2012 baltimore reia presentation m. arnold politzer attorney at law

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2012 Baltimore REIA Presentation

M. Arnold PolitzerAttorney at Law


The 2012 Legislative Session

What Happened

and

How will it affect owning and

operating investment Property


ANOTHER FUN YEAR FOR THE REAL ESTATE INVESTOR


Making Money in Real Estate is EasyRight ?


Reversal of part of the Lead Paint Law

Court of Appeals CaseJackson et al. v. Dackman Co. et al (October 2011)


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


This decision led to a number of new bills proposed in the 2012 Legislature

Of the Bills proposed 2 significant Bills passed


House Bill 644

Makes important changes to the

Reduction of Lead Risk in Housing Law Act

(the ‘Lead Law’)


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


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”


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.

12www.MarylandRealEstateLaw.com

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”


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.


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.


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.


House Bill 472

This bill is hoped to eventually

establish a Lead Poisoning

Compensation Fund


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


The Workgroup


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.


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.


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.


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’.


At this point, the passage of this Bill is not a

Quick Fix for the Property Owners.


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:


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.


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.


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.

House Bill 1373


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.


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.


Failure to file could result in a fine up to $ 1,000.00.


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.


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


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.


This almost seems to amount to a ‘self-

help’ provision in addressing urgent repairs

needed in a condo.


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


With that kind of a “Bounty” on their heads,

real estate agents need to be especially careful

in doing their job.


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.


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.


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


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.


STUPID LANDLORD

TRICKS


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………


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……..


After all this do you really want to be an investor…………………………


Thank You

Arnold Politzer

410-494-8433

www.MarylandRealEstateLaw.com

2012 baltimore reia presentation m. arnold politzer attorney at law

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