In this subtitle the following words have the meanings indicated. “Affordable housing land trust” means an entity that: Provides affordable housing to low–income families and moderate–income families through an affordable housing land trust agreement; and Is organized or managed by: A nonprofit organization exempt from taxation under § 501(c)(2), (3), or (4) of the United States Internal Revenue Code; or A unit or instrumentality of the State or a political subdivision of the State. “Affordable housing land trust agreement” means an agreement between an affordable housing land trust and a purchaser of real property owned by the affordable housing land trust, or for which the affordable housing land trust has a proprietary or reversionary interest, that: Grants the affordable housing land trust a preemptive right to purchase or repurchase the property, including any improvements on the property; Contains language restricting the transfer, lease, sublease, assignment, or occupancy of the property with regard to: Potential transferees, sublessees, assignees, or occupants; and The price at which the property may be transferred; or Imposes other conditions on the use or transfer of the property that would trigger a reversionary interest and that are designed to ensure that the property remains available and affordable to low–income families and moderate–income families. “Family” means a household consisting of one or more individuals. “Low–income family” means a household with an income that does not exceed 80% of the area median income for a household of the same size. “Moderate–income family” means a household with an income that does not exceed 140% of the area median income for a household of the same size. “Nonprofit status” means the recognition by the Internal Revenue Service that an affordable housing land trust is exempt from taxation under § 501(c)(2), (3), or (4) of the Internal Revenue Code.

An affordable housing land trust agreement created under this subtitle: Is not a ground lease; and Is not subject to any provision concerning ground leases under Title 8 of this article or Subtitle 1 of this title or under any other provision of the Code. This subtitle does not apply to any ground lease that is subject to Title 8 of this article or Subtitle 1 of this title. This subtitle may not be construed to exempt any affordable housing land trust or any affordable housing land trust agreement from any provision of law mandating equal treatment or prohibiting discrimination.

In this section, “Department” means the State Department of Assessments and Taxation. Each affordable housing land trust shall register its creation with the Department on a form prescribed by the Department. An affordable housing land trust shall submit updates relating to its organization, tax status, address, officers, and any other information as required by the Department. The Department shall maintain an online list of registered affordable housing land trusts in the State. The Department is not responsible for the completeness or accuracy of the contents of the online list or the accuracy of any registration. The Department shall adopt regulations to carry out and enforce the provisions of this section.

In accordance with this subtitle, an affordable housing land trust may: Acquire residential real property; Acquire an interest in property for the construction of residential real property; Make improvements on residential real property; Enter into affordable housing land trust agreements with persons who meet the criteria set out in this subtitle and any other criteria as established in the affordable housing land trust agreement for the transfer of an interest in residential real property; and Engage in other activities related to the sale, leasing, management, maintenance, and preservation of properties under the control of the affordable housing land trust.

An affordable housing land trust agreement may: Restrict the transfer, lease, sublease, or assignment of possession or of any interest in the property to a person who does not meet the conditions set forth in the affordable housing land trust agreement for that property; Grant the affordable housing land trust the right to repurchase any interest in the property and any improvements on the property under terms set forth in the affordable housing land trust agreement and in accordance with the requirements of § 14–506 of this subtitle; Grant the affordable housing land trust the right to take possession of the property and sell the property if a condition defined in the agreement is met and in accordance with the requirements of § 14–507 of this subtitle; Provide for the reversion of the property at the end of the term of the affordable housing land trust agreement under conditions set forth in the agreement; Provide a mechanism or formula for the sharing of any proceeds from a future sale or transfer of an interest in the property under terms set forth in the agreement; and Provide other mechanisms to enforce the terms of the affordable housing land trust agreement. An affordable housing land trust shall record any affordable housing land trust agreement in accordance with subsection (f) of this section and Title 3 of this article. An affordable housing land trust agreement: May not extend for a term longer than 99 years; and May be renewed under conditions set forth in the agreement. An affordable housing land trust agreement shall: Be in writing; and Clearly identify each term and condition. A copy of an affordable housing land trust agreement shall be provided to the purchaser of any property covered by the agreement at least 15 days before the purchaser enters into a contract acquiring an interest in or possession of any property covered by the agreement. If a copy of the affordable housing land trust agreement is not provided as required under this subsection, a contract entered into by a purchaser of any property covered by the agreement is voidable by the purchaser. The failure to provide a copy of the affordable housing land trust agreement as required under this subsection is cause for the rescission of any transaction involving the transfer of any interest in the property by the purchaser. A copy of the affordable housing land trust agreement and a signed, notarized affidavit acknowledging receipt of the affordable housing land trust agreement by the transferee shall be: Recorded in the land records of the county in which the property is located; Indexed in the grantor and grantee indices with the seller as grantor and the purchaser as grantee; and Notwithstanding the fact that a copy of the affordable housing land trust agreement, rather than the original, is offered for record with the affidavit, accepted for recording by the clerk without payment of recordation and transfer taxes. Recordation of a copy of the affordable housing land trust agreement and the affidavit: Terminates the right of rescission; and Provides a conclusive presumption that a contract of sale was not rescinded. The terms of an affordable housing land trust agreement may be modified or changed only with the written consent of all the parties.

