Goldstein & Levy, P.A., General Counsel
JUNE 20, 2016 | NEW MARYLAND LAWS OF INTEREST TO REAL ESTATE PROFESSIONALS
Governor Hogan signed the following bills passed by the MD legislature in its most recent session. All of these new laws (or amendments to existing laws) take effect October 1, 2016.
Residential Real Property – Sales Contracts – Notice of Water and Sewer Charges
Requires home sellers to inform homebuyers about any charges they pay for the installation of
water and sewer infrastructure (so called private deferred water and sewer assessments or “front-foot” fees) established by a recorded covenant or declaration by a non-governmental entity or person (e. g. developer or builder) . The bill requires sellers to inform buyers in the contract: whether a fee exists; the amount of the fee; and the number of years that remain to complete the payment. It also limits the term over which the assessment may be amortized to twenty (20) years after the date of the initial sale of the home. If a contract does not contain this information, a buyer may terminate the contact before settlement. In addition, if the buyer does not find out until after moving into the home, the seller becomes liable for payment of the remainder of the fee. This law will supplement similar, existing laws that have been enacted in some counties regulating these assessments.
Real Estate Licensees – Verification of Service Provider Licensing
Limits and clarifies the regulation requiring real estate agents to verify the license status of certain service providers referred to consumers. The regulation, as originally enacted, required real estate agents to verify the license status of: mortgage lenders; mortgage brokers; real estate appraisers; home improvement contractors; home inspectors; plumbers; electricians; and heating, ventilation, air-conditioning and refrigeration contractors. The bill requires real estate agents to only verify the license status of home improvement contractors. The bill also requires that the verification of licensing must be done only once per year rather than every time a referral is made
Real Estate Brokers – Agency Relationships in Residential Real Estate Transactions – Disclosure and Consent Requirements
This change in the existing law simplifies the disclosure law by focusing disclosure on unrepresented consumers. The current law requires licensees to provide agency disclosure to consumers who are already represented by other licensees and have already had agency information provided to them. The proposed changes would eliminate some of this redundant disclosure except when a consumer is not represented by an agent in the transaction. In addition, the proposed changes would simplify agency disclosure at open houses by requiring a seller’s agent to post information about the agent’s representation rather than giving out a disclosure form to buyers that visit the property. Finally, the bill eliminates the “statutory presumption” of buyer agency so that there is only one category of “buyer agent.”
Real Estate Brokers – Licensure Requirement – Exemption for Attorneys
Existing Maryland law includes an exemption from the real estate licensing requirements for attorneys and has resulted in attorneys sometimes asserting a claim for payment of a commission in transactions in which their clients are involved. This statutory change limits the application of that exemption for attorneys by providing that attorneys may only share in the commission, if: the lawyer is licensed in Maryland and (i) provides real estate brokerage services (ii) in the course of the lawyer’s regular practice of law.
Real Property – Condominiums and Homeowners Associations – Resales – Disclosures and Fees
This amendment to the existing law establishes the maximum fee that can be charged for HOA and Condominium resale packets, and then limits how much those fees can increase in future years. In general, the fees cannot exceed $250. However, if an inspection is required of the property, an inspection fee can be added and cannot exceed $100 and if a rush order is placed, a “rush fee” can be added which cannot exceed $50 if delivery is requested within 14 days or $100 if the delivery is requested within 7 days. Finally, the fees in the legislation may only be increased every two years by no more than the rate of the Consumer Price Index (CPI-U).
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