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House passes correction to tenants’ right-of-first-refusal law; supporters say it fixes title risk, critics warn of costs
Summary
House Bill 872, described as correcting a drafting error about third‑party purchasers and tenant right-of-first-refusal, passed on third reading. Sponsors called it a typo fix to protect third‑party buyers; some members worried the change could increase closing costs or adversely affect tenants.
Annapolis, Feb. 24 — The House approved House Bill 872 on third reading, a bill described by sponsors as a correction to last year’s language on tenants’ right of first refusal that affects third‑party purchasers.
Supporters said the bill repairs an unintended consequence in last year’s statute that could cloud titles for new owners. “This is a pro third‑party purchaser bill that the third‑party purchaser landlord community asked me to put in,” said the delegate who sponsored the corrective measure, adding the change restores normal market practice for purchasers and clears title risk created by prior language.
Opponents raised concerns about how the change could affect tenants and closing costs. The delegate from Saint Mary’s County (speaking in opposition) said adding a “third party” to the right of first refusal could effectively place lenders or banks into tenants’ purchase negotiations and might lead to higher closing costs. A land‑title practitioner who spoke in favor said many landlords asked for the correction and he supported the bill.
Vote: The clerk recorded 104 votes in the affirmative; the bill received a constitutional majority and was declared passed.
Context: Sponsors characterized the measure as fixing a drafting problem that made third‑party purchasers potentially liable when prior owners failed to notify tenants of purchase rights. Supporters said the bill prevents title clouds for future buyers; some members nonetheless urged caution about downstream effects on tenants and transaction costs.
