HB0124 creates new disclosure and rescission rules for certain residential property contract assignments involving “wholesale” buyers and sellers. The bill defines wholesale buyers as parties who contract to buy owner-occupied residential property with the intent to assign the contract for a fee, and wholesale sellers as parties who contract without holding title and then assign their beneficial interest. Before a wholesale buyer enters into a contract, the buyer must disclose in writing that the contract may be assigned. Before a wholesale seller assigns a contract, the seller must disclose in writing to the prospective assignee that the seller holds only an equitable interest and may not be able to convey title.
The bill also gives rescission rights when those disclosures are not made. An owner of residential property may rescind, without penalty and before closing, if a wholesale buyer fails to provide the required notice and then assigns the contract. Likewise, a buyer or assignee may rescind, without penalty and before closing, if a wholesale seller fails to provide the required notice, and the rescinding buyer or assignee is entitled to a refund of any deposit paid. The bill applies prospectively only to contracts executed on or after its effective date, October 1, 2025, and it amends the Real Property Article to make compliance with the new section a required part of residential contracts of sale.
The bill’s impact is to add consumer-protection style disclosure requirements to Maryland residential real estate transactions involving contract assignments, particularly in the wholesaling market. It amends Section 14-117 of the Real Property Article to require contracts of sale to comply with the new disclosure provision in Section 10-715, and it creates enforceable remedies that can unwind a transaction before closing. The practical effect is to regulate assignment-based home sale practices and reduce the risk that owners, buyers, or assignees are misled about who holds title and whether a contract can actually be conveyed.
The available context shows little recorded debate or voting history, so there is no documented committee sentiment in the materials provided. Based on the bill’s structure, the apparent policy goal is to increase transparency and protect homeowners and purchasers in wholesale real estate transactions. Any likely support would come from consumer advocates and parties concerned about deceptive assignment practices, while potential opposition could come from real estate wholesalers or others who rely on assignment fees and flexible contract transfers.
A notable point of contention is the bill’s treatment of wholesale real estate practices, since it limits the ability to assign contracts without disclosure and creates a right to rescind if notice is not given. The bill also distinguishes between a party with legal title and one with only an equitable interest, which may affect how assignment transactions are marketed and completed. Because the bill applies only prospectively, it avoids disturbing existing contracts, but it still imposes new compliance obligations on future residential sale agreements.
The bill adds Section 10-715 to the Real Property Article and amends Section 14-117 to require residential contracts of sale to include the new disclosure rules for wholesale buyer and wholesale seller assignments. It creates rescission rights and deposit-refund remedies for owners, buyers, and assignees when required notices are not provided, thereby regulating assignment-based residential real estate transactions and strengthening disclosure obligations in Maryland law.
No committee transcript or vote record is provided, so there is no direct evidence of legislative debate or recorded support/opposition in the materials. The bill’s design suggests a consumer-protection orientation, likely favorable to homeowners and purchasers who want transparency in wholesale assignment transactions, while potentially unfavorable to real estate wholesalers and others who depend on assignment fees and contract flipping.
The main policy tension is between protecting consumers in residential real estate transactions and preserving the ability of wholesale buyers and sellers to assign contracts for profit. Critics of the practice may support the bill’s mandatory disclosures and rescission rights because they reduce the risk of misleading or unenforceable transactions, while wholesalers may object that the bill adds friction, liability, and potential loss of deposits or fees. The bill also raises practical questions about when a party has only an equitable interest and whether title can actually be conveyed, which is central to the disclosure requirement.