Recent state laws affect homeowners and tenants alike

MAILBAG

December 12, 2004

Some highlights of three laws approved during the Maryland General Assembly's 2004 session:

Security deposit interest

The Maryland Landlord-Tenant law required landlords of residential properties to accrue simple interest on tenants' security deposits of $50 or more. The law, which took effect Oct. 1, lowers the annual interest rate from 4 percent to 3 percent (House Bill 723).

Displaying the U.S. flag

Some condominiums, co-ops and subdivisions have restrictive covenants that prohibit or restrict owners and tenants from displaying insignia, including flags, on the exterior of their homes or residential apartments.

The new law states that a homeowner or residential tenant may not be prohibited from respectfully displaying one portable, removable U.S. flag on property in which the owner or tenant resides. The law, which went into effect Oct. 1, allows the board of directors of a condominium, housing cooperative or a landlord to adopt reasonable rules and regulations regarding the placement and manner of the display of the U.S. flag (House Bill 1017).

Refinancing residential mortgages by trusts

Maryland law allows an exemption from recordation tax when homeowners refinance their principal residence. The refinance exemption was not available for residential properties owned by trustees. A new law, effective July 1, extends the recordation tax exemption to trustees if the property is used as the principal residence of the person who established the trust (the "settlor") and the trustee or the settlor originally assumed or incurred debt secured by the mortgage or deed of trust on the residence (Senate Bill 76).

The new law benefits folks who during their lifetime deed their principal residence to a trust for estate planning purposes and puts them in the same position as individual homeowners.

To review a full text of any Maryland bill, go to the Maryland Legislature's Web site mlis.state.md.us; scroll down to the box on the left center of the page and insert the bill number.

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