STATE of Maryland v. Stanley GOLDBERG, et al.
No. 8, Sept. Term, 2013.
Court of Appeals of Maryland.
Feb. 26, 2014.
85 A.3d 231
Berry acted dishonestly over a seven year period repeatedly, in twelve separate filings. He took Estate money for which he had no authorization from the Orphans’ Court and concealed disbursements to himself. Accordingly, we disbarred Steven Gene Berry.
Edward J. Meehan (Groom Law Group of Washington, DC; Richard L. Brusca, Skadden Arps, Slate, Meagher & Flom LLP, Washington, DC; Sara H. Arthur, Arthur Law Group, LLC, Annapolis, MD), on brief, for appellees.
Charles Muskin as Amicus Curiae, on brief, for appellees.
Charles Muskin, Annapolis, MD, for Amicus Curiae brief of Charles Muskin, Trustee.
Argued before BARBERA, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, WATTS, DALE R. CATHELL (Retired, Specially assigned), JJ.
HARRELL, J.
In this case, a re-match of sorts1 between the General Assembly and certain Baltimore landlords, we revisit the
I. Facts and Legal Background
The ground lease is a centuries-old home financing tool found almost exclusively in Maryland. See Banks v. Haskie, 45 Md. 207, 218 (1876). With roots in feudal England, the ground lease, although little known elsewhere in the United States, is common in Maryland. See Lewis Mayer, Ground Rents in Maryland 43 (Cushings & Bailey ed., 1883). Although ground leases have changed little over the centuries, recent legislation attempted “reforms” of the ground lease system. In late 2006, The Baltimore Sun published a three-part investigation into the ground rent system. Fred Schulte & June Arney, Part 1 of 3: On Shaky Ground, The Baltimore Sun, Dec. 10, 2006, http://www.baltimoresun.com/business/bal-
As noted earlier, the legislation at issue here is Chapter 286 of the 2007 Session Laws of Maryland, which revised
Appellees, 49 individual plaintiffs (“the Class“), filed suit against the State on 1 November 2007 in the Circuit Court for Anne Arundel County.8 In their suit, the Class claimed that by replacing ejectment with the lien-and-foreclosure procedure, the State abrogated unconstitutionally a vested property right. In addition to seeking declaratory relief, the Class sought $114 million in damages they claim were caused by the State‘s enactment of Chapter 286. Both sides moved for summary judgment. After we issued our opinion in Muskin v. State Dep‘t of Assessments & Taxation, 422 Md. 544, 30 A.3d 962 (2011), the Circuit Court heard the cross-motions for summary judgment, granted the Class’ motion for partial summary judgment on their constitutional and damages claims, and dismissed the remaining claims as moot. On 11 April 2012, the court entered the judgment as final.
The Circuit Court began its analysis with the Maryland Constitution‘s prohibition against the Legislature enacting any law “authorizing private property, to be taken for public use, without just compensation, as agreed upon between the parties, or awarded by a Jury, being first paid or tendered to the party entitled to such compensation.”
We granted certiorari to consider the following question:
Is legislation substituting one remedy for failure of a ground lease tenant to pay rent (lien and foreclosure) for another (ejectment) a permissible alteration of remedies that does not impermissibly abrogate vested rights of ground lease owners?
We shall affirm the Circuit Court‘s judgment.
II. Discussion
Because the Circuit Court‘s grant of partial summary judgment rested purely on questions of law in this case, we review the judgment without deference to the trial court. Conaway v. Deane, 401 Md. 219, 243, 932 A.2d 571, 584 (2007) (citing Livesay v. Baltimore, 384 Md. 1, 9, 862 A.2d 33, 38 (2004)).
The State argues that Chapter 286 replaced merely one remedy (“re-entry through ejectment“) with another (lien-and-foreclosure). It relies therefore on our longstanding rule that legislation altering remedies does not offend the Maryland Constitution and concludes that this law is constitutional. The State avers that, because Chapter 286 does not inhibit a ground lease holder‘s ability to collect rents or abridge the lease owner‘s reversionary interest in the property, it neither impairs the underlying contract nor abrogates a vested right. In the State‘s view, the Circuit Court misinterpreted Muskin as foreclosing the possibility of legislative alteration of remedies concerning ground leases at all. Rather, it says Muskin was decided as it was because Chapter 290 represented a complete extinguishment of existing ground leases and cut off all remedies available to a ground lease holder. Under the State‘s theory, because Chapter 286 does not cut off all remedies and does not extinguish ground leases, it should be held valid.
The Class counters that because Muskin holds explicitly that the right to re-enter in the event of default is a vested
The Class does not contest the ability of the Legislature to alter remedies. Rather, the Class contends, by cutting off the right of re-entry, the Legislature impaired a critical and vested right of the ground lease holder. In its view, because the statute‘s system of lien-and-foreclosure can never provide ground lease holders with possession of the property for which they hold legal title, it abrogates their vested property rights.
A. History of Ground Rents in Maryland
Leases for ground rents have been present in Maryland since Colonial times. Banks, 45 Md. at 218. Like any lease, they are intended to benefit mutually the lessor and lessee. Id. at 217. The lessee enters into the agreement to “acquire a perpetual interest in the leased premises, which would justify his making permanent improvements thereon, and enable him to avail himself of the value of the property thus enhanced....” Id. The lessor enters into the agreement, among other reasons, “to secure the prompt payment in perpetuity of the interest on a sum of money, equivalent to the value of the property....” Id. Ground leases have also been traded commodities since at least the Nineteenth Century. Id. People seeking safe investments would purchase them from ground lease holders as an income stream. Id. Additionally, because
The language of ground rent leases has changed little since 1750. Frank A. Kaufman, The Maryland Ground Rent—Mysterious but Beneficial, 5 Md. L.Rev. 1, 15 (1940). In a ground lease, “the lessor grants to the lessee, his executors, administrators, and assigns a specifically described lot along with the improvements on that lot and all rights and appurtenances connected with it for a term of ninety-nine years.” Id. “The lessee covenants in return for himself, his executors, administrators, and assigns to pay a specified yearly rental during the running of the lease in equal semi-annual installments and also agrees to pay all the taxes and assessments on the leased property.” Id. The lessee and his assigns are given the valuable option to renew the lease at any point during the ninety-nine year term. Id. at 16.
