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LEGISLATIVE ALERT
NEW LEAD-BASED PAINT RULE
NOW EFFECTIVE
A New Rule Affecting REALTORS® and Property Managers
A rule issued by the Environmental Protection Agency (EPA) requiring the use of lead-safe practices for renovation work went into effect Thursday, April 22, 2010. Under the rule, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes built before 1978, and certain other properties must be certified and must follow specific work practices, including testing, to prevent lead contamination.
To learn more about these regulations and how they will affect real estate transactions, click here to access short webcasts offered by NAR. Information for REALTORS®, property managers, other professionals and consumers is available through the Environmental Protection Agency at epa.gov. Also see the EPA's Renovation Compliance Guide.
KEY LEGISLATION AFFECTING REALTORS®
FROM THE 2010 MARYLAND GENERAL ASSEMBLY
Key legislation affecting MD CEU for license renewals, transfer fees, semi-annual property tax payments, taxation of forgiven debt in short sales, and many other issues important to our industry and homeownership, was debated and passed in the latest General Assembly session. Learn about these key issues below:
HB 590 / SB 657 -- Prohibit the Taxation of Forgiven Debt in Short Sales - SUPPORT
Prince George's and two other counties (Anne Arundel and Montgomery) recently implemented policies that imposed recordation and/or transfer taxes on the forgiven debt in short sales transactions. Prince George's County has been under a verbal reprieve only from this additional tax. HB 590 / SB 657 makes 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.
STATUS: Passed - Effective on the date the Governor signs the bill into law.
HB 1298 / SB 666 -- Prohibit Private Transfer Fees - SUPPORT
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.
STATUS: Passed - Effective on the date the Governor signs the bill into law.
HB 62 -- Septic Legislation Correction - SUPPORT
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.
STATUS: Passed - Effective October 1, 2010
HB 999 / SB 686 -- Storm Water Management Fees - OPPOSE
MAR opposed similar legislation last year. These bills would have required all residential and commercial properties to pay a stormwater "fee" even if those properties already manage all of their stormwater on-site. There are already multiple layers of tax on real property and MAR opposed these bills again this year.
STATUS: Not Passed.
HB 1209 / SB 1083 -- Semi-Annual Taxation for Non Owner-Occupied Properties
- SUPPORT
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.
HB 1291 / SB 952 -- Energy Disclosure for Maryland Properties - OPPOSE
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.
STATUS: Not Passed.
HB 83 and HB 406 -- Real Estate Commission Legislation - SUPPORT
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.
STATUS: Passed. Effective October 1, 2010.
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 the team leader in advertisements, and disclose the business relationship between team members when a dual agency situation arises.
STATUS: Passed. Effective October 1, 2010.
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