Chapter 07. Raffles of Real Property
Regulation .01 Definitions.LinkCopy Citation
A.
In this chapter, the following words have the meanings indicated.
B.
Terms Defined.
(1)
“Bona fide charitable organization” or “charitable organization” means a nonprofit organization that:
(a)
Is established for benevolent, charitable, educational, eleemosynary, humane, patriotic, philanthropic, or religious purposes; and
(b)
To the extent required by Business Regulation Article, Title 6, Annotated Code of Maryland, is currently registered with the Secretary of State or is exempt from registration.
(2)
“Bona fide charitable organization” or “charitable organization” does not include a political party, political committee, or political club.
(3)
“Person” means any individual or any partnership, firm, association, corporation, or other entity.
(4)
“Raffle” means:
(a)
A drawing made from a single series of chances that are sold, for money or other valuable consideration, by means of chance books, pursuant to which drawing a winner is selected to receive a prize or award consisting of real property; or
(b)
Any undertaking to advertise the holding of a raffle or the sale of raffle chances.
(5)
“Real property” means:
(a)
Land or any interest in land; and
(b)
That which is affixed to the land.
Regulation .02 General.LinkCopy Citation
A.
Only a bona fide charitable organization may conduct a raffle of real property under authority of Criminal Law Article, §12-106, Annotated Code of Maryland.
B.
A charitable organization may not sell, advertise for sale, or offer for sale in this State any chance for a raffle of real property except in accordance with this chapter.
Regulation .03 Required Permits and Filings.LinkCopy Citation
A.
Before a charitable organization may advertise or conduct a raffle or real property in this State, the charitable organization shall:
(1)
Obtain any applicable license or permit to conduct a raffle from the political subdivision of this State in which the real property to be raffled is located;
(2)
At least 10 business days before the charitable organization advertises the raffle or sells any chance, file a disclosure statement with the Secretary of State on the form provided by the Secretary of State for that purpose; and
(3)
Before the submission of a disclosure statement for any raffle in a calendar year, satisfy the requirements of this chapter for all prior raffles in the calendar year.
B.
The disclosure statement shall include, but not be limited to, the following information:
(1)
The name and address of the charitable organization that is conducting the raffle;
(2)
The address of the real property to be raffled and a brief description of that property;
(3)
The date and time the charitable organization will select the winner of the raffle, and the location of the drawing;
(4)
The amount of consideration to be paid for each chance;
(5)
A good faith estimate of the current fair market value of the property to be raffled and, if applicable, a photocopy of the appraisal required by Regulation .04B of this chapter;
(6)
The amount and nature of all liens or encumbrances on the property, if any, that will remain the responsibility of the winner on transfer of the property to the winner;
(7)
A good faith estimate of the amount of the closing costs, if any, that the winner will have to pay to acquire title to the property;
(8)
The name, business and home addresses, and business and home telephone numbers of an authorized representative of the charitable organization conducting the raffle;
(9)
A photocopy of all agreements between the charitable organization and the party that sold or is selling the real property to the charitable organization, which shall evidence the charitable organization's title to the real property and reflect the purchase price paid or to be paid by the charitable organization for that property;
(10)
A photocopy or sample of the chance tickets to be sold; and
(11)
The conditions, if any, under which the charitable organization reserves the right to cancel the raffle, together with a description of the method by which the charitable organization will refund the purchase price paid for any chances bought before cancellation.
Regulation .04 Requisite Title to Property.LinkCopy Citation
A.
Before a charitable organization may advertise or conduct a raffle of real property in this State, the charitable organization shall own at least equitable title to the real property to be raffled.
B.
If the charitable organization has obtained or will obtain equitable or other title to the real property pursuant to a conditional sales agreement, an option, or any similar arrangement that is in any way dependent or conditioned on the actual holding of or the outcome of the raffle, the purchase price to be paid by the charitable organization for the real property may not exceed the current fair market value of the property, as evidenced by a bona fide independent appraisal of the property made within 90 days preceding the date on which the drawing is to be held.
C.
The amount of the purchase price paid or to be paid by the charitable organization for the real property may not be conditioned on the amount of the proceeds received or to be received by the charitable organization from the sale of chances.