Ground leases are either redeemable or irredeemable. A redeemable ground lease grants the tenant the absolute right to tender an amount of cash to the ground lease holder that extinguishes the ground lease and vests a fee simple absolute in the tenant. Mayer, supra, at 120.
The lease specifies typically what action the lessor may pursue in court if the lessee is late paying rent. Traditionally this relief included: (1) to make distress on the arrearage; (2) after 60 days of nonpayment, to take over the premises by re-entry and hold them until the arrearage is paid up; and (3) after six months of nonpayment, re-enter the premises and possess them as if the lease had never been made. See Kaufman, supra, at 15-16; see also Mayer, supra, at 51-53. The right of re-entry is inserted into the ground lease principally as security for the payment of rents. Before the Legislature passed Chapter 286,
Whenever, in a case that involves a 99-year ground lease renewable forever, at least 6 months ground rent is in arrears and the landlord has the lawful right to reenter for the nonpayment of the rent, the landlord, no less than 30 days after sending to the tenant by certified mail, return receipt requested, at the tenant‘s last known address a bill for the ground rent due, may bring an action for possession of the property under
§ 14-108.1 of this article [.]
discharged from the lease and the rights of all persons claiming under the lease are foreclosed unless, within 6 calendar months after execution of the judgment for possession, the tenant or any other person claiming under the lease: (i) Pays the ground rent, arrears, and all costs awarded against that person; and (ii) Commences a proceeding to obtain relief from the judgment.
Under the challenged 2007 law (Chapter 286), the ejectment provision set forth immediately above “does not apply to residential property that is ... used ... for four or fewer dwelling units.” So, in 2007 these residential ground lease holders lost the right to re-enter on default and obtain discharge of tenants’ and mortgagees’ rights. Rather, under the new law set forth in
B. Arguments by the Class
To reiterate, the Class makes three arguments for the invalidity of Chapter 286. These arguments are: (1) Muskin made the right to re-enter in the event of default a vested property right; (2) the right of re-entry in the event of default is a right distinct from the remedy of ejectment; and (3) Chapter 286 transfers ground lease holders’ property without just compensation.
C. Muskin Governs the Outcome
Put simply, the hash of the present case was settled effectively by the Court‘s opinion in Muskin v. State Dep‘t of Assessments & Taxation, 422 Md. 544, 30 A.3d 962 (2011). “Together, Maryland‘s Declaration of Rights and Constitution prohibit the retrospective reach of statutes that would have the effect of abrogating vested rights.” Id. at 555, 30 A.3d at 968 (citing Dua, 370 Md. at 630 n. 9, 805 A.2d at 1076 n. 9). “It is only in times of revolution that, by a stroke of the pen, vested rights founded upon contract have been annihilated.” Mayer, supra, at 128.
In Muskin, we reiterated the well-settled principle that “Article 24 of the Maryland Declaration of Rights, guaranteeing due process of law, and
Thus, as we did in Muskin, “[t]o determine whether [the challenged statute (Chapter 286 in this case)] is constitutional under Maryland law, we evaluate whether the statute purports to apply retrospectively and abrogates a vested right or takes property without just compensation.” Id. at 557, 30 A.3d at 969. “If a retrospectively-applied statute is found to abrogate vested rights or takes property without just compensation, it is irrelevant whether the reason for enacting the statute, its goals, or its regulatory scheme is ‘rational.‘” Id. (citing Dua, 370 Md. at 623, 805 A.2d at 1072). “[T]he relevant standard for determining whether a retrospective statute is constitutional is ‘whether the vested rights are impaired and not whether the statute has a rational basis.‘” Id. (quoting Dua, 370 Md. at 623, 805 A.2d at 1072).
i. Chapter 286 Operates Retrospectively.
As we stated in Muskin, “[r]etrospective statutes are those ‘acts which operate on transactions which have occurred or rights and obligations which existed before passage of the act.‘” Muskin, 422 Md. at 557, 30 A.3d at 969
Applying the Landgraf model to the present case, as we did in Muskin, fair notice is not satisfied by the provisions of Chapter 286. Chapter 286 was passed on 2 April 2007, and made effective three months later on 1 July 2007. Thus, if a tenant defaulted prior to the enactment of Chapter 286, but the ground lease owner had not acted upon his/her/its accrued right to re-enter (i.e. had not begun yet the process for ejectment), the ground lease holder‘s present right to seek a judicial remedy is eliminated by Chapter 286 in but three months.
Moreover, Chapter 286 impacts severely the reasonable reliance and settled expectations of ground rent owners by virtue of its extinguishment of the right of reentry and destruction of the reversionary interest. As this Court stated in Muskin, the settled expectations of ground rent owners does not lie solely in future rents, but rather “[g]round rent owners rely reasonably on the future income from ground rents or the
As established further in Muskin, “[g]round rent leases, established through transactions consummated many years ago, create rights and obligations for ground rent owners and leaseholders.” Muskin, 422 Md. at 559, 30 A.3d at 970. One of these rights for the ground rent owners is the right to re-entry in the event of default, which Chapter 286 extinguishes for all intents and purposes. Thus, Chapter 286 acts retrospectively to impair a strand of the ground lease holder‘s bundle of rights, namely its right to reentry in the event of default. The remaining question is whether this right is a vested one.
ii. The Inseparable Bundle of Vested Rights in Maryland Ground Rent Leases.
To determine whether a right is vested, we analyze the nature of the right implicated by the challenged statute. We explained the proper framework for this analysis regarding the ground leaseholder‘s rights in a ground rent lease most recently in Muskin. When analyzing the implicated rights under the proper framework for ground rent leases (i.e., the bundle of vested rights that is the essence of these leases), the ground leaseholder‘s right of reentry must be
(a) The Proper Framework for the Analysis of Vested Rights in Ground Rents in this State (As Settled in Muskin).
A ground rent lease in this State is defined as “a renewable 99 year lease where the fee simple owner of a property receives an annual or semi-annual payment (‘ground rent‘) and retains the right to re-enter the property and terminate the lease if the leaseholder fails to pay.” Muskin, 422 Md. at 550, 30 A.3d at 965 (emphasis added) (citing Kolker v. Biggs, 203 Md. 137, 141, 99 A.2d 743, 745 (1953)). In Muskin, we provided, in clear and definite terms, the proper framework for vested rights analysis of the rights in these transactions. There, this Court stated that “[a] ground rent lease creates a bundle of vested rights for the ground rent owner, a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew.” Id. at 559, 30 A.3d at 971 (emphasis added). The Muskin Court explained specifically that “[t]hese two rights cannot be separated one from the other; together they are the essence of this unique property interest, and as such, vested rights analysis must consider them together.” Id. (emphasis added).
