 345 97,711,199 283,221
Cecil 1,318 1,188,439,662 901,699 182 15,643,600 85,954
Charles 1,055 1,990,673,638 1,886,894 674 182,520,421 270,802
Dorchester 709 380,002,708 535,970 0 0 n/a
Frederick 2,097 4,007,082,388 1,910,864 693 264,464,228 381,622
Garrett 808 382,472,265 473,357 250 31,584,000 126,336
Harford 2,197 3,426,238,776 1,559,508 157 90,292,433 575,111
Howard 1,179 5,282,329,132 4,480,347 1,368 694,140,298 507,412
Kent 509 357,727,700 702,805 12 5,984,167 498,681
Montgomery 2,927 22,963,239,791 7,845,316 3,821 5,351,718,399 1,400,607
Prince George’s 3,543 11,937,267,704 3,369,254 2,938 888,429,836 302,393
Queen Anne’s 601 747,184,099 1,243,235 573 56,528,867 98,654
St. Mary’s 1,113 1,149,494,318 1,032,789 142 70,439,731 496,054
Somerset 646 199,838,937 309,348 23 2,913,199 126,661
Talbot 930 853,530,539 917,775 212 54,060,419 255,002
Washington 1,781 2,264,385,743 1,271,413 110 136,550,527 1,241,368
Wicomico 1,541 1,029,168,763 667,858 339 68,841,156 203,071
Worcester 1,729 2,365,456,663 1,368,107 850 254,955,027 299,947
Total 47,665 $100,590,728,417 $2,110,369 15,751 $11,366,656,799 $721,647
Avg.: average
Source: State Department of Assessments and Taxation
Additional information on local property tax rates and revenue amounts for Maryland
counties and Baltimore City can be found in the County Revenue Outlook report. A copy
of the fiscal 2021 report can be found on the Department of Legislative Services website.
HB 1102/ Page 4
 Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Montgomery and Prince George’s counties; Judiciary
(Administrative Office of the Courts); State Department of Assessments and Taxation;
Department of Legislative Services
Fiscal Note History: First Reader - February 15, 2021
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Analysis by: Michael Sanelli Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1102/ Page 5


Statutes affected:
Text - First - Commercial Tenants – Personal Liability Clauses – Enforceability and Landlord Relief: 2-020 []