Regulation .05 Receipts and Notices.LinkCopy Citation
A.
A charitable organization conducting a raffle of real property may not sell any chance unless, at the time of sale, the purchaser is given a written receipt for each chance bought, in the form of a ticket that contains:
(1)
The name and Maryland address of the organization that is conducting the raffle;
(2)
The address of the real property to be raffled and a brief description of that property;
(3)
The date and time the organization will select the winner of the raffle, and the location of the drawing;
(4)
The amount of consideration paid for the chance;
(5)
A notice to the purchaser that a complete disclosure statement regarding the raffle is available, on request and at no cost, from the charitable organization;
(6)
A notice that the winner is responsible for any liens, encumbrances, closing costs, and applicable taxes unless otherwise provided in the disclosure statement; and
(7)
If needed, a notice that, if the raffle is cancelled, a percentage of the price of a chance may be retained by the charitable organization for administrative costs.
B.
A written notice advertising the raffle shall include the information required in §A of this regulation.
C.
The charitable organization shall obtain the name and address of each purchaser of a raffle chance.
D.
Disclosure Statement.
(1)
The charitable organization shall provide each purchaser of a chance, on request and at no cost to the purchaser, a copy of the disclosure statement filed with the Secretary of State.
(2)
Before the transfer of title to the raffle winner, the charitable organization shall provide the winner with a copy of the disclosure statement and obtain a signed acknowledgment of its receipt from the winner.
(3)
A copy of the signed acknowledgment shall be filed with the Secretary of State and retained by the charitable organization for a minimum of 3 years after the winner acknowledges receipt of the disclosure statement.
(4)
The disclosure statement provided to any purchaser of a chance and to the raffle winner shall include a statement that the disclosure statement has been placed on file with the Secretary of State of Maryland.
Regulation .06 Delivery of Prize.LinkCopy Citation
Within 90 days of the selection of the winner of the raffle, legal title to the real property raffled shall be transferred to the winner, as evidenced by a recording of the transfer in the land records of the political subdivision in which the real property is located.
Regulation .07 Accounting of Income and Expenditures.LinkCopy Citation
Within 90 days after the selection of the raffle winner, the charitable organization shall file with the Secretary of State an accounting of all income and expenditures associated with the raffle on forms provided by the Secretary of State for that purpose.
Regulation .08 Contracting for the Conduct of Raffles.LinkCopy Citation
A.
If a charitable organization undertaking a raffle of real property agrees to compensate any other person for assistance in conducting the raffle, the charitable organization shall file a copy of that agreement, which shall be in writing, with the Secretary of State within 10 days of its execution.
B.
Any party to that agreement, other than the charitable organization, shall register with the Secretary of State as a “professional solicitor”, pursuant to the provisions of Business Regulation Article, Title 6, Annotated Code of Maryland, and conform with all applicable provisions of those sections.
Regulation .09 Use of Proceeds.LinkCopy Citation
Except as otherwise expressly authorized in these regulations:
A.
All proceeds from a raffle of real property shall be received by the charitable organization conducting the raffle and, after payment of the reasonable costs and expenses related to the raffle, may only be used by the charitable organization in furtherance of its charitable purposes; and
B.
No other person or group of persons may benefit financially from, receive, or be paid any of the proceeds from the raffle.
Regulation .10 Canceled Raffles—Refunds.LinkCopy Citation
A.
Except as provided in §B of this regulation, the charitable organization shall reimburse each purchaser of a chance with the full purchase price paid by that purchaser if the charitable organization cancels the raffle after chances have been sold and before the winner is selected.
B.
If proper notice is given as provided in Regulation .05A of this chapter, the charitable organization may retain up to 1 percent of the price of a chance to cover administrative costs.
Chapter annotations
Authority: Criminal Law Article, §12-106, Annotated Code of Maryland
History: Effective date: March 28, 1983 (10:6 Md. R. 551)
History: Regulation .01B amended effective October 3, 1988 (15:20 Md. R. 2333)
History: Regulation .07C amended effective October 3, 1988 (15:20 Md. R. 2333)
History: Chapter revised effective November 13, 2000 (27:22 Md. R. 2059)