Section 8-708 - Extinguishment of reversionary interest.
§ 8-708. Extinguishment of reversionary interest.
(a) In general.- If a ground lease holder does not satisfy the requirements of § 8-707 of this subtitle, the reversionary interest of the ground lease holder under the ground lease is extinguished and ground rent is no longer payable to the ground lease holder.
(b) Certificate.- If a ground lease is extinguished under this section, on application of a leasehold tenant, the Department shall issue to the leasehold tenant a ground lease extinguishment certificate.
(c) Effect of extinguishment.- The extinguishment of the ground lease is effective to conclusively vest a fee simple title in the leasehold tenant, free and clear of any and all right, title, or interest of the ground lease holder, any lien of a creditor of the ground lease holder, and any person claiming by, through, or under the ground lease holder when the leasehold tenant records the certificate in the land records of the county in which the property is located.
(d) Calculation of income.- To the extent that the extinguishment of a ground lease under this section creates income for the leasehold tenant, that income may not be considered in the calculation of income for the purposes of determining eligibility for any State or local program.
(e) Removal of legal disability of ground lease holder.- If the legal disability of a ground lease holder is removed after a ground lease is extinguished under this section:
(1) If the ground lease extinguishment certificate has been recorded, the ground lease holder:
(i) Is entitled to receive from the former leasehold tenant the redemption value of the ground lease; and
(ii) Has no claim on the property that had been subject to the ground lease; and
(2) If the ground lease extinguishment certificate has not been recorded, the ground lease holder:
(i) May reinstate the ground lease by registering the ground lease with the Department within 2 years after the removal of the legal disability; and
(ii) Is not entitled to ground rent for the period of the legal disability.
(f) Rights of buyer when certificate is not recorded.- If a ground lease is extinguished under this section and a ground lease extinguishment certificate has not been recorded, a buyer of the property for which the ground lease has been extinguished:
(1) May apply to the Department for a ground lease extinguishment certificate and file the certificate in the land records of the county in which the property is located; and
(2) Once the ground lease extinguishment certificate has been filed, may not be required to pay any security or any amount into an escrow account for the extinguished ground lease.
[2007, ch. 290.]