Ground-rent reforms fail

ANNAPOLIS — Ground-rent tenants will get no reprieve from the General Assembly this session.

The midnight end of the legislative session also marked the demise of legislation that would have permitted ground-rent owners to collect the costs of ejecting a tenant – such as attorney’s fees – only if cost collection was authorized under the lease. The Senate and House could not agree on procedural provisions of the measure, such as the statute of limitations on claims for rent payment.

Senate Judicial Proceedings Committee Chair Brian E. Frosh had introduced the legislation just days after Maryland’s top court on Feb. 25 struck down as unconstitutional a 2007 law that had replaced ejectment with foreclosure as the method for removing non-paying tenants and re-entering the property.

In its 5-2 decision in Maryland v. Goldberg, the Court of Appeals said the lien-and-foreclosure law deprived the ground-rent owners of a settled property right “in mindful ignorance of clear, strong language describing this unique property interest.”

Frosh, in introducing his bill, said he was “disappointed” by the court’s decision and that ground-rent owners enjoy “a right to a windfall” through the recovery and re-entry of the property when a tenant fails to make payment. Displaced tenants should not have to shoulder the costs of their removal, he added in explaining the purpose behind Senate Bill 1095.

Under the bill, ground-rent owners would have had to provide 30 days’ notice before initiating ejectment proceedings at the risk of forfeiting any claim to attorney’s fees, court costs, photocopying fees and postage.

The bill would also have required individuals who hold a lien on the ground-rent property to be made a party to the ejectment proceeding so they can assert their claim for the debt owed.

Minutes after the session ended, Frosh said three weeks was just not enough time to get the legislation passed.

“We tried,” added Frosh, D-Montgomery. “We couldn’t punch it over the goal line.”

Ground-rent owners grant inexpensive 99-year leases under an investment model that dates to colonial times. The investment was seen as safe and remained popular since payment was largely guaranteed by the threat of ejectment.

The General Assembly, amid Baltimore Sun articles documenting ejectment with little notice, passed the since-invalidated 2007 law requiring owners to secure a lien and foreclose in order to get the property back.