Because the right to re-enter the property in the event of default is included in this bundle (as part of the lessor‘s reversionary interest), this clear language directs how this Court should analyze the present case. Although Muskin determined that a failure to meet Chapter 290‘s registration requirement could result in abrogation of the vested right to receive ground rents and the reversion at the expiration of the lease, the framework established in Muskin, i.e., that the bundle of the ground lease holder‘s rights are inseparable for
The facts of the present case do not excuse obeisance to the underlying purpose of the ground rent nor the proper analytical framework for vested rights in a ground rent lease situation. The underlying purpose of the ground rent, from the viewpoint of the ground rent leaseholder, never has been limited exclusively to securing the payment, in perpetuity, of rent. The origins of the ground lease system in this State stemmed from the idea that “[t]here was thus a speculation in these peculiar leases, which, no doubt, added zest to the bargain on both sides.”15 Mayer, supra, at 45. The main objects of the lessor in making a ground lease are “[1] the inducement thereby offered to improvement, and [2] the security and receipt of a clear annual rent and the fine for renewal .... [3] based upon the full recognition of the reversionary estate in the lessor and those who may claim under him....” Id. at 87. Maryland lawyers at that time considered “[t]he common law lease, in which the reversion remained in the landowner and his tenure of the proprietary was not interfered with ... as the form best adapted to accomplish their purpose.” Id. at 46-47 (emphasis added). “In fact, it is a question whether the landed proprietors could have secured their object in any other way.” Id. at 47.
Accordingly, considering a ground lease, we review the estate of the lessor as a unitary object because of the strength of the interconnection between the rents and the reversionary interests (the reversion and the right to re-entry). To sever the bundle of the lessor‘s rights into pieces ignores the very nature of the ground lease system in this State.
The special interest at the heart of this case is the right to re-enter and take possession in the event of default (which is one of the two rights bundled as the lessor‘s reversionary interest in the Maryland ground rent). The State contends, however, that no right is lost because ejectment and re-entry are merely remedies to enforce rent payments and the landlord‘s reversionary interest remains intact in the replacement of these remedies with the foreclosure-and-lien remedy in Chapter 286. We disagree with much of the State‘s arguments regarding the nature of the implicated right in the context of the ground lease system in this State. Particularly, we disagree with labeling the right of reentry as a remedy that the Legislature may switch-out in a ground lease, and with the State‘s conclusion that the right is not vested, despite being part of the bundle of rights essential to the nature of these leases.
Understanding the nature of a “right of entry” can be confusing; thus, we pause to review the nature of this strand of the helix that is the bundle of rights. See 1 John A. Borron, Simes & Smith, The Law of Future Interests 267 n. 1 (Borron ed., 3d ed. 2002) (“Confusion of terminology is rampant in this area of the law [concerning the “right of entry subject to condition broken” and the “possibility of reverter“] and great care must be exercised in dealing with judicial utterances in which distinctions are obliterated by careless use of words.“). Although some treatises may use “possibility of reverter” as a synonym for a “right of entry,” the appellate courts in this State have taken care to distinguish these rights due to the differing legal distinctions and consequences flowing from their effects. See, e.g., Arthur E. Selnick Assocs., Inc. v. Howard Cnty. Md., 206 Md.App. 667, 695-96, 51 A.3d 76, 93 (2012), cert. denied, 429 Md. 529, 56 A.3d 1241 (2012).
The significance of the distinction is in the legal consequences of the rights.
[T]he right of entry is frequently called a “possibility of reverter” even by courts which discriminate carefully be
tween the legal consequences of the true possibility of a reverter (an interest which automatically revests in possession) and the right of entry (which becomes possessory only after an election). Of course, confusion is inevitable when a court refuses to recognize any distinction between the two.
Borron, supra, at 267 n. 1 (citation omitted). See also The Knights & Ladies of Samaria v. Bd. of Educ. of Charles Cnty., 113 Md.App. 656, 665 n. 4, 688 A.2d 933, 937 n. 4 (1997) (labeling this distinction between possibilities of reverter and rights of entry as “sharp” and “crucial“). Borron explained further:
Strictly speaking, under the Hohfeldian terminology,17 the interest here considered would constitute a “power” and not
Borron, supra, at 267 n. 1. See also 16 A.L.R.2d 1246 (Originally published in 1951) (“This right of re-entry is not a reversion, a possibility of reversion, or an estate in land, but is a mere right or chose in action—a right or power to terminate the estate of the grantee and retake the same if there is a breach of condition—and if it is enforced, the grantor would be in by the failure of the condition and not by a reverter.“) (citing 33 Am Jur, Life Estates, Remainders, and Reversions, §§ 204, 205, 207, 208). Because of the important distinction in the legal consequences of these rights, we use the term “right of re-entry” here.
We conclude that the foreclosure-and-lien remedy of Chapter 286 does not provide the same safeguards for leaseholders as the prior ejectment remedy did. Under ejectment, the remedy for the right of re-entry in ground rent leases prior to 2007, the right of present possession is returned to the ground leaseholder, terminating the ground lease such that the holder owned the property in fee simple (and not subject to any lease), and provided the ground leaseholder (now owner in fee simple) the ability also to recover rents due prior to the termination of the lease. Under Chapter 286‘s foreclosure-and-lien remedy, the ground leaseholder is not able to seek any judicial remedy to terminate the lease such that he could regain the right to present possession of the property.
As long, however, as right of entry remained a technical term of the land law, what gave it vitality was that it was something more than its name implied. Just as recovery in ejectment meant little unless the recoveror had some right
Due to the unique nature of the property rights invested in ground rent leases,20 where the ground leaseholder‘s rights
JUDGMENT OF THE CIRCUIT COURT FOR ANNE ARUNDEL COUNTY AFFIRMED; COSTS TO BE PAID BY THE STATE OF MARYLAND.
ADKINS and WATTS, JJ., dissent.
ADKINS, J., dissenting.
