(a) For the purpose of this section, a moderate-income multifamily rental housing facility is a rental apartment facility which (1) has five (5) or more dwelling units, (2) has entered into an agreement with the housing opportunities commission to participate in the section 8 housing assistance payments program for existing housing and (3) as of the January 1 preceding the tax year for which the tax deferral is sought has at least fifteen (15) percent of its units renting at or below the fair market rents for existing facilities as established by the department of housing and urban development for Montgomery County under section 8 of the United States Housing Act of 1937, as amended.
(b) Owners of rental facilities may apply for a deferral of Montgomery County real property taxes due and payable for a rental facility. Taxes eligible for the deferral shall, where applicable, consist of:
(1) General county tax.
(2) Washington Suburban Transit District tax.
(3) Fire district tax.
(4) Advance land acquisition tax.
(5) Metropolitan district tax.
(6) Regional district tax.
(7) Recreation district tax.
(8) WSSC sanitary district tax.
(9) Storm drainage district tax.
(10) Suburban district tax.
(c) The amount of taxes which may be deferred for any one (1) year shall be the amount calculated by taking the percentage of dwelling units renting at or below fair market rents as of January 1 to the total number of dwelling units in the facility, and multiplying the percentage by the assessment of the rental facility, and multiplying the product by the applicable tax rates. Where a rental facility consists of two (2) or more buildings, the owner may elect to have the tax deferral calculated separately for each building. The election shall be made at the time of application for the deferral and shall be final for the taxable year for which the deferral is sought.
(d) Interest must accrue on the deferred taxes at the rate specified in Sections 8-421, 10-102, 14-602, and 14-603 of the Tax-Property Article of the Maryland Code.
(e) At no time may the accumulation of deferred taxes and accrued interest exceed fifty (50) percent of the full cash value of the rental facility as determined by the supervisor or assessments for Montgomery County.
(f) All taxes deferred and interest accrued thereon shall be a first lien on the property, having the priority of real property taxes, until paid or otherwise extinguished by operation of law. The taxes are collectible by suit or by tax sale, regardless of any period of limitations imposed under law. In the event of tax sale for nonpayment of taxes, the property shall be sold for all unpaid taxes and interest, including deferred taxes and interest. In addition to being a first lien on the property, the deferred taxes and accrued interest shall be a personal liability of the owner of the property immediately prior to the happening of any of the conditions listed in subsection (g) below.
(g) All taxes deferred and interest accrued thereon shall be due and payable upon any of the following conditions:
(1) The property no longer qualifies as a moderate-income multifamily rental housing facility, as defined above;
(2) The owner fails to submit a timely annual application for deferral;
(3) Title to or controlling interest in the rental facility is conveyed, except in the case of a distribution by will or descent upon the death of the owner;
(4) A notice of intent to establish a condominium regime or create a cooperative housing project is given to tenants; or
(5) The rental facility becomes subject to tax sale.
(h) The director of finance, at the director's discretion, and upon request of the owner, may at any time enter into an installment agreement, in form acceptable to the director, to repay the county the accumulated deferred taxes and accrued interest except where deferred taxes have become due under subsection (g)(3), (4) or (5). All amounts to be paid under an installment agreement (1) shall bear interest at the rate specified in subsection (d); (2) shall remain a first lien on the property; and (3) shall become due and payable upon the happening of any condition listed in subsection (g)(3), (4) or (5) above. Once an installment agreement has been entered into, the property shall not be eligible for further deferral of taxes until all taxes previously deferred and accrued interest have been paid in full. In the event an installment payment agreement is entered into and the payment of any installment becomes delinquent, the property may be sold at tax sale or legal action may be instituted for the remaining balance due under the agreement.
(i) Applications for a tax deferral under this section shall be submitted to the director of finance by the first day of April immediately preceding the taxable year for which a tax deferral is sought to be applied or continued. The application shall include a certification as to the number of units rented at or below fair market rentals as of the prior January 1. Applications shall be on forms acceptable to the director and shall be sworn to by the applicant. The director shall notify the applicant of approval or disapproval.
(j) Any person who knowingly transmits a false or fraudulent application, or statement, or withholds information, in order to obtain a deferral under this section shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than one thousand dollars ($1,000.00) for each offense or six (6) months in jail or both. In addition, such persons shall be liable for and shall repay to the county any and all amounts of taxes and interest deferred. The county may enforce this provision by propriate civil action; and such persons shall be liable for all fees, costs and expenses of such proceedings.
(k) The county executive is authorized to adopt regulations under method (2) of section 2A-15 of this Code, for the administration of this deferral program. (1981 L.M.C., ch. 24, § 1, 1984 L.M.C., ch. 24, § 50; 2010 L.M.C., ch. 52, § 1; 2016 L.M.C., ch. 7, § 2.)
Editor’s note—Section 52-19 is cited in Montgomery County v. Federal National Mortgage Association, 740 F.3d 914 (4th Cir. 2014).