ROBERT L. EHRLICH, JR., Governor                            S.B. 372

House Bill 723, which was passed by the General Assembly and signed by me on May
11, 2004, accomplishes the same purpose. Therefore, it is not necessary for me to sign
Senate Bill 372.

Very truly yours,
Robert L. Ehrlich, Jr.
Governor

Senate Bill No. 372

AN ACT concerning

Real Property - Residential Leases - Interest on Security Deposits - Interest

Rates

FOR the purpose of altering the annual interest rate of interest paid on a security
deposit that a landlord is required to pay to a tenant within a certain amount of
time after the end of a tenancy by requiring the landlord to pay to the tenant
simple interest that has accrued in the amount of the Federal Reserve Discount
Rate as of a certain date; making a stylistic change under a residential lease
within a certain number of days after the end of a tenancy; altering the annual
interest rate paid on a security deposit under a residential lease prior to the
termination of a tenancy under certain circumstances; and generally relating to
interest rates paid on security deposits on under residential leases.

BY repealing and reenacting, with amendments,
Article - Real Property
Section 8-203(e) and (h)
Annotated Code of Maryland
(2003 Replacement Volume and 2003 Supplement)

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

Article - Real Property

8-203.

(e) (1) Within 45 days after the end of the tenancy, the landlord shall return
the security deposit to the tenant together with simple interest which has accrued in
the amount of [4 3 percent per annum] THE FEDERAL RESERVE DISCOUNT RATE AS
OF JANUARY 1 OF EACH YEAR OF THE TENANCY, less any damages rightfully
withheld.

(2)     Interest shall accrue at [six-month] 6 MONTH intervals from the
day the tenant gives the landlord the security deposit. Interest is not compounded.

(3)     Interest shall be payable only on security deposits of $50 or more.

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