WILLIAM DONALD SCHAEFER, Governor Ch. 633

CHAPTER 633

(House Bill 75)

AN ACT concerning

Real Property Taxes -
Expense Account Arrangements - Late Payment

FOR the purpose of requiring a lender who fails to timely pay the
property taxes under a certain mortgage or deed of trust to
pay certain taxes, interest, and penalty instead of giving a
certain credit; and generally relating to the payment of
property taxes, interest, and penalty under certain
circumstances.

BY repealing and reenacting, with amendments,

Article - Real Property

Section 7-107

Annotated Code of Maryland

(1981 Replacement Volume and 1987 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Real Property

7-107.

(A)  In the case of a mortgage or a deed of trust in which
the lender assumes responsibility to the borrower to pay the
property taxes on the mortgaged property by the collection of
taxes through an expense account arrangement, the lender shall
pay the taxes within 45 days after (1) the first due date, (2)
receipt of the tax bill by the lender, or (3) the funds collected
by the lender are sufficient to pay the amount of taxes and
interest due, whichever occurs last.

(B)  If a lender has sufficient funds available to pay the
taxes, HAS RECEIVED A COPY OF THE TAX BILL, and fails to pay at
the time as provided in this section, [he shall give the borrower
a credit for] THE LENDER SHALL PAY the difference between the
amount of taxes, interest, and penalty due if paid at the time as
provided and the amount of taxes, interest, and penalty [actually
paid] DUE AT THE TIME THAT THE TAXES, INTEREST, AND PENALTY ARE
ACTUALLY PAID BY THE LENDER.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall
take effect July 1, 1988.

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