EXPLANATION: CAPITALS indicate matter added to existing law.
[Brackets] indicate matter deleted from existing law.
* WARNING: THIS IS AN UNOFFICIAL, INTRODUCTORY COPY OF THE BILL.
THE OFFICIAL COPY CONSIDERED BY THE CITY COUNCIL IS THE FIRST READER COPY.
INTRODUCTORY*
CITY OF BALTIMORE
COUNCIL BILL
Introduced by: Councilmember Kraft
A BILL ENTITLED
AN ORDINANCE concerning
Title
Tenant's Right of First Refusal - Application to Ground Rents
FOR the purpose of extending the provisions governing a tenant's right of first refusal to apply to the proposed transfer of a reversionary (ground rent) interest; deleting certain exemptions as applicable to both rental properties and leaseholds subject to a reversionary interest; providing for certain civil relief and penalties; correcting, conforming, and clarifying certain language; and generally relating to tenants' rights of first refusal.
Body
BY repealing and reordaining, with amendments
Article 13 - Housing and Urban Renewal
Section(s) 6-1, 6-2, 6-3, 6-4(a)(1), 6-7, 6-8, and 6-9(a) and (b)
Baltimore City Code
(Edition 2000)
BY adding
Article 13 - Housing and Urban Renewal
Section(s) 6-4(f)
Baltimore City Code
(Edition 2000)
SECTION 1. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF BALTIMORE, That the Laws of Baltimore City read as follows:
Baltimore City Code
Article 13. Housing and Urban Renewal
Subtitle 6. Tenant's Right of First Refusal
§ 6-1. Statement of public policy and purpose.
It is the intent and purpose of this [law] SUBTITLE that before THE VOLUNTARY TRANSFER OF title to any single-family residential rental property [is voluntarily transferred] OR OF TITLE TO ANY REVERSIONARY (GROUND RENT) INTEREST, the tenant of that property [shall] have the opportunity to purchase the property on terms accepted as reasonable in the residential real estate market; and that residential property owners [shall] MAY not be unreasonably impeded in selling their properties nor required to accept unreasonable terms of sale.
§ 6-2. Definitions.
(A) IN GENERAL.
IN THIS SUBTITLE, THE FOLLOWING TERMS HAVE THE MEANINGS INDICATED.
(B) [(a)] Landlord.
[As used in this law, "landlord"] "LANDLORD" means:
(1) an owner, lessor, sublessor, assignee, [any] OR agent [thereof] OF ANY OF THESE, or any other person receiving or entitled to receive rents or benefits for the use or occupancy of any residential rental unit within the City of Baltimore; OR
(2) AN OWNER, LESSOR, SUBLESSOR, ASSIGNEE, OR AGENT OF ANY OF THESE, OR ANY OTHER PERSON RECEIVING OR ENTITLED TO RECEIVE RENTS OR BENEFITS FOR A REVERSIONARY (GROUND RENT) INTEREST WITHIN THE CITY OF BALTIMORE.
(C) [(b)] Tenant.
(1) [As used in this law, "tenant"] "TENANT" means a tenant, subtenant, lessee, sublessee, or other person WHO:
(I) IS entitled to the possession, occupancy, or [the] benefits [thereof,] of any rental unit OR ANY LEASEHOLD SUBJECT TO A REVERSIONARY (GROUND RENT) INTEREST owned by another person[,]; and
(II) [who] has resided [therein] IN THE RENTAL UNIT OR LEASEHOLD for not less than 6 months.
(2) [Where] IF a rental unit OR LEASEHOLD INTEREST had been occupied by a tenant at any time during the preceding 6 months, the last [such] tenant to [occupy] HAVE OCCUPIED the [unit] RENTAL UNIT OR LEASEHOLD [shall be] IS considered a present tenant for purposes of this [law] subtitle.
(3) [Provided however that] HOWEVER, no tenant who has been summarily ejected for non-payment of rent pursuant to Subtitle 9 of the Public Local Laws of Baltimore City from a single-family rental property [shall be] IS entitled [by this subtitle] to a right of first refusal for that property.
§ 6-3. Tenant's right of first refusal.
Before a voluntary transfer of title OR INTEREST OF ANY KIND to a single-family rental residential property OR TO A REVERSIONARY (GROUND RENT) INTEREST may occur, the tenant of that property [shall have] HAS the right of first refusal to purchase the property. [Such] THIS right shall be exercised in accordance with the provisions of this [law] SUBTITLE.
§ 6-4. Exercise of right of first refusal.
(a) In general.
(1) [Prior to] BEFORE the voluntary transfer of title OR INTEREST OF ANY KIND to a single-family residential rental property OR TO A REVERSIONARY (GROUND RENT) INTEREST, a written offer of sale shall be made to the tenant. [Such] THE offer shall be mailed to the tenant by first class mail, postage prepaid, and the sender shall obtain a receipt from the post office for [said] THE mailing. The offer shall state the offered sale price and those terms and conditions, not inconsistent with the provisions of this subtitle, [which] THAT the landlord proposes to incorporate in any resulting contract of sale with the tenant. The tenant [shall have] HAS 30 days from the date of mailing [of such an] THE offer of sale to indicate in the manner provided below his OR HER intent to exercise his OR HER right of first refusal.
(F) SALE OF A REVERSIONARY (GROUND RENT) INTEREST.
A TENANT WITH A LEASEHOLD INTEREST EXERCISING HIS OR HER RIGHT OF FIRST REFUSAL UNDER THIS SUBTITLE TO PURCHASE A REVERSIONARY (GROUND RENT) INTEREST MAY NOT BE REQUIRED TO PAY THE LANDLORD ANY SUM MORE THAN WHAT WOULD REQUIRED TO REDEEM THE GROUND RENT PURSUANT TO STATE LAW.