I respectfully dissent because in my view the Majority erroneously confers vested status on a contingent right, leading it to grant heightened protection to the right of reentry in the event of default. By deeming that a right can be
I do not disagree with the Majority‘s reminder that the Legislature may not retroactively abrogate vested rights. I dissent, nonetheless, because the right of reentry is an inchoate cause of action subject to a condition precedent. Namely, it is subject to the condition precedent of “in the event of default.” No doubt the right of reentry may vest, but that does not, absent the condition precedent occurring, make it vested. Because it is not a vested right, the right of reentry in the event of default should not receive the heightened protections that we grant to vested rights. Yet in its use of Muskin‘s “bundle” language, the Majority announces that in Maryland there are three certainties: death, taxes, and ground lease tenants defaulting on their payments. The Majority does not explain why the Maryland ground lease, which differs from a traditional lease only in ways irrelevant to the right of reentry in the event of default,1 exists on a
Before further analyzing the difference between something being vested and something being contingent, I want to explain the limits of our holding in Muskin. In Muskin, we held the extinguishment and transfer provisions of Chapter 290 of the 2007 Session Laws of Maryland (“Chapter 290“) invalid under the Maryland Declaration of Rights and Constitution. Muskin, 422 Md. 544, 30 A.3d 962. We relied on Dua, which pronounced it “firmly settled by this Court‘s opinions that the Constitution of Maryland prohibits legislation which retroactively abrogates vested rights. No matter how ‘rational’ under particular circumstances, the State is constitutionally precluded from abolishing a vested property right or taking one person‘s property and giving it to someone else.” Dua, 370 Md. at 623, 805 A.2d at 1072. Thus, what is a “vested property right” was our primary question in Muskin, as well as in today‘s case.
In reaching our holding in Muskin, we examined fully the prohibition against taking away vested rights. 422 Md. at 559-560, 30 A.3d at 971. Prior to Chapter 290, there was no central registry for ground rents in Maryland. Muskin, 422 Md. at 551, 30 A.3d at 966. In Muskin we were asked to review legislation that would create such a registry. Id. Chapter 290 mandated that all ground rent holders submit a form and registration fee to a centralized registry of ground rents by September 30, 2010. See
In holding the extinguishment and transfer provisions of Chapter 290 invalid under the Maryland Declaration of Rights and Constitution, we explained:
A ground rent lease creates a bundle of vested rights for the ground rent owner, a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew. These two rights cannot be separated one from the other; together they are the essence of this unique property interest, and as such, vested rights analysis must consider them together.
Muskin, 422 Md. at 559-60, 30 A.3d at 971 (footnote omitted). The Majority interprets this reasoning as a pronouncement that the right of reentry in the event of a default, by itself, is a vested right. Yet, what we dealt with in Muskin differs dramatically from the legislation here, and our explanation in Muskin must be seen in its proper perspective. There, the challenged legislation abrogated a vested right—it involved a complete forfeiture of the historical ground rent holder‘s interest, merely from a failure to comply timely with a brand new registration requirement.
The retroactive abrogation of a vested right required that we look at all the rights the ground rent holder possessed, and examine them in light of the constitutional standard. See Muskin, 422 Md. at 559-60, 30 A.3d at 971. We categorized the rights in the bundle as follows: (1) the property right to a reversion of ownership at the expiration of the lease; (2) the contractual right to receive ground rent payments; and (3) the right to pursue the remedy of reentry in the event of a
At its core, the ground rent creates two inseparable rights: (1) the right to create an obligation tied to the land, and (2) the right to retain an interest in the land to allow for the enforcement of that obligation. Thus, any change in how one of these rights is treated must be analyzed in the context of the property interest as a whole. Under this framework, Chapter 290 was invalid because it abrogated a vested right and destroyed the underlying purpose of the conveyance, which, from the landlord‘s view, was to secure the payment, in perpetuity, of interest on a sum of money. See Banks v. Haskie, 45 Md. 207, 217 (1876). If the ground rent was not registered, even inadvertently, the ground lease holder lost all of its rights. Thus, we held Chapter 290 unconstitutional because it abrogated a vested right.
The Right Of Reentry In The Event Of Default Is Not A Vested Right
In Muskin, we did not address the significant difference between the role of the reversion at the end of the lease, and the contingent right of reentry in the event of default because Muskin was a case about the Legislature‘s complete vitiation of the vested end-of-lease term reversion interest upon a failure to register. We had no need to analyze the role of the right of reentry in the event of default with any specificity. Indeed, as we explained, “[e]ven if [the rights in the ground lease] were analyzed separately, to determine one right is vested is to find Chapter 290‘s extinguishment scheme flawed fatally.” Muskin, 422 Md. at 560 n. 9, 30 A.3d at 971 n. 9. This is reflected in our explanation of the abrogated vested rights, wherein we recognized that “[t]here can be no reason
Conversely, because the case before us implicates the distinction between the reversion and the possibility of reverter, it is necessary to address this distinction. The distinction between the end-of-lease reversion, which Chapter 290 impermissibly abrogated, and the right of reentry in the event of default, which is also referred to as a possibility of reverter,2 explains why the Legislature is prohibited from abrogating one, but may alter the other. This distinction is best explained as follows:
Despite its purely historical origin, the distinction between the reversion and the possibility of reverter is still significant. The latter is generally a less substantial interest (because whether it ever becomes possessory depends upon some contingency) and is therefore accorded less protection.
* * *
The right of entry which may thus co-exist with a reversion is distinguished from the reversion in that the right of entry involves a power in the owner thereof to terminate the possessory estate or not as he wishes, if the condition is broken. But, in the case of a reversion, a possessory interest revests automatically in the reversioner upon the happening of the event on which the particular estate is to terminate.
1 John A. Borron, Simes and Smith, The Law of Future Interests § 92 (Borron 3d ed. 2002) (footnotes omitted). Thus, in a ground lease, the reversion and the right of reentry in the event of default come from the same source and co-exist. Yet, they are legally distinct future interests and are not treated the same under canons of property law. The reversion, because it is possessory, is given strong legal protections from divestment—it is an estate in property. This protection formed the basis of our holding in Muskin. The possibility of reverter, because it is not a possessory interest prior to its condition precedent occurring, is not an estate in property.
In this case, the difference between the reversion, which Muskin protected, and the right of reentry in the event of default is the difference between a vested right and a contingent right. The Supreme Court has endorsed the following articulation of the difference between an interest in property being vested and being contingent:
“[R]ights are vested, in contradistinction to being expectant or contingent. They are vested when the right to enjoyment, present or prospective, has become the property of some particular person or persons, as a present interest. They are expectant when they depend upon the continued
existence of the present condition of things until the happening of some future event. They are contingent when they are only to come into existence on an event or condition which may not happen or be performed until some other event may prevent their vesting.”
