|
TO: SMAR Members
FROM: Alvin C. Monshower, Jr.
SUBJECT: Revised MAR Conservation Easement Addendum
DATE: October 6, 2009
During the 2007 Session of the Maryland General Assembly, the Legislature enacted a requirement that properties affected by one or more conservation easements or other restrictions limiting or affecting use of the property be fully disclosed to a prospective purchaser of the property.
However, under the laws enacted effective October 1, 2007, the buyer had no right, upon receipt of any applicable conservation easement affecting the property, to declare the contract null and void, provided the purchaser received the easements within ten (10) days from the date of the contract of sale.
During the 2009 Session of the Maryland Legislature this oversight was corrected. Effective October 1, 2009, a new Maryland law took effect which now provides the purchaser with the right, under certain circumstances, to rescind the contract of sale.
Specifically, under the new law, a buyer who receives the required notice as set forth in the Conservation Easement Addendum and copies of the conservation easements applicable to the property on or before the buyer and seller enter into a contract of sale, would not have any right to rescind the contract of sale based upon the information as perceived from the seller regarding such conservation easements.
However, under the new law, a buyer who does not receive the notice as contained in the Conservation Easement Addendum or copies of all applicable conservation easements on or before entering the contract of sale of the property, upon written notice to the seller or the seller's agent, has the unconditional right to rescind the contract at any time before receipt of the notice as set forth in the Conservation Easement Addendum or the receipt of the conservation easements, or within five (5) days after receipt of the notice and copies of all applicable easements. In such event, the buyer would be entitled to the immediate return of any deposits made in accordance with the contract of sale.
THIS NEW LAW WILL HAVE SIGNIFICANT IMPACT UPON MEMBERS OF SMAR.
First, the new law, as stated above, does now grant to the buyer the right to rescind the contract, unless the notice, documents and easements were provided to the buyer before the contract of sale was entered into, any time before the buyer receives the notice and easements or within five (5) days thereafter. THIS IS A MAJOR CHANGE FROM THE LAW AND A MAJOR CHANGE IN THE CONTENTS OF THE CONSERVATION EASEMENT ADDENDUM.
More problematic, if the contract of sale was prepared by a REALTOR® and does not contain the Conservation Easement Addendum, then the buyer, even if they received copies of the conservation easements prior to entering into a contract of sale, would still have the right to declare the contract null and void.
In light of the serious consequences in the change in the law, your immediate attention to the following is recommended:
* Only the MAR Conservation Easement Addendum which now bears the date of 10/09 as published by MAR should be used in any contract of sale on or after 12:01 a.m. on Thursday, October 1, 2009.
* Brokers should remove from their current inventory any prior versions of the MAR Conservation Easement Addendum.
* Brokers and office managers are urged to notify their sales associates to destroy all prior versions of the MAR Conservation Easement Addendum which they may have in their personal possession which are outside the control and authority of the broker and/or manager.
* Revised Form #133 Conservation Easement Addendum is available on Auto Contact.
The revised Conservation Easement and law would not be affected with respect to contracts of sales entered into on or before 12:59 p.m., Wednesday, September 30, 2009.
|