§ 6-7. Exemptions.
The following transfers of title to single-family residential rental properties are exempt from the requirements of this subtitle:
(1) transfer of title to a spouse, child or children, parents, siblings, or in-laws of the landlord;
(2) transfer of title by will or through inheritance under the Estates and Trusts Article of the Maryland Code;
(3) a gift to any religious, charitable, or benevolent, tax-exempt donee;
(4) transfer of title in a mortgage or deed of trust;
(5) transfer of title to a government agency;
[(6) transfer of, or for the sole purpose of creating, a reversionary (ground rent) interest, if the leasehold is retained by, or was not owned by, the transferor;]
(6) [(7)] transfer of title in lieu of foreclosure of a mortgage or deed of trust;
(7) [(8)] any sale at public auction of a property individually, if the landlord has offered the property to the tenant as required by § 6-4(a) of this subtitle, and the tenant has failed to exercise the right of first refusal before the auction sale;
[(9) any transfer by a personal representative from a decedent's estate made in the course of the administration of the estate;]
[(10) a transfer of title by a bona fide gift to a relative of the transferor or relative of the transferor's spouse, subject to the following:
(i) "relatives" means only those relatives set forth in § 267(c)(4) of the Internal Revenue Code of 1986 and all lineal descendants and spouses of those relatives to the extent not already included in that section;
(ii) "ancestors" as defined in § 267(c)(4) are limited to the levels of parents and grandparents; and
(iii) "lineal descendants" include illegitimate children and step children, and full effect shall be given to legal adoption;] and
(8) [(11)] (i) a transfer of title in which:
(A) the property is listed for sale with a bona fide third-party licensed real estate broker; and
(B) the tenant is notified in writing, in accordance with item (ii), that:
1. the right of first refusal under this subtitle does not apply because of the exemption under this subsection;
2. the tenant may negotiate for the purchase of the property on the same basis as other members of the general public; and
3. the tenant may contact the Homeownership Institute in the Department of Housing and Community Development for information about the process of purchasing and financing a home; and
(ii) the notice must be sent to the tenant at his or her last known address, by certified mail, return receipt requested, within 48 hours after the listing of the property with a real estate broker. With the notice to the tenant, the landlord or the real estate broker shall send a copy of all information included in the public offering for sale.
§ 6-8. Penalties.
(a) Criminal penalties.
(1) In addition to any penalty arising from the making of a false affidavit, if a landlord voluntarily transfers title to a single-family residential rental property OR TO A REVERSIONARY (GROUND RENT) INTEREST without complying with the provisions of this subtitle, he shall be guilty of a misdemeanor and shall be subject to a fine of up to $500.
(2) Provided that each failure to comply with a particular provision of this subtitle shall constitute a separate violation of this subtitle and shall be considered a separate offense.
(b) [Injunctive] CIVIL relief AND PENALTIES.
(1) PURSUANT TO THE AUTHORITY GRANTED TO THE CITY IN STATE COMMERCIAL LAW ARTICLE, § 13-103(B), ANY VIOLATION OF THIS SUBTITLE SHALL BE DESCRIBED AS AN UNFAIR OR DECEPTIVE TRADE PRACTICE AS DEFINED IN STATE COMMERCIAL LAW ARTICLE, TITLE 13.
(2) A tenant may seek relief from an appropriate court to restrain or enjoin any violation of the provisions of this [law] SUBTITLE.
(3) A TENANT MAY BRING AN ACTION FOR DAMAGES INCURRED AS A RESULT OF A PRACTICE PROHIBITED BY THIS SUBTITLE.
(4) IF A TENANT BRINGS AN ACTION UNDER THIS SECTION AND IS AWARDED DAMAGES, THE TENANT MAY SEEK AND THE COURT MAY AWARD REASONABLE ATTORNEY'S FEES AND COSTS.
(5) IF THE COURT FINDS THAT THE DEFENDANT WILLFULLY OR KNOWINGLY VIOLATED THIS SUBTITLE, THE COURT MAY AWARD DAMAGES EQUAL TO 3 TIMES THE AMOUNT OF ACTUAL DAMAGES.
§ 6-9. Affidavit on transfers to third parties.
(a) Affidavit of compliance required.
(1) In any transfer of real property OR INTEREST OF ANY KIND subject to this [law] SUBTITLE to a party other than a tenant, the owner shall file [in the land records of Baltimore City] an affidavit in the form set forth in [Paragraph] SUBSECTION (c) [below] OF THIS SECTION, certifying that the requirements of this subtitle have been met, as a part of the [deed] conveyance.
(2) THE AFFIDAVIT SHALL BE FILED:
(I) IN THE LAND RECORDS OF BALTIMORE CITY; OR
(II) IN ANY OTHER INFORMATION DEPOSITORY OF REVERSIONARY (GROUND RENT) INTERESTS ESTABLISHED UNDER THE LAWS OF THE STATE OR THE CITY.
(b) Transferee's rights protected.
Where an affidavit has been filed as provided by [paragraph] SUBSECTION (a) [above] OF THIS SECTION, the rights and title of a third party transferee, HER OR his heirs, successors, or assigns, WITHOUT NOTICE OF ANY OTHER FACTS GIVING RISE TO THE RIGHTS AND PROTECTIONS OF THIS SUBTITLE, [shall be] ARE free of any restriction or claim arising in favor of a tenant of [said] THE property under or through any provision of this subtitle.
SECTION 2. AND BE IT FURTHER ORDAINED, That the catchlines contained in this Ordinance are not law and may not be considered to have been enacted as a part of this or any prior Ordinance.
SECTION 3. AND BE IT FURTHER ORDAINED, That this Ordinance takes effect on the 30th day after the date it is enacted.
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