New Year, New & Updated Forms

Taylor Kitzmiller, Esq.
Associate Counsel at Maryland REALTORS^®.

Presenting our October 2024 Statewide Forms: Update on Changes and Practice Tips

Each fall, Maryland REALTORS^® presents updates to its Statewide Forms Library, which contains the form contracts, disclosures, and addenda that members use to service clients and bring real estate transactions to settlement. This article is designed as a guide for Maryland REALTORS^® members to understand the revisions to existing forms and the creation of new forms, which went into effect as of October 1, 2024.

As always, brokers and office managers seeking additional support are welcome to contact our Legal Affairs Department attorneys to schedule Statewide Forms Update sessions for their agents. Association attorneys are also available via our Legal Hotline service to answer questions about all of our Statewide Forms.

NEW FORMS

National Priorities List (NPL) Superfund Site Disclosure Addendum

HB 486, passed during this last legislative session, requires sellers of a property located within one mile of a National Priorities List (NPL) Superfund site to include an addendum to the contract that includes information on NPL Superfund sites. Buyers have the right to terminate the contract within 5 days after receiving the addendum. The new National Priorities List (NPL) Superfund Site Disclosure Addendum allows the seller to disclose the existence of a NPL Superfund Site(s) located within one mile of the property and advises the buyer of their right to terminate the Contract of Sale within five days after executing the Addendum.

Practice Tip – Sellers can determine if their property is located within one mile of a NPL Superfund Site by going to https://map22.epa.gov/cimc/superfund.

REVISED FORMS

Residential Contract of Sale

• The new NPL Superfund Site Disclosure Addendum has been added to the list of Addenda/Disclosures in Paragraph 11.
• HB 11, passed during this last legislative session, requires a contract of sale for property with a private or domestic water supply well to allow the buyer to test the water quality of the well. The buyer may waive their right to have the water quality of the well tested. This information has been added as Paragraph 29. At the bottom of Paragraph 29, the buyer may either initial that the Water Quality Test Addendum is attached to the Contract of Sale or initial that they waive their right to have the well tested.

Water Quality Test Addendum

HB 11, passed during this last legislative session, requires a contract of sale for property with a private or domestic water supply well to allow the buyer to test the water quality of the well. The buyer and seller will use the Water Quality Test Addendum to conduct the water quality test of the well. Previously, the buyer only had to provide the water quality test results to the seller if the buyer was unsatisfied with the test results. However, HB 11 requires both the buyer and seller to be provided with the test results. Thus, the Water Quality Test Addendum has been revised to require the buyer to supply the test results to the seller regardless of whether the buyer is satisfied with the test results.

Release of Deposit Agreement

Senate Bill 651, passed by the Maryland General Assembly in 2023, changed the process for the release of an earnest money deposit when the Buyer terminates the Contract pursuant to a contingency. Under the new law, if a Buyer terminates the Contract pursuant to a contingency as defined by Section 10-803(a)(2) of the Real Property Article, Annotated Code of Maryland, they may provide a written notice to the Seller and

the holder of the deposit requesting the full return of the deposit. If the Seller wants to protest the release of the deposit, Seller must provide the holder of the deposit with a notarized, written request for mediation relating to the release of the deposit within ten (10) days of receipt of the Buyer’s request. If the Seller does not protest the release of the deposit or if they fail to provide the holder of the deposit with a notarized, written request for mediation within the ten (10) day period, the holder of the deposit shall distribute the deposit to the Buyer within thirty (30) days of receipt of the Buyer’s request. This explanation of the release of deposit procedure has been added to the Release of Deposit Agreement along with a list of contingencies that trigger the new release of deposit procedure.

Exclusive Right to Sell Residential Brokerage Agreement

• HB 11, passed during this last legislative session, requires a contract of sale for property with a private or domestic water supply well to allow the buyer to test the water quality of the well. Paragraph 30 has been added to allow the seller to notify the broker if there is a private or domestic water supply well located on the property.
• HB 486, passed during this last legislative session, requires sellers of a property located within one mile of a National Priorities List (NPL) Superfund site to include an addendum to the contract that includes information on NPL Superfund sites. Paragraph 31 has been added to allow the seller to notify the broker if a NPL Superfund site is located within one mile of the property.
• The NPL Superfund Site Disclosure Addendum has been added to the list of addenda in Paragraph 35.

Condominium Resale Notice/Condominium Resale Disclosure Certificate Council Of Unit Owners/ Resale of Condominium Unit Acknowledgment/Condominium Resale Disclosure and Transmittal of Documents From Seller as Unit Owner

HB 143, passed during this last legislative session, requires a unit owner to provide a statement, no later than 15 days prior to closing, on their knowledge of the presence of asbestos in the unit and whether abatement has been performed during the occupancy of the owner. The condominium documents have been updated with new statutory language that requires the disclosure of any knowledge of asbestos in the unit and whether abatement has been performed during the occupancy of the owner.

VA Financing Addendum

Previously, there was confusion over the buyer’s options when the Certificate of Reasonable Value is less than the amount of the Contract price. We have added language to clarify that the buyer has five (5) days to either: (1) take no action which will result in the Contract becoming null and void at the end of the five (5) day period; (2) notify the Seller that they agree to move forward with the Contract at the Contract Price; or (3) negotiate with the Seller to lower the Contract Price. If the parties agree to lower the Contract Price during the five (5) day period, the Buyer covenants and agrees to be bound to proceed with consummation hereof at the agreed upon Contract Price. If, after negotiations, the Seller refuses to lower the Contract Price, but the Buyer still wants to proceed with the Contract at the Contract Price, the Buyer must notify the Seller in writing of their intention to do so before the five (5) day period expires, or the Contract will become null and void.

General Residential Dwelling Lease Template

HB 139, passed during this last legislative session, requires a landlord to provide a copy of the utility bill to the tenant if the tenant pays the landlord directly for the cost of utilities. HB 693, passed during this last legislative session, limits the maximum amount for a security deposit to one month’s rent. We have revised the General Residential Dwelling Lease Template to note that the maximum amount of security deposit can be one month’s rent and have clarified the landlord’s responsibility to provide the tenant with a copy of the utility bill to the tenant if the tenant pays the landlord directly for the cost of utilities.

• We have clarified the required amount of notice that a landlord must provide to a tenant prior to the tenant vacating the property at the end of their lease term.
• We have added the ability to specify a repair deductible amount that a tenant is responsible for paying for damages in excess of ordinary wear and tear.
• We have added the ability to specify the minimum amount of tenant liability insurance that the tenant must obtain.

Unimproved Land Contract of Sale

• The Buyer’s Request for Seller’s Compensation of Buyer’s Broker Addendum has been added to the list of addenda in Paragraph 11.
• HB 11, passed during this last legislative session, requires a contract of sale for property with a private or domestic water supply well to allow the buyer to test the water quality of the well. The buyer may waive their right to have the water quality of the well tested. This information has been added as Paragraph 34. At the bottom of Paragraph 34, the buyer may either initial that the Water Quality Test Addendum is attached to the Contract of Sale or initial that they waive their right to have the well tested.