Section 121. Vacant Building Receiver
121.1 Scope.
This § 121 applies to a vacant structure, as defined in § 116.4.1.2 {"Definitions: Vacant structure"}, for which a notice or order to rehabilitate or to demolish is outstanding.
121.2 In general.
The Building Official may petition the court for appointment of a receiver to rehabilitate a vacant property, to demolish it, or to sell it to a qualified buyer. Except as otherwise provided in this § 121, the receiver may be any person.
121.3 Contents of petition.
The petition for appointment of a receiver must include:
1. a copy of the original violation notice or order, and
2. a verified pleading that:
a. avers that the required rehabilitation or demolition has not been completed, and
b. identifies and states the qualifications of the proposed receiver, if other than the Building Official.
121.4 Named respondents.
The petition for appointment of receiver must name as respondents:
1. the owner of the property,
2. any lien holder of record, and
3. the plaintiff in any proceeding that was timely filed under State Tax-Property Article § 14-833 {"Foreclosing right of redemption"} and for which the time for securing a decree of foreclosure has not yet expired.
121.4.1 Effect of failure to name plaintiff.
Failure to name a person described in § 121.4(3) does not prevent the action from going forward, but does prevent the receiver's lien for expenses incurred in rehabilitating, demolishing, or selling the vacant building from having priority over that person's lien interest.
121.5 Filing with Bureau of Liens.
A notice of the proceeding, together with a copy of the violation notice or order, must be filed with the Bureau of Liens. The Bureau must include a record of these in its lien reports, and the property cannot be transferred without the prior approval of the Building Official.
121.6 Notice to judgment creditors and lien holders.
After filing the petition and before a receiver is appointed, the Building Official must give notice of the pendency and nature of the proceedings by regular and certified mail to the last-known addresses of all judgment creditors and lien holders with a recorded interest in the property.
Exceptions:
1. This notice is not required for respondents named under § 121.4 {"Named respondents"} of this Code.
2. The Building Official is not required to send notices to any creditor or lien holder whose interest in the property is unrecorded.
121.6.1 Intervention.
Within 30 days of the date on which the notice was mailed, a judgment creditor or lien holder with a recorded interest in the property may apply to intervene in the proceeding and to be appointed receiver. A creditor or lien holder whose interest is not recorded does not have standing to intervene in the proceeding and is not eligible to be appointed receiver.
121.6.2 Effect of failure to give notice.
Failure to give any required notice to any interested person under this § 121 does not prevent the action from going forward, but does prevent the receiver's lien for expenses incurred in rehabilitating, demolishing, or selling the vacant building from having priority over that person's lien interest.
121.7 Appointment of owner, etc., instead of receiver.
Instead of appointing a receiver to rehabilitate or sell a vacant building, the court may permit an owner, mortgagee, or other person with an interest in the property to rehabilitate or demolish it, if that person:
1. demonstrates ability to complete the rehabilitation or demolition within a reasonable time,
2. agrees to comply with a specified schedule for rehabilitation or demolition, and
3. posts bond, in an amount determined by the court, as security for performance of the required work in compliance with the specified schedule.
121.7.1 Application to dismiss owner.
If it appears to the petitioner that the person appointed is not proceeding with due diligence or in compliance with the court-ordered schedule, the petitioner may apply to the court for immediate revocation of that person's appointment and for appointment of a receiver. The bond posted under this section must then be applied to the subsequently appointed receiver's expenses in rehabilitating, demolishing, or selling the vacant building.
121.8 Appointment of receiver.
If no qualified person with an ownership interest requests appointment to rehabilitate or demolish the property, or if an appointee is dismissed, the court must then appoint a receiver of the property for the purpose of rehabilitating and managing the property, demolishing the property, or selling it to a qualified buyer.
121.8.1 Parties divested of authority.
On appointment of a receiver to rehabilitate, demolish, or sell the property, all parties are divested of any authority to act in furtherance of those goals.
121.8.2 Penalties.
Any party who takes any step to rehabilitate, demolish, or sell the property is subject to the penalties for contempt.
