(A) Resale price and terms. Except for foreclosure proceedings, any MPDU constructed or offered for sale or rent under this chapter must not be resold during the control period for a price greater than the original selling price plus:
(1) A percentage of the unit’s original selling price equal to the increase in the cost of living since the unit was first sold, as determined by the Consumer Price Index;
(2) The fair market value of improvements made to the unit between the date of original sale and date of resale;
(3) An allowance for closing costs which were not paid by the initial seller, but which will be paid by the initial buyer for the benefit of the later buyer;
(4) A reasonable sales commission if the unit is not sold during the priority marketing period to an eligible person from the Department’s eligibility list. The resale price of an MPDU may be reduced if the physical condition of the unit reflects abnormal wear and tear because of neglect, abuse, or insufficient maintenance. Any personal property transferred in connection with the resale of an MPDU must be sold at its fair market value. In calculating the allowable resale price of an MPDU which was originally offered for rent, the Department must estimate the price for which the unit would have been sold if the unit had been offered for sale when it was first rented.
(B) Resale requirements during the control period.
(1) Any MPDU offered for resale during the control period must first be offered exclusively for 60 days to the Department. The Department may buy a unit when funds are available and the Director finds that the Department’s buying and reselling the unit will increase opportunities for eligible persons to buy the unit. If it does not buy the unit, the Department must notify eligible persons and qualified non- profits of the availability of a resale MPDU. The unit may be sold through either of the following methods:
(a) The Department may by lottery establish a priority order under which eligible persons who express interest in buying the unit may buy it at the approved resale price;
(b) The Department may notify the MPDU owner that the owner may sell the unit directly to any eligible person under the resale provisions of this chapter.
(2) A resale MPDU may be offered for sale to the general public only after:
(a) The priority marketing period expires; and
(b) All eligible persons who express an interest in buying it have been given an opportunity to do so.
(3) The seller is required to submit to the Department, prior to sale, for approval:
(a) A copy of the proposed sales contract, including a list and the price of any personal property included in the sale;
(b) Signed copy of the settlement sheet; and
(c) An affidavit signed by the seller and buyer attesting to the accuracy of all documents and conditions of the sale.
(4) A transfer of an MPDU does not comply with this chapter until all required documents and affidavits have been submitted to and approved by the Department.
(C) First sale after control period ends.
(1) If an MPDU originally offered for sale or rent is sold or resold after its control period ends, the qualified non-profits have the right for 30 days after the offer is made to match any bona fide offer to buy an MPDU.
(2) When an MPDU is sold or resold after its control period ends, the Department must terminate the MPDU controls and execute a release of the restrictive covenants and subordinate lien.
(D) Initial and subsequent rent controls. Except as provided in § 1-6A-5.2, moderately priced dwelling units built or offered for rent under this chapter must not be rented for 40 years after the original rental at a rent greater than that established by regulation adopted by the county. Whenever any moderately priced dwelling unit (other than those built, sold or rented under any federal, state or local program offered by the County) is offered for rent during the 40 year control period, it must be offered exclusively for 90 days to eligible persons, as determined by the Department, for use as his or her own residence. The County may assign its right to rent such units to persons of moderate income who are eligible for assistance under any federal, state or local program administered by an approved non-profit corporation or housing agency.
(E) Purchase money mortgages. Purchase money mortgages for MPDUs will be written such as to provide that in the event of foreclosure, pre-notification to the Director is required of the mortgagee. In such event, the Director shall have 30 days to determine whether to permit the foreclosure to occur in accordance with § 1-6A-9(F), or if the Director determines that the waiting list of eligible prospective MPDU purchasers warrants retaining the MPDU unit in inventory, the Director is authorized to notify the foreclosing mortgagee (if funding is available) that the Housing Initiative Fund (HIF) guarantees to the mortgagee payoff of the principal and interest due on the purchase money mortgage within 90 days, in return for the foreclosure action to be cancelled with concurrent enforceable eviction acceptance being obtained from the mortgagor MPDU owner. Should the latter not be obtainable, the foreclosure would be permitted to proceed but with the condition that upon successful foreclosure and eviction if necessary, the HIF pays the principal, interest and incurred fees to the mortgagee, whereupon the title to the MPDU property is passed to the HIF. The HIF will thereupon re-offer the property in accordance with the MPDU program to eligible persons, with the requirement that the HIF is made whole for monies spent in the process of retaining the property in the MPDU program.
(F) Foreclosures or other court- ordered sales.
(1) If an MPDU is sold through a foreclosure or other court-ordered sale, a payment must be made to the Housing Initiative Fund as follows.
(a) If the sale occurs during the first 15 years after the original sale or rental, any amount of the foreclosure sale price which exceeds the total of the approved resale price under subsection (A), reasonable foreclosure costs, and liens filed under the Maryland Contract Lien Act, must be paid to the Housing Initiative Fund. If the remaining balance under the original first deed of trust or mortgage exceeds the resale price under subsection (A), then the difference between the foreclosure sales price and the balance of the original first deed of trust (plus reasonable foreclosure costs) must be paid to the Fund.
(b) If the sale occurs after the first 15 years after the original sale or rental, the payment to the Fund must be calculated under subsection (C).
(c) If the MPDU is a rental unit, the resale price under subsections (A) and (C) must be calculated using the maximum sale price in effect when the unit was originally offered for rent.
(d) If the MPDU is sold subject to senior liens, the lien balances must be included in calculating the sale price.
(2) All MPDU covenants and liens must be released after the required payment is made into the Housing Initiative Fund.
(G) Waivers. The Director may waive the restrictions on the resale and re-rental prices for MPDUs if the Director finds that the restrictions conflict with regulations of federal or state housing programs and thus prevents eligible persons from buying or renting units under the MPDU program.
(H) Bulk transfers. This section does not prohibit the bulk transfer or sale of all or some of the rental MPDUs in a subdivision within 25 years after the original rental if the buyer is bound by all covenants and controls on the MPDUs.
(I) Compliance. The county must adopt regulations to promote compliance with this section and prevent practices that evade controls on rents and sales of MPDUs.
(Ord. 02-25-321, 11-21-2002; Ord. 14-23-678, 11-13-2014; Bill No. 15-06, 7-7-2015; Bill No. 22-27, 10-18-2022)