Transcript The 2012 Legislative Session

2012 Baltimore REIA Presentation
M. Arnold Politzer
Attorney at Law
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The 2012 Legislative Session
What Happened
and
How will it affect owning and
operating investment Property
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ANOTHER FUN YEAR FOR THE REAL ESTATE INVESTOR
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Making Money in Real Estate is Easy
Right ?
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Reversal of part of the Lead Paint Law
Court of Appeals Case
Jackson et al. v. Dackman Co. et al (October 2011)
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The Court of Appeals
ruled in this case that the
limits on landlord’s liability
which had been
$ 17,000.00 was
unconstitutional
The Court said that “$ 17,000.00 was miniscule and not
reasonable compensation” for a child permanently
damaged by lead poisoning
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This decision led to a number of new bills
proposed in the 2012 Legislature
Of the Bills proposed 2 significant Bills
passed
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House Bill 644
Makes important changes to the
Reduction of Lead Risk in Housing Law Act
(the ‘Lead Law’)
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EXPANDED THE TIME PERIOD COVERED
BY THE LAW
Prior to the change the law applied to
properties that were constructed before 1950
Beginning January 1, 2015 the law will apply
to properties that were constructed before
1978
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The law changed what had been the rebuttable
presumption “that an owner of affected
property that was not in compliance with the
“lead law” was presumed to have failed to
exercise reasonable care with respect to the
lead hazard”
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The law now allows the owner’s compliance or
non compliance with the lead law to prove that
an owner did or did not exercise reasonable care.
This alone doesn’t “get you off the hook” but
does put one more stumbling block in way of
Plaintiff’s case.
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A major item was added that would require any
party who either alleges or denies time and
place of residence or visitation by a person at
risk “without a good faith basis”
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will require the party, their attorney, or
both to pay reasonable costs including the
opposing party’s attorney’s fees that would
be incurred by the adverse party in
opposition to the allegation if you can’t
prove the allegation.
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This affects those cases
where a child didn’t
necessarily live at a
property but instead
“visited there”. Plaintiff
now has to do a good job
of proving that the child
did in fact visit the specific
address included in the
suit.
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Another important change the Bill makes
is that as of January 1, 2015 the
registration fee per property will
increase from $ 15.00 to $ 30.00 per
property and will then include all
properties built before 1978.
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House Bill 472
This bill is hoped to eventually
establish a Lead Poisoning
Compensation Fund
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The bill was created to try to find a
method to compensate individuals with
injuries due to lead poisoning and for
providing liability coverage to residential
rental property owners for lead poisoning
injuries
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The Workgroup
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The Bill requires that a workgroup be formed
under the auspices of the Insurance
Commissioner to evaluate and make
recommendations relating to lead liability
protection for owners of pre-1978 rental
property.
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The membership of the workgroup will include
two senators and two delegates and others from
the public sector. The Committee shall report
back to the Legislature by December 2012 with
its recommendations.
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It had been suggested during the Bill’s debate
that a fund be established by the State to
provide up to a specified amount of money for a
bona fide lead claim. The money was primarily
to come from fees per house charged against
property owners.
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No specific details about how this will be done
or how much it will cost have been set into law.
The only thing this law does is start the
‘discussion process’.
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At this point, the passage of this Bill is not a
Quick Fix for the Property Owners.
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HB 472/SB 177
This bill requires that a ground rent holder
must fully comply with the already existing
requirement of registering with the SDAT
before they can:
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 1) collect any ground rent payments due
under the ground lease;
 2) bring a civil action against the
leasehold tenant to enforce any rights the
ground rent holder may have under the ground
lease
 3) obtain a lien on the property.
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The Bill also voids that provision of the earlier
law which called for ground rents not registered
within a certain time period to be extinguished.
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House Bill 1373
House Bill 1373 requires DLLR to establish and
maintain an Internet-based Foreclosed
Property Registry to provide information
relating to foreclosure sales of residential
property.
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The law also establishes the Foreclosed Property
Registry Fund, the purpose of which is to support
the registry’s development, administration, and
maintenance. The matter is now being sent to
DLLR to institute the law. DLLR must report back
to the Legislature by Jan 1, 2013 as to its status.
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The law requires individuals who purchase a
property at foreclosure to file an initial
registration form within 30 days of the
foreclosure sale and a final registration form
within 30 days from the date the deed was
recorded. A fee will be designated for payment
with one or both forms.
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Failure to file could result in a fine up to
$ 1,000.00.
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Senate Bill 123
This law requires that a purchaser of residential
property sold at foreclosure provide a copy of
the Court Order ratifying the foreclosure sale to
the Supervisor of Assessments for the county in
which the property is located.
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House Bill 126
This bill expands the rights of the officers
and appointed individuals of a Condo
Association to enter a unit to make repairs.
It authorizes the entry in order to
investigate damage when it appears
necessary for public safety to other parts of
the condominium association
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The bill requires that the
council of unit owners make a reasonable effort
to notify the owner of the unit being entered in
order to investigate damage unless the situation
involves manifest danger to public safety or
property.
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This almost seems to amount to a ‘selfhelp’ provision in addressing urgent repairs
needed in a condo.
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Maryland Real Estate Commission
The statutory cap on the amount of a claim to
the Guaranty Fund has been raised from
$ 25,000.00 to $ 50,000.00. Also, the amount a
consumer may recover from the Fund without a
hearing before the Commission is $ 5,000.00
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With that kind of a “Bounty” on their heads,
real estate agents need to be especially careful
in doing their job.
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Pit Bull Controversy
In April 2012 the Court of
Appeals decided the Tracey
v. Solesky case in which it
found, as a matter of law
that Pit Bulls are inherently
dangerous.
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As a result of this ruling, the old “first bite is free”
law in Maryland no longer applies when the first
bite is made by a Pit Bull.
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Before the Court made this ruling, the law in
Maryland was that an animal first must show a
propensity to be dangerous before it could be
considered as such. Only after the first “bite”
could the owner be held liable in most cases
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Pursuant to the Court’s decision, if a Pit Bull
attacks someone both the owner of the dog
and the owner of property where the dog
resides can be sued. This would seem to
include Property Managers as well as
Owner/Operators.
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STUPID
LANDLORD
TRICKS
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Making my tenant my friend……………………
Please don’t insult the tenant by asking
them to sign a repair ticket……….
I’ll get the rent now, and the security when
they move in…………….
The lease says the tenant must take care
of all repairs so I don’t have that
responsibility………
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The inspector said “I passed” no need
to get it in writing…………….
Identify yourself as the ‘property
owner’ to your tenants once you hire a
property manager………..
“I got so damn mad at the tenant I
turned off their utilities………….”
They said they were moving anyway
so I trashed out their house……..
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After all this do you really want to
be an investor…………………………
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Thank You
Arnold Politzer
410-494-8433
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