Pearsall v. Great Northern Ry. Co., 161 U.S. 646, 673 (1896) (quoting Thomas M. Cooley, The General Principles of Constitutional Law in the United States of America 332 (2d ed. 1891)). Because a tenant‘s default is an uncertain event, the right of reentry in the event of default is a contingency. If a right or interest is subject to a contingency, it cannot be considered vested in any recognized sense of the word, whether it is “bundled” with other vested rights or not.3
In addition to the Supreme Court, the following states have recognized the distinction between vested rights and contingent rights: Florida, see Clausell v. Hobart Corp., 515 So.2d 1275, 1276 (Fla.1987) (“‘To be vested a right must be more than a mere expectation based on an anticipation of the continuance of an existing law; it must have become a title, legal or equitable, to the present or future enforcement of a demand.‘“) (quoting Div. of Workers’ Comp. v. Brevda, 420 So.2d 887, 891 (Fla. 1st DCA 1982)); Louisiana, see Tennant v. Russell, 214 La. 1046, 1052, 39 So.2d 726, 728 (La.1949) (“‘The right must be absolute, complete, and unconditional, independent of a contingency, and a mere expectancy of future benefit, or a contingent interest in property . . . does not
Here, the Majority relies on Muskin alone for the proposition that the right of reentry in the event of default is a vested right held by ground lease owners. In so doing, the Majority confers vested status on a right that simply, analytically, cannot be inherently vested. To say a right is vested means “(a) that there is no condition precedent to B‘s interest becoming a present estate other than the natural expiration of A‘s estate for life, and (b) that it is theoretically possible to identify who would get the right to possession if A‘s estate should end at any time.” Thomas F. Bergin and Paul G. Haskell, Preface to Estates in Land and Future Interests, 71 (1st ed. 1966) (italics in original). Prior to the condition precedent occurring, to speak of the right as vested is to conflate the possible with the necessary. Thus, the right should not receive the heightened protection we extended to vested rights in Dua and Muskin.
The Right Of Reentry Is A Remedy
I echo Judge Watts’ view that the right of reentry is a remedy. The Legislature is allowed to alter the remedies available at law. Although vested rights may not be abrogated,
Chapter 286 grants ground lease holders a sufficient substitute method of enforcing a tenant‘s obligation to pay—the lien-and-foreclosure process set forth in
I disagree with interpreting the ability to retake possession in the event of default as if it were the purpose, or even a purpose, of the ground lease. It is not. The ground rent system arose as a means of exchanging long-term home financing for an indefinite stream of payments. See Banks, 45 Md. at 218. Additionally, the right of reentry in the event of default was written into ground leases to secure payment, not to allow the landlord to retake present possession. See Wylie v. Kirby, 115 Md. 282, 287, 80 A. 962, 964 (1911) (“There is nothing in the lease or in the record at large to justify the inference that the condition of forfeiture was intended to serve any other purpose than that of a security for the payment of the rent at the times and in the installments prescribed[.]“); see also 1 Pomeroy‘s Equity Jurisprudence § 453 (4th ed. 1918) (“such condition and forfeiture are intended merely as a
Nothing in Chapter 286 changes the underlying nature of the ground lease agreement. The changes in remedy wrought by Chapter 286 do not detract from use of the ground rent as a vehicle to obtain long-term home financing and secure an income stream. Having the right to take possession and terminate the tenant‘s right at an earlier date was only a remedy to enforce the tenant‘s obligation, not an asset in its own right. Thus, that the landlord may not retake present possession under Chapter 286 does not render the substitution of remedies deficient.
The Majority rests its analysis on our holding in Muskin, and no other source, for the proposition that by sheer fiat a Court may confer vested status on a property right whose condition precedent has not yet occurred. I do not contest that once the tenant does default on his or her payments, then the right of reentry vests. The Legislature does not have the power to abrogate such vested rights. Yet here, the right the Legislature seeks to abrogate is not, by any recognized definition, a vested one. The Legislature is allowed to alter the remedies available at law, and here the new remedy does not deprive the ground lease holder from being made whole in the event of a tenant default, in the manner contemplated by the lease. This makes Chapter 286 a permissible substitution of remedies. Thus the heightened protections contemplated in Dua and reiterated in Muskin do not apply to the right of reentry in the event of default. I would reverse the Circuit Court for Anne Arundel County. Thus, I most respectfully dissent.
WATTS, J., dissenting.
Respectfully, I dissent, and would reverse the circuit court‘s grant of appellees’ motion for summary judgment.
In a matter of first impression, this Court is called upon to directly address the issue of ejectment as a remedy for non
As early as 1953, in Kolker v. Biggs, 203 Md. 137, 141, 99 A.2d 743, 745 (1953), we discussed the history and complications of ground rent leases in Maryland, explaining:
Ground rent leases, which were rare in England but common in Ireland, were introduced in Maryland before the Revolution. Seldom used in other States,1 they have been a favorite form of tenure in Baltimore. In the ground rent
Long ago it was found that Maryland‘s unique system of ground rent leases had resulted in the complication of many legal titles.2 Very often the ground rents were small and were not collected for many years, and when the land was
(Citations omitted). See also Heritage Realty, Inc. v. Baltimore, 252 Md. 1, 3-6, 248 A.2d 898, 899-901 (1969) (discussing the development of ground rent law in Maryland).
Historically, ground lease owners in Maryland had three remedies for the nonpayment of ground rent: (1) distraint, see Heritage Realty, 252 Md. at 3, 248 A.2d at 900 (“Since the [ground] rent was categorized as a rent service, the remedy of distraint was available to the lessor.” (Citation omitted))3; (2) a civil action for a monetary judgment in the amount of the
In December 2006, The Baltimore Sun published a thorough three-part series of articles highlighting the abuses of the ejectment remedy as used against ground lease tenants. In the first article, The Baltimore Sun reported:
Baltimore‘s arcane system of ground rents, widely viewed as a harmless vestige of colonial law, is increasingly being used by some investors to seize homes or extract large fees from people who often are ignorant of the loosely regulated process, an investigation by The Sun has found.
Tens of thousands of Baltimore homeowners must pay rent twice a year on the land under their houses. If they fall behind on the payments, the ground rent holders can sue to seize the houses—and have done so nearly 4,000 times in the past six years, sometimes over back rent as little as $24, The Sun found.
