Tenant's Right of First Refusal to Purchase Single-Family Dwelling in Baltimore City
(Baltimore City Code, Article 13, Subtitle 6)

APPLICATION
DEFINITIONS
PROCEDURE
SALES CONTRACT BETWEEN LANDLORD AND THIRD PERSON
STATEMENT OF RIGHTS
DATE OF SETTLEMENT
DEPOSIT OR "EARNED MONEY" REQUIRED FOR A SALES CONTRACT
FINANCING
LANDLORD'S COMPLIANCE
CHANGE OF TENANTS
COPY TO HCD
TRANSFER TO PERSON OTHER THAN TENANT
PENALTIES

This law provides that before any voluntary transfer of title, such as a sale, of a single-family residential rental property takes place, the tenant of that property has the right of first refusal to purchase it. The following transfers are permitted without first offering the property to tenant:

a) transfer to a husband, wife, child, parent, brother, sister or in-law of the landlord;

b) transfer by will or under the inheritance laws;

c) a gift to a religious, charitable or benevolent tax-exempt recipient;

d) transfer of title in a mortgage or deed of trust;

e) transfer to a government agency;

f) certain transfers related to creating a ground rent interest;

g) transfer of title in place of foreclosure of a mortgage or deed of trust;

h) sale of the individual property at public auction where the landlord had properly offered the property to the tenant and tenant did not accept the offer;

i) landlord has died, and the property is sold in the course of the administration of the estate;

j) a bona fide gift to certain relatives in addition to those listed in (a) above, and to their spouses and lineal descendants, including adopted, illegitimate, and step children;

k) (1) a transfer of title in which:

(I) the property is listed for sale with a bona fide third-party licensed real estate broker; and

(II) the tenant is notified in accordance with item (2) below, 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 Homeowership Institute in the Department of Housing and Community Development for information about the process of purchasing and financing a home.

(2)The written 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.

2. DEFINITIONS

"Tenant" means a tenant, subtenant or any person entitled to occupy a rental unit owned by another person. The tenant must have lived in the unit for at least 6 months. (But see also "10. Change of tenants," below) Where the rental unit had been occupied by a tenant at any time during the preceding 6 months, the last tenant to occupy it shall be considered the "tenant" under this law. However, any tenant who was evicted for non-payment of rent is not entitled to a right of first refusal for that property.

"Landlord" means a landlord, owner, agent, or anyone receiving or entitled to receive rent or other benefit for a residential rental unit in Baltimore City.

3. PROCEDURE

A) Before the landlord transfers title to a single family residential unit, he must mail to tenant a written offer of sale stating the sale price and the terms and conditions of the sale. The offer must be mailed first class, postage prepaid, and the sender must obtain a receipt from the post office. If tenant decides to accept the offer, he must respond within 30 days of the date the offer was mailed. Tenant must send his reply by first class mail, postage prepaid, and obtain a receipt from the post office. If tenant plans to use a federal, state, or city program to assist in financing or insuring the purchases, he must indicate the program in his notice to the landlord.

If landlord signs a sales contract with a third person before mailing an offer to tenant, or during the 30 days, landlord must mail a notice of the contract to tenant, in the same manner as provided above. Tenant has 30 days from the date of that mailing to indicate his willingness to buy the property for at least as much as the third party has offered. This second notice takes the place of the first notice.

B) After tenant has notified landlord of his intent to purchase, landlord must offer to tenant within 10 days a contract of sale signed by landlord (with same terms as in offer of sale or in third party contract). Tenant has 10 days after receipt of the contract, signed by landlord, to sign the contract and return it to landlord with the required deposit.

C) After the 30 day period has expired, if landlord enters into a contract with a third person for an amount less than that offered to tenant, or with terms materially more favorable to the buyer than in the contract offered to tenant, then tenant again has the right of first refusal in place of the third person. This time, tenant has 15 days from the date of the mailing of the notice. However, if more than 6 months have passed since tenant received an offer under A) above, or if the net proceeds of the contract with the third person are less than 80% of the offer to tenant in A) above, then tenant has 30 days from the date of mailing to respond.

4. SALES CONTRACT BETWEEN LANDLORD AND THIRD PERSON

Bulk Sales

The validity of the sales contract between landlord and a third person depends on compliance with this law, and the contract must so state.

Where the contract with the third person does not state the sale price in dollars, landlord's notice to tenant must state a cash equivalent in dollars.

Where tenant's dwelling is included in a bulk sale contract between landlord and a third party, and tenant decides to exercise his right to buy the dwelling, landlord may increase the price to tenant by up to 1.75% of the price offered to the third party.

5. STATEMENT OF RIGHTS

Every offer of sale to tenant must include a statement of tenant's rights under this law.

6. DATE OF SETTLEMENT

Settlement date may not be required to be less than 60 days after tenant signed the contract. Where tenant proposes to use a federal, state, or local program to help finance the purchase, settlement may not be required to be less than 90 days after tenant signed the contract.

7. DEPOSIT OR "EARNED MONEY" REQUIRED FOR A SALES CONTRACT

Where tenant proposes to use a government program to assist in the purchase, landlord may not require a deposit which is greater than the program requires. Where no government program in involved, the deposit may not be more than 7% of the sale price.

8. FINANCING

Landlord may not refuse to contract with tenant on the grounds that tenant proposes to use a government program to assist in financing.

The sales contract must give tenant at least 60 days to obtain financing, and must release him from the contract if he cannot get adequate financing within that time.

A provision in the sales contract requiring tenant to apply for financing within less than 7 banking days from the date tenant signs the contract is unreasonable and violates this law.

9. LANDLORD'S COMPLIANCE

If landlord transfers a particular property to a person who qualifies as a tenant under this law, landlord will be considered to be in compliance even if another person would qualify as a tenant.

If landlord makes a sales contract with a person defined as a tenant under this law, landlord will be considered to be in compliance even if that person is not the only tenant or is not the person with whom landlord had a lease.

10. CHANGE OF TENANTS

If there is a change of tenants after landlord has sent notice of the offer of sale, the new tenant is entitled to notification and the right to enter into a contract as a third party.

11. WAIVER OF TENANT'S RIGHTS

Tenant may not waive his right to receive an offer of sale or any notice required by this law. Tenant may waive his right to the time period for entering into a sales contract with landlord, and tenant may give to landlord the right to contract with or transfer title to a third person without waiting the required time period. Any such waiver by tenant must (a) be in writing and signed by tenant; and (b) state at top of the waiver that tenant is under no obligation to sign the waiver and cannot be evicted for refusing to sign the waiver.

Tenant may not be evicted for refusing to sign a waiver of his rights.

12. COPY TO HCD

When landlord sends an offer of sale to tenant, he must at the same time send a copy of the offer to the Commissioner of the Baltimore City Department of Housing and Community Development (HCD).

13. TRANSFER TO PERSON OTHER THAN TENANT

Where a single family residential rental dwelling is transferred to a person not the tenant, the landlord must file with the Land Records Office of Baltimore City a detailed affidavit (sworn statement) as outlined in the law. Proper filing of this affidavit will protect the transferee, his heirs, assigns, etc., from any claims of a tenant arising under this law.

14. PENALTIES

In addition to penalties related to making a false affidavit, if landlord violates any provision of this law, he is guilty of a misdemeanor and may be fined up to $500 for each offense.

Tenant may ask the court to enjoin a violation of this law.

Source: Baltimore Neighborhoods (BNI) - See main Landlord Tenant section for more information on BNI. Updated by the Maryland State Law Library (MSLL).

Last date legally reviewed: 10/29/08 (PLL/M.A.J.)