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Right to Purchase
Before selling a single-family rental home in Baltimore City, the owner must first offer the current tenant a chance to purchase the property. The offer must include a fair price and reasonable terms. The law does not require property owners to accept unreasonable terms, such as a price below market value.
Tenants cannot transfer their purchase rights. Tenants also cannot waive their rights unless compensated fairly.
Read the Law: Baltimore City Code, Article 13 § 6-1, § 6-7, § 6-10, § 6-15.
Exceptions
The following property transfers are permitted without first offering the tenant an opportunity to purchase:
- transfer to a spouse, child, parents, siblings, or in-laws of the landlord;
- transfer by will or under inheritance laws;
- a gift to any religious, charitable, or benevolent, tax-exempt recipient;
- transfer of title in a mortgage or deed of trust;
- transfer to a government agency;
- certain transfers related to creating a ground rent interest;;
- transfer in lieu of foreclosure of a mortgage or deed of trust;
- sale at public auction (Note, the public auction is allowed if the landlord has offered the property to the tenant and the tenant did not accept the offer before the auction sale);
- any transfer by a personal representative from a decedent's estate made during the administration of the estate; [and]
- transfer by a bona fide gift to a relative or ancestor of the landlord or the landlord’s spouse,
- Relatives and ancestors are defined in § 267(c)(4) of the Internal Revenue Code. Lineal descendants include all biological children and stepchildren, and legally adopted children.
- transfer by the housing authority of Baltimore City.
Read the Law: Baltimore City Code, Article 13 § 6-3.
Offer of Sale
The landlord must provide the tenant with a written offer of sale that includes the asking price and the material terms of sale. The offer must also indicate that, if requested by the tenant, the landlord will provide:
- a copy of any third-party contact to purchase the property; and
- copies of licensing inspection reports of the property for the previous 2 years.
Copies of any third-party contracts and inspection reports must be provided to the tenant within 7 days of the tenant’s request. The landlord must also include a fact sheet that outlines the tenant’s rights with the offer.
Changes to Offer of Sale
If a significant change occurs after an offer of sale is provided to the tenant, the landlord must issue a revised offer to the tenant. Significant changes can include:
- a change in the purchaser under a third-party contact;
- a reduction in the sales price of 10% or more; or,
- another third-party contract to purchase the property with terms differing from the original offer of sale.
NOTE: If sale of the property has not occurred within six months of the original offer of sale, the landlord must issue a new offer of sale to the tenant.
Read the Law: Baltimore City Code, Article 13 § 6-8, § 6-9.
Tenant's Response
Once a tenant has received an offer of sale, the tenant has 14 days to send a written statement interest to the landlord. If the tenant accepts the offer of sale, they have 14 days from the date of submission of the statement of interest to submit a written contract to the landlord. The contract must include substantially the same terms and conditions set forth in any third-party contract of sale, including any contract term that provides for a reasonable real estate commission.
NOTE: If a tenant receives a revised offer of sale after the 14-day time frame to send a statement of interest, the tenant is allowed 7 days to send a written statement interest based on the revised offer of sale.
The landlord must allow at least 30 days for the tenant to secure financing. If the tenant is obtaining financing through a government or loan program for low- or moderate-income or first-time homebuyers and the lender provides a written estimate that a financing decision will be made within 60 calendar days, the landlord should extend the time frame for the tenant to secure financing.
Landlords cannot reject a sale solely due to a tenant's use of government financing assistance.
Read the Law: Baltimore City Code, Article 13 § 6-8, § 6-9, § 6-14.
Landlord’s Duty to Report
When a landlord provides an offer of sale to the tenant, they must also provide a copy of the offer to the Commissioner of the Department of Housing and Community Development.
If a property is sold to a party other than the tenant, the landlord must file affidavits proving they complied with the law by offering the tenant an opportunity to purchase the property. Affidavits must be filed with the land records office of Baltimore City and the Commissioner of the Baltimore City Department of Housing and Community Development.
A landlord must report transfer of a rental single-family property subject to this law to the Commissioner of the Baltimore City Department of Housing and Community Development within 30 days.
Read the Law: Baltimore City Code, Article 13 § 6-16, § 6-17.
Penalties
If a landlord violates any provision of this law, the landlord is guilty of a misdemeanor and may be fined up to $1,000 per offense.
Read the Law: Baltimore City Code, Article 13 § 6-20.