Subject to paragraphs (2) and (3) of this subsection, an affordable housing land trust agreement may authorize the affordable housing land trust to repurchase any interest in the property covered and any improvements on it under conditions set forth in the agreement. The time period during which the affordable housing land trust may exercise the right to repurchase shall be set forth in the affordable housing land trust agreement and may not exceed 120 days from the date that the affordable housing land trust receives notice of an event that would give the affordable housing land trust the right to exercise the right to repurchase. The failure of an affordable housing land trust to exercise the right to repurchase does not prohibit the affordable housing land trust from exercising any other right established in the agreement, including the right to share in the proceeds of the first sale to a purchaser following the failure of the land trust to exercise its right to repurchase. Except as provided in subsection (a)(3) of this section or in the affordable housing land trust agreement, the failure to exercise a right to repurchase extinguishes the right of the affordable housing land trust to exercise any reversionary interest in the future. A subsequent purchaser who acquires the specified interest in the property in an arms–length, third–party transaction for a fair market price after the affordable housing land trust has not exercised its right to repurchase receives title, free of any rights established in the affordable housing land trust agreement that would otherwise have been enforceable by the affordable housing land trust. A seller who sells the specified interest in the property to a purchaser in an arms–length, third–party transaction for a fair market price after the affordable housing land trust has failed to exercise its right to repurchase shall execute a signed, notarized affidavit attesting to the fact of the seller’s notification to the affordable housing land trust and the affordable housing land trust’s failure to exercise its right to repurchase. The affidavit shall be recorded with the deed transferring the specified interest in the property to the purchaser in accordance with § 14–505(f) of this subtitle. Recordation of the affidavit under this paragraph provides a conclusive presumption of the fact that the affordable housing land trust failed to exercise its right to repurchase.

An affordable housing land trust agreement may authorize the affordable housing land trust to take possession of the property and any improvements and sell or transfer the specified interest in the property if: A condition defined in the affordable housing land trust agreement authorizing the action is met; The sale is made under Title 14, Chapter 300 of the Maryland Rules; The owner of the interest in the property retains the right to any proceeds of a sale as set forth in the affordable housing land trust agreement; and The right of the owner to the proceeds has precedence over any claim by the affordable housing land trust to the proceeds of the sale.

The reversionary rights of an affordable housing land trust as set forth in the affordable housing land trust agreement are limited to provisions that relate to: The transfer of the property to a person who is not a party to the agreement or a person who does not meet the conditions set forth in the affordable housing land trust agreement; The possession of the property by a person who does not meet the conditions set forth in the affordable housing land trust agreement; The transfer of an interest in the property to a person who does not meet the conditions set forth in the affordable housing land trust agreement; The waste, destruction, or abandonment of the property; or The failure to comply with any financial provision in the affordable housing land trust agreement.

In any assessment for tax purposes of property subject to an affordable housing land trust agreement, the property shall be assessed based on its market value subject to any restrictions in the affordable housing land trust agreement. The assessment shall note that the sale was not an arms–length transfer on the property tax record.

A nonprofit organization operating an affordable housing land trust that gives up or loses its nonprofit status may no longer operate an affordable housing land trust under the terms of this subtitle. A nonprofit organization operating an affordable housing land trust may transfer its interest in any affordable housing land trust agreement to another affordable housing land trust, provided that the nonprofit organization does not receive any financial or other valuable compensation for the transfer other than compensation for incidental costs associated with the transfer. If a nonprofit organization operating an affordable housing land trust gives up or loses its nonprofit status and does not transfer its interest in an affordable housing land trust agreement as provided in subsection (b) of this section, the affordable housing land trust agreement is abrogated and any reversionary interest contained in the agreement or any provision for the sharing of proceeds becomes unenforceable. If an affordable housing land trust agreement becomes unenforceable, the title holder to the property obtains fee simple title to the property without restriction.

This subtitle may be cited as the Affordable Housing Land Trust Act.