121.8.3 Receiver not responsible to maintain or protect the property.
A receiver appointed to rehabilitate, demolish, or sell a vacant building has no duty to, and is not personally liable for failing to, maintain the property or protect the property from casualty or loss.
121.9 Powers of receiver appointed to rehabilitate or demolish.
A receiver appointed to rehabilitate or demolish a vacant building, in addition to all necessary and customary powers, has the right of possession with authority to:
1. contract for necessary labor and supplies for rehabilitation or demolition,
2. borrow money for rehabilitation or demolition from an approved lending institution or through a government agency or program, using the receiver's lien against the property as security,
3. manage the property after rehabilitation, with all the powers of a landlord, for a period of up to 2 years and apply the rent received to current operating expenses and to repayment of outstanding rehabilitation expenses, and
4. foreclose on the receiver's lien or accept a deed in lieu of foreclosure.
121.10 Powers of receiver appointed to sell.
A receiver appointed to sell a vacant building, in addition to all necessary and customary powers, may sell the property at public auction or private sale, following the provisions that apply to a receiver appointed under Rule 3-722 {"Receivers"} and Title 14, Chapter 300 {"Judicial Sales"} of the Maryland Rules.
121.10.1 Notice of auction.
In the notice of public auction, it is sufficient to describe the property by a street address and by reference to the liber and folio number of the title deed recorded in the land records of Baltimore City.
121.10.2 Buyer qualifications.
Before any sale, the applicants to bid in a public sale or the proposed buyer in a private sale must demonstrate the ability and experience needed to rehabilitate the property within a reasonable time.
121.10.2.1 Application fee.
The receiver may charge a reasonable fee to applicants in connection with the application to bid at a public sale or in connection with the solicitation of offers for a private sale.
121.10.3 Application of sale proceeds.
After deducting the expenses of the sale, the amount of outstanding taxes and other government assessments, and the amount of the receiver's lien, the receiver must apply any remaining proceeds of the sale, first to the petitioner's costs and expenses, including reasonable attorney's fees, and then to the liens against the property in order of priority.
121.10.4 Tax sale redemption.
A receiver may redeem a tax sale certificate at any time after the receiver's appointment by court.
121.11 Tenure of receiver appointed to rehabilitate.
The tenure of a receiver appointed to rehabilitate a vacant building may extend no longer than 2 years after rehabilitation. Anytime after rehabilitation, any party to the receivership may file a motion to dismiss the receiver on payment of the receiver's outstanding costs, fees, and expenses.
121.12 Final accounting.
At the end of the receiver's tenure, the receiver must file a final accounting with the court.
121.13 Receiver's lien for costs, etc.
Any costs or fees incurred by the receiver are a lien against the property in accordance with § 118 {"Liability for Expenses ..."} of this Code. The receiver's lien has priority over all other liens and encumbrances, except taxes or other government assessments. The receiver must allow the petitioner's costs and expenses, including reasonable attorney's fees, to be paid to the extent that the proceeds of the sale permit.
121.13.1 Foreclosure of lien.
A receiver may foreclose on the lien by a sale of the property at public auction, following 1 public notice and notice to interested parties in the manner of a mortgage foreclosure. After deducting the expenses of the sale, the receiver must apply the proceeds of the sale to the liens against the property, in order of priority. In lieu of foreclosure, and only if the receiver has rehabilitated the property, an owner may pay the receiver's costs, fees, including attorney's fees, and expenses or may transfer all ownership in the property to either the receiver or an agreed-on third party for an amount agreed to by all parties to the receivership as being the property's fair market value.
121.14 Transfer on sale.
Following court ratification of a sale, the receiver must sign a deed conveying title to the buyer, free and clear of all liens, judgments, and other encumbrances. On court ratification of the sale, any secured interest of a lien holder or judgment creditor automatically attaches to the proceeds from the sale, to the extent those proceeds are available under § 121.10.3 {"Application of sale proceeds"}.
121.15 Dismissal.
On sale of the property, the receiver must:
1. file with the court a final accounting, and
2. at the same time, file a motion with the court to dismiss the action.