Fred Schulte and June Arney, On shaky ground, THE BALTIMORE SUN, Dec. 10, 2006, available at http://www.baltimoresun.com/business/real-estate/bal-groundrent1-2102006,0,2042038.story (last visited January 30, 2014). The article stated that its investigation revealed the following:
Id.
No other private debt collectors in Maryland can obtain rewards so disproportionate to what they are owed. In contrast [to] a foreclosure, the holder of an overdue ground rent can seize a home, sell it[,] and keep every cent of the proceeds. To prevent seizure, homeowners almost always have to pay fees that dwarf the amount of rent they owe.
In response to the outrage generated by what was seen as abuses of the ejectment remedy by ground lease owners, as
FOR the purpose of applying provisions of law authorizing a landlord under a ground lease to bring an action for ejectment for nonpayment of ground rent to certain property; repealing provisions of law entitling the holder of a ground rent to reimbursement for certain expenses incurred in collecting past due ground rent and filing an action for ejectment; providing that the establishment of a lien is the remedy for nonpayment of a ground rent on certain residential property; requiring a certain person seeking to impose a lien to give a certain notice to certain persons in a certain manner; ... providing for the enforcement and foreclosure of a lien; ... providing that certain provisions of law authorizing a certain action for possession do not apply to certain actions for nonpayment of ground rent; ... and generally relating to remedies for nonpayment of ground rent.
As enacted,
- Notwithstanding any provision of a ground lease giving the ground lease holder the right to reenter, the establishment of a lien under this section is the remedy for nonpayment of a ground rent.
- This section does not affect the right of a ground lease holder to bring a civil action against the leasehold tenant
seeking a money judgment for the amount of the past due ground rent.4
The amendments to the ground rent statutes, including Chapter 286, did not change the ground lease owner‘s ability to bring a civil action against a tenant for a money judgment in the amount of the past due ground rent, see
Passage of the amendments to the ground rent statutes met with immediate challenges. In Muskin v. State Dep‘t of Assessments & Taxation, 422 Md. 544, 549-50, 30 A.3d 962, 965 (2011), we addressed a challenge to the constitutionality of one of the amendments—Chapter 290, the Ground Rent Registry Statute—which required the State Department of Assessments and Taxation (“SDAT“) to maintain an online registry of ground rent leases. Under Chapter 290, if a ground lease holder failed to register the property with SDAT by the statutory deadline, SDAT was authorized to issue an extinguishment certificate transferring the reversionary interest from the ground lease holder to the ground rent tenant.
To understand the issue currently before this Court, it is important to recognize what was not before the Court in
In Muskin, 422 Md. at 550, 30 A.3d at 965, with the Honorable Glenn T. Harrell, Jr. writing for this Court, we held that the extinguishment and transfer provisions of Chapter 290 were invalid because they violated “specific prohibitions on the retrospective application of statutes that lead to the abrogation of vested rights and the taking of property without just compensation[,]” but held that the registration requirement was valid. We explained Maryland‘s constitutional protections for vested rights, stating: “Together, Maryland‘s Declaration of Rights and Constitution prohibit the retrospective reach of statutes that would have the effect of abrogating vested rights.” Muskin, id. at 555, 30 A.3d at 968 (citation omitted). Quoting Dua v. Comcast Cable of Md. Inc., 370 Md. 604, 623, 805 A.2d 1061, 1072 (2002), we stated:
[I]t has been firmly settled by this Court‘s opinions that the Constitution of Maryland prohibits legislation which retroactively abrogates vested rights. No matter how “rational” under particular circumstances, the State is constitutionally precluded from abolishing a vested property right or taking of a person‘s property and giving it to someone else.
Muskin, 422 Md. at 556-57, 30 A.3d at 969.
In assessing the constitutionality of Chapter 290, we addressed “whether the statute [operated] retrospectively and abrogate[d] a vested right or [took] property without just compensation.” Id. at 557, 30 A.3d at 969. Applying the analysis of the Supreme Court of the United States in Landgraf v. USI Film Prods., 511 U.S. 244, 270, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994), we held that Chapter 290 was a retrospec-
As to whether Chapter 290 as a retrospective statute impermissibly abrogated vested rights, we stated:
A ground rent lease creates a bundle of vested rights for the ground rent owner, a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew. These two rights cannot be separated one from the other; together they are the essence of this unique property interest, and as such, vested rights analysis must consider them together. As pointed out by the SDAT, there is no Maryland case on point that has held that the rights created under a ground lease are vested rights. Courts have struggled with the difficulty of determining a precise definition of vested rights.
... There can be no reasonable doubt that the reversionary interest to real property and the contractual right to receive ground rent are vested rights under Maryland law. Heritage Realty, 252 Md. at 11, 248 A.2d at 904 (recognizing the importance of the reversionary interest, stating that “[t]he owner [of the reversionary interest] is entitled to receive fair market value on condemnation“).
Muskin, 422 Md. at 559-60, 30 A.3d at 971 (footnotes and one citation omitted) (alterations, omission, and some emphasis in original). Accordingly, we held “that the extinguishment and transfer provisions of Chapter 290 [were] unconstitutional” because the statute was retrospective and abrogated vested property rights. Id. at 560, 30 A.3d at 971.
Most significantly, however, in Muskin, id. at 561, 30 A.3d at 971, we held that an exception to the general prohibition against statutes that abrogate vested rights exists in circumstances where the statute “applies solely to remedies and rules of evidence.” We explained:
We have held consistently that the Legislature has the power to alter the rules of evidence and remedies, which in turn allows statutes of limitations and evidentiary statutes to affect vested property rights. Thistle v. Frostburg Coal Co., 10 Md. 129, 145 (1856) (holding that the Legislature has the power to alter and remodel the rules of evidence and remedies); Wilson v. Simon, 91 Md. 1, 6, 45 A. 1022, 1023 (1900) (holding that the Legislature may abrogate retrospectively a property or contract right if there are other remedies available); Allen v. Dovell, 193 Md. 359, 363-64, 66 A.2d 795, 797 (1949) (holding that the Legislature has the power to amend statutes of limitations so long as there is a reasonable time for enforcement of a cause of action); Langston [v. Riffe], 359 Md. [396,] 407, 754 A.2d [389,] 394 [(2000)] (holding valid statutes that altered only the procedures involved in enforcing rights or remedies available for enforcement); but see Prince George‘s Cnty. v. Longtin, 419 Md. 450, 19 A.3d 859 (2011), where the court refused to give retrospective application of a statutory damages “cap” to a previously accrued cause of action.
