Southern Maryland Association Of Realtors

Last fall, three counties (Anne Arundel, Prince George's and Montgomery) implemented a policy that imposed recordation and/or transfer taxes on the forgiven debt in short sales transactions. HB 590/SB 657 make clear that recordation and transfer taxes may not be imposed on the forgiven debt in short sale transactions. Short sales, like other real estate transactions, may only be taxed on the consideration. The passage of this legislation follows an Attorney General Opinion issued at MAR's Legislative Day that also deemed the Counties' practices unlawful.

 

Several states have passed legislation prohibiting the imposition of private transfer fees on property. Similar to a ground rent, private transfer fees are typically created as a 99 year deed restriction that requires a buyer to pay a fee to the original seller of the property every time the property sells. Those fees can be as high as 1% of the purchase price. Developers and some individual sellers often share the revenue with the commercial entity that creates it. MAR believes PTFs reduce transparency in real estate transactions, impose complexity on transactions which will increase with time, and cost buyers money in higher closing costs and lost equity. HB 1298/SB 666 prohibits the imposition of PTFs on property in Maryland.

 

The Maryland General Assembly passed legislation in 2009 which required homeowners living in Maryland's Critical Areas to install nitrogen reduction technology when replacing a failing septic system. Although the legislation was passed with the understanding that grants would cover the cost difference of the new technology, the Maryland Department of the Environment changed the loan terms forcing most families to incur thousands of dollars in extra costs. In response to the introduction of HB 62, MDE reversed course and is now providing full grants for the cost differential to those homeowners living in Maryland's Critical Areas. HB 62 clarifies in statute that MDE must continue to provide full grants through 2012, at which time the grants and program funding will be reevaluated.

All owner-occupied residential properties in Maryland pay their property taxes semi-annually or may choose to pay the full payment in advance. Non owner-occupied properties in Maryland, however, do not have the option of paying their property taxes semi-annually. Given the state of the economy, many businesses and investors would benefit from semi-annual payments. Although the Legislature was unwilling to pass HB 1209/SB 1083 as introduced, it passed a more limited semiannual bill which MAR also strongly supported. HB 484 requires counties to convert small business property to a semiannual tax payment schedule. A small business is a commercial property with a property tax bill of no more than $50,000 a year.

STATUS: HB 484 Passed. Effective October 1, 2010.

 

The Maryland Energy Administration introduced legislation to require the disclosure of utility bills to all homebuyers in Maryland. Although MAR was initially opposed to the specific approach taken by these bills, MAR worked with the Energy Administration on an alternative approach. However, those amendments were not ultimately accepted by the Committees and the legislation died.

 

The Maryland Real Estate Commission introduced two bills. The first requires all brokers and managers to take a broker supervisory course as part of their continuing education requirement. It also requires agents and brokers to take an agency law course. Both the supervisory and agency courses would not increase the existing 15 hour CE requirement.

 

The second bill provides the first statutory guidance on how real estate teams may operate in Maryland. The legislation requires all real estate teams have a designated team leader with three year's experience. Each team must include the name of one member of the team in advertisements, and disclose the business relationship between team members when a dual agency situation arises.

 

 These bills change one critical term in existing legislation from "may" to "shall" which eases the ability of landowners affected by highly eroding soils in the Calvert County community of Chesapeake Ranch Estates to obtain permits from DNR to perform work to stabilize the erosion impacting their homes and properties.