Residential Property - Assignment of Contracts of Sale - Disclosure Requirements and Rescission
Summary
HB124 creates new disclosure and rescission rules for certain residential real estate contracts involving “wholesale” buyers and sellers. A wholesale buyer is a person who contracts to buy owner-occupied residential property with the intent to assign the contract to someone else for a fee, while a wholesale seller is a person who contracts without holding legal title and then assigns the beneficial interest to another party. Before entering into such contracts or assignments, the bill requires written disclosures: wholesale buyers must tell the owner that the contract may be assigned, and wholesale sellers must tell a prospective assignee that they may not be able to convey title because they hold only an equitable interest.
The bill also gives owners and buyers/assignees a right to rescind in certain cases. An owner may rescind a contract with a wholesale buyer, or that buyer’s assignee or successor, without penalty before closing if the required notice was not given and the contract was assigned. Likewise, a buyer or assignee may rescind an assigned contract for residential property without penalty before closing if a wholesale seller failed to provide the required notice, and that rescission entitles the buyer or assignee to a refund of any deposit paid. The law is prospective only and applies to contracts executed on or after its October 1, 2025 effective date.
In terms of state law, HB124 adds a new section to the Real Property Article and amends the general contract-of-sale disclosure statute to make compliance with the new wholesale-assignment disclosure requirements mandatory where applicable. It does not broadly regulate all residential sales; instead, it targets owner-occupied residential property and assignment-based transactions, especially those associated with wholesaling practices. The bill also expressly excludes sales proceeding under Maryland Rule 14-215.