Muskin, 422 Md. at 561, 30 A.3d at 971-72. We distinguished the vested rights at issue in the case—the extinguishment and transfer of the ownership interest in a ground rent lease—from remedies and evidence rules, and stated that the exception does not apply where the statute eliminates all remedies or “divests a right through instrumentality of the remedy, and under the preten[s]e of regulating it[.]” Id. at 562-63, 30 A.3d at 972-73 (citations omitted) (first alteration in original). Indeed, we determined that Chapter 290 “purport[ed] to regulate vested rights, but in effect remove[d] all remedies and extinguishe[d] those rights completely.” Id. at 563, 30 A.3d at 973. As such, in Muskin, id. at 563, 30 A.3d at 973, we held that the extinguishment and transfer provisions of Chapter 290 impermissibly divested ground rent owners of their real property and contractual vested rights.
Turning to the issue before this Court in this case—the constitutionality of the substitution of lien and foreclosure proceedings for the remedy of ejectment as a consequence for
Nonetheless, I would hold that Chapter 286‘s status as a retrospective statute is of no consequence because Chapter 286 does not impermissibly abrogate ground lease owners’ vested rights.
To begin, it is undisputed that Muskin did not address the issue of ejectment as a remedy for nonpayment of ground rent. In Muskin, this Court simply was not confronted with the issue of whether the remedy or action of ejectment was a vested right held by ground lease owners or was indispensable to the right of re-entry. Instead, as discussed above, the sole question in Muskin was whether extinguishment of the entire ground lease and transfer of title to the ground lease tenant for the ground lease owner‘s failure to register by the statutory deadline was unconstitutional. At one point, however, in Muskin, in unexplained dicta, we discussed the reversionary interest to re-enter the property if the leaseholder failed to renew as synonymous with the ability to re-enter to eject the ground lease tenant in the event of a default, and lumped both together as being a “right” held by a ground lease owner. See 422 Md. at 559, 30 A.3d at 971 (“A ground rent lease creates a bundle of vested rights for the ground rent owner, a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew.” (Emphasis
There is no dispute that the reversionary interest in property—where the leaseholder fails to renew at the end of the lease—and re-entering the property in the event of default are distinct. The former is an interest held by the ground lease owner to be exercised automatically upon the termination of the ground lease rent by operation of law, i.e., no court involvement or notice is required. By contrast, re-entering the property in the event of default, via ejectment, is a statutory remedy for nonpayment of ground rent that permits a ground lease owner to bring an action for possession of the property after certain notice is provided to the ground lease tenant, and a ground lease owner obtains a judgment through the trial court to eject the ground lease tenant from the property. The Majority does not dispute that ejectment is a remedy, not part of the reversionary interest.5 See Majority
That said, I completely disagree with the Majority‘s characterization of the right of re-entry as “vested.” See Majority Op. at 216-17, 85 A.3d at 246-47. A thing does not become a vested right under the law simply because we label it as such. The Majority fails to cite any case law or to provide any support for the proposition that the right of re-entry is a vested right. Instead, as explained by the Honorable Sally D.
In sum, in Muskin, although we stated that a ground rent lease creates a “bundle of vested rights” for the ground rent owner—specifically, “a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew“—we never held that the right of re-entry is a vested right or that a specific remedy, such as ejectment, is a part of a bundle of vested rights. Muskin, 422 Md. at 559, 30 A.3d at 971. It is not dispositive that, in Muskin, we used the term “reversionary interest” upon the failure of a leaseholder to renew interchangeably with the term right to “re-enter upon default,” as the use of the terms was done without any analysis into the distinction that exists. Indeed, the dicta in Muskin, id. at 559, 30 A.3d at 971—that a ground rent lease creates “the reversionary interest to reenter the property in the event of a default or if the leaseholder fails to renew“—
The Majority concedes that the right of re-entry is not the same as the reversionary right—i.e., the Majority acknowledges that the right of re-entry upon default is distinct from the reversionary interest if the leaseholder fails to renew—see Majority Op. at 213, 85 A.3d at 244 (“This right of re-entry is not a reversion, a possibility of reverter, or an estate in land, but is a mere ... right or power to terminate the estate of the grantee and retake the same if there is a breach of condition[.]” (Quoting 16 A.L.R.2d 1246))—but nonetheless insists the right of re-entry is “vested.” This insistence is, however, of no significance. Even if Muskin could possibly be stretched to be interpreted as holding that the right of re-entry is a vested right, I would hold, nonetheless, that Chapter 286 does not impermissibly abrogate ground lease owners’ vested rights. Chapter 286, by substituting the remedy of ejectment with the remedy of lien and foreclosure, does not run afoul of the prohibition against statutes that abrogate vested rights. In Muskin, 422 Md. at 561, 30 A.3d at 971, we explicitly stated that an exception to the general prohibition against statutes that abrogate vested rights exists in circumstances where the statute “applies solely to remedies and rules of evidence.”
In identifying this exception, we examined a case relevant to the instant case—Wilson v. Simon, 91 Md. 1, 45 A. 1022 (1900). In Wilson, id. at 4, 45 A. at 1022, while a suit to enforce a mechanic‘s lien for materials was pending, the General Assembly repealed all sections of a particular article of the Code of Maryland that provided for liens for materials furnished for the construction of buildings, and enacted statutes providing only for liens for the payment of debts contracted for work. In considering whether the changes by the
This peculiar lien does not originate in contact. It is purely a creature of positive statutory enactment, to be maintained and enforced to the extent and in the mode which the statute prescribes[.] ... Nor is it an exact statement of the law that a party, as an incident of his agreement, has a right to all the remedies for the enforcement of the contract in force at the time it was entered into. A party has no right to a particular remedy.... [U]ndoubtedly a state may regulate at pleasure the modes of proceedings in its courts. And although the new remedy may be deemed less convenient than the old one, and may in some degree render the recovery of debts more tardy and difficult, yet it will not follow that the law is unconstitutional. Whatever belongs to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract.
Id. at 6-7, 45 A. at 1023 (internal quotation marks and citations omitted). In Wilson, id. at 7, 45 A. at 1023, we held that the General Assembly could abrogate retrospectively a property or contract right if there are other remedies available, and observed that Wilson‘s “right to bring his action, secure judgment and execution, and make sale of [the other]‘s property remained unimpaired.” As such, we held: “[T]he effect of the repealing statute was not to impair any of the obligations of [Wilson]‘s contract, though it took from him the lien theretofore given him; and that the right to a mechanic‘s lien for materials furnished under the law of this state is not a vested right, but an extraordinary remedy only, which the state may discontinue at pleasure.” Id. at 9, 45 A. at 1024.
Here, as in Wilson, it is clear that Chapter 286, far from eliminating all remedies available to ground lease owners, simply substitutes one remedy (ejectment)—of several available remedies—with another adequate remedy (lien and foreclosure). Chapter 286 does not divest ground lease owners’
The reasons the Majority provides in holding that the lien and foreclosure remedy does not provide the same safeguards for ground lease owners as ejectment are deficient. The Majority charges that, under lien and foreclosure, a “ground leaseholder is not able ... to terminate the lease such that he could regain the right to present possession of the property.” Majority Op. at 214, 85 A.3d at 245. To begin, the lien and foreclosure remedy was intended to curb abuses in the ejectment system—namely, ground lease owners obtaining title to the improvements on land, such as houses, for a small fraction of past due ground rent and with bare minimum notice. In Baltimore City, for example, it would be a rare piece of land subject to ground rent that did not have a house on it. As recognized by the General Assembly, permitting ejectment to continue as a remedy may result in a windfall for the lessor upon the lessee‘s default. Stated otherwise, the lien and foreclosure remedy provides safeguards to ground lease tenants—something that was lacking under the ejectment reme-
Next, the Majority claims that replacing the remedy of ejectment with the remedy of lien and foreclosure “changes the very essence of [ground lease] transactions in this State from a lease subject to rent into a conveyance subject to rent[.]” Majority Op. at 216, 85 A.3d at 246. As discussed above at footnote 1, the distinction between labeling ground rent as a lease subject to rent versus a conveyance subject to rent is of no significance, as, in either circumstance, land is conveyed by the grantor to the grantee—by lease for 99 years renewable “from time to time forever[,]” Kolker, 203 Md. at 141, 99 A.2d at 745, or by fee simple absolute—subject to the payment of ground rent. The lease period, by definition, is longer than the average person‘s lifetime, and, in the past, in some instances, it was “next to impossible to find [] information” to track down a ground rent owner. See supra Fred
For the above reasons, I would reverse the circuit court‘s grant of appellees’ motion for summary judgment. As the Honorable Sally D. Adkins stated in Muskin in dissent—that this Court should “not strike down the legislature‘s enactment of Chapter 290, which is a legitimate, rational law designed to regulate the ground lease system[,]” 422 Md. at 568, 30 A.3d at 976 (Adkins, J., dissenting) (footnote omitted)—I would state the same about Chapter 286, and would hold that Chapter 286 is constitutional and does not impermissibly abrogate ground lease owners’ vested rights.
85 A.3d 264
ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
James Albert FROST.
Misc. Docket AG No. 69, Sept. Term, 2012.
Court of Appeals of Maryland.
Feb. 26, 2014.
Notes
- Leased for business, commercial, manufacturing, mercantile, or industrial purposes, or any other purpose that is not primarily residential;
- Improved or to be improved by any apartment, condominium, cooperative, or other building for multifamily use of greater than four dwelling units; or
- Leased for dwellings or mobile homes that are erected or placed in a mobile home development or mobile home park.
(Omissions and alterations in original) (citations and internal quotation marks omitted). The Majority also cites The Knights & Ladies of Samaria v. Bd. of Educ. Of Charles Cnty., 113 Md.App. 656, 665 n. 4, 688 A.2d 933, 937 n. 4 (1997), in which the Court of Special Appeals emphasized the “sharp distinction” that exists between the possibility of reverter and the right of entry, explaining:In a fee simple determinable estate, where land is devised for a certain purpose, and it is the testator‘s intention that it shall be used for that purpose only, and that on the cessation of such use, the estate shall end without re-entry by the grantor, a possibility of reverter arises.... In a fee simple determinable estate, when the estate is determined, a fee simple absolute estate [is] reestablished in those entitled under the original grantors. It [is] not necessary ... to assert a claim to the fee simple absolute estate or to take any other positive action, as the grantors acquire[] a fee simple absolute estate by the realization of the possibility of reverter.
... In a fee simple subject to a condition subsequent estate, [t]he failure of a condition subsequent ... merely gives rise to a right of entry; the grantor does not obtain a fee simple absolute [estate] until he or she enters and retakes the land. Thus, in a fee simple determinable estate, the grantor‘s interest vests in fee simple absolute instantaneously with the failure of the limitation; however, in a fee simple subject to a condition subsequent estate, the grantor must affirmatively exercise his or her right of reentry after the failure of the condition subsequent to obtain title in fee simple absolute.
(Citations omitted). These cases support the very proposition at the heart of the matter—that the reversionary interest if the leaseholder fails to renew is distinct from re-entering the property upon default, via ejectment.[T]he failure of a special limitation, such as a possibility of reverter, results automatically in the reversion of an estate to the original grantor in fee simple absolute without the need for entry. The failure of a condition subsequent, however, merely gives rise to a right of entry; the grantor does not obtain a fee simple absolute until he or she enters and retakes the land.
(2) The reversion is redeemable:
(i) For a sum equal to the annual rent reserved multiplied by:
1. 25, which is capitalization at 4 percent, if the lease was executed from April 8, 1884 to April 5, 1888, both inclusive;
2. 8.33, which is capitalization at 12 percent, if the lease was or is created after July 1, 1982; or
3. 16.66, which is capitalization at 6 percent, if the lease was created at any other time;
(ii) For a lesser sum if specified in the lease; or
(iii) For a sum to which the parties may agree at the time of redemption.
Muskin, 422 Md. at 557 n. 8, 30 A.3d at 969 n. 8.[s]tatutes have been found unconstitutional under the Maryland Declaration of Rights and Constitution for violating due process, the takings clause, or both. We said in Dua v. Comcast Cable of Md., Inc., 370 Md. 604, 630, 805 A.2d 1061, 1076 (2002), a “statute having the effect of abrogating a vested property right, and not providing for compensation, does ‘authorize private property, to be taken without just compensation’ (Article III, § 40). Concomitantly, such a statute results in a person or entity being ‘deprived of his property’ contrary to ‘the law of the land’ (Article 24).”
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