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NEW LEGISLATIVE LAW IN EFFECT JANUARY 26, 2009

By
Real Estate Agent with RE/MAX Realty Services

Montgomery County Maryland is a very consumer oriented county.  As a home buyer you will have so much information disclosed to you prior to the purchase of your home.  Everything from reviewing county Master Plans, to any inspections you may want on a property.  A relatively new law is that the first year's property taxes must be prominently displayed on any advertisement of a property.

This information that I am posting here is  a new legislative update from The Greater Capital Area Association of Realtors in regard to Development Districts, specifically Germantown and Kingsview Village and Clarksburg. 

I will be looking into this for specific details and posting on the information as I get it.

Legislative Update
Thursday, January 22, 2009

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New Development District Disclosure Law in Montgomery County
Applies to any sales contract signed and any sales material or advertisement for sale disseminated on or after January 26, 2009

Throughout 2008, GCAAR sent several messages to inform agents of a new disclosure law regarding development districts and proposed development districts that would go into effect in early 2009.  Several months ago GCAAR also informed members that the legislation was pending approval and waiting for the County Executive's signature.  It has just recently come to GCAAR's attention that the law now goes into effect on Monday, January 26, 2009.  The enforcing agency, Montgomery County's Office of Consumer Protection (OCP), will continue to work with GCAAR on how the law will be implemented.  The law goes into effect on Monday, January 26 and sellers should comply with the law.  Please be assured that OCP will continue to work with GCAAR and the Department of Finance in order to implement the law and to provide assistance to sellers and their agents.  Below is some background again on the law and the requirements that must be met by sellers starting January 26:

Background:
In response to issues in the Clarksburg area in late 2007, legislation was introduced by lead sponsor Councilmember Duchy Trachtenberg that related to the establishment of development districts in the Clarksburg area.  Bill 36-07 had many different aspects, but specifically as it related to the real estate contract, the legislation was introduced to strengthen the seller disclosure requirements for buyers and potential buyers of property in development districts, and to allow persons who suffer loses as a result of required information not being disclosed to recover damages.  GCAAR worked closely on monitoring the legislation and 2008 President Dennis Melby testified in January 2008 in opposition to the legislation, but also made several recommended changes, should the County Council move forward with the legislation.  The Council's Management and Fiscal Policy (MFP) committee held several worksessions on the legislation and accepted some of GCAAR's recommended changes as they related to the disclosure requirements for sellers.  For example:

  • Original legislation called for the tax disclosure to be in 14 point font, but now states the disclosure must be displayed "prominently."
  • Disclosure in advertising will follow the same principle as the Post-Purchase Property Tax Disclosure Law
  • Information on development districts and proposed development districts will be listed in the deed and land records
  • County will provide a tool for sellers to find the appropriate tax amounts to disclose       

The MFP Committee approved the legislation and the full Council gave final approval at the end of 2008.  The County Executive then signed the legislation.

Applicability of Law:The law applies to sellers of real property located in a development district OR a proposed development district.  Currently, the only areas with development districts and proposed development districts are located in Clarksburg and Germantown.  For the two districts currently implemented (bonds issued, taxes levied), unique tax classes have been established and these development tax districts are identified as tax class RO61 (Kingsview Village Center) and RO64 (West Germantown). (note - Kingsview Village is made up of just four commercially owned properties).  The tax class shows up on the left side of the on-line property tax bill.  For Clarksburg, there is one development tax district already formed and there are two proposed development districts.  However, the tax classes have not been set up yet.  In the case of Clarksburg, OCP is working with Finance to see if maps of these areas can be provided.  Information regarding development tax districts can be found in the FAQ section on the Department of Finance's webpage. http://www.montgomerycountymd.gov/mcgtmpl.asp?url=/content/finance/CountyTaxes/InfoTaxes/faqtaxes.ASP#district

Specifications of Law:

  1. Before signing a contract the seller must disclose to any buyer during the life of any development district created (this disclosure information will be provided in GCAAR Form #900 to be updated by February 1):
    1. the amount of any special assessment, special tax, fee, or charge which the buyer must pay; OR
    2. if that amount cannot readily be determined, provide a way for calculating the amount to enable the buyer to estimate the maximum amount they will pay

 

  1. Any advertisements, sales brochures, signs, or other sales material** that seller creates or authorizes must include:
    1. the property is or would be located in a development district; AND
    2. any potential buyer should ask the seller about the additional taxes and other charges for which a property owner in the district may be liable

**NOTE: the information required for advertisements will follow the same principles as the Post-Purchase Property Tax Disclosure Law, where you do not have to disclose it in ads that are smaller than 16 square inches (i.e. newspaper ads) or on the initial screen listing as long as the information appears elsewhere on that listing
Penalty for Non-compliance:

  • Any contract which does not disclose all information required by law is voidable at the option of the buyer before the date of settlement.
  • Any person who does not comply with this disclosure is liable for damages sustained by a buyer or potential buyer because of that person's failure to provide any required notice or information.  HOWEVER, a seller or the seller's agent is NOT liable for an incorrect estimate of the amount of any tax, assessment, fee or charge disclosed if the seller relied in good faith on a method approved or recommended by the County to estimate that amount. 

If you have any questions please contact Meredith Weisel, GCAAR VP of Public Policy and Legal Counsel at mweisel@gcaar.com.  Questions may also be directed to the Office of Consumer Protection at 240-777-3636 or email at ConsumerProtection@montgomerycountymd.gov

 

Greater Capital Area Association of REALTORS®
8757 Georgia Avenue, Suite 600 * Silver Spring, MD 20910
Phone: 301.590.2000 * Fax: 301.590.2248 *
www.gcaar.com
©GCAAR 2009

 

 

Comments (3)

Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Audrey:  I love how on top of all the new, required disclosures you are.  It's always a great idea to post anything affecting home sellers in your area.

Jan 23, 2009 08:42 AM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Audry, call me old fashioned, but I don't think it's possible to have too much disclosure!

Jan 23, 2009 10:03 AM
Diane Aurit
LKN Realty, LLC - Mooresville, NC
Lake Norman Real Estate

This is great, hot off the press information for your clients.  It shows how important it is for their agent to be proactive regarding new laws and legislation and that you are very proactive!

Jan 24, 2009 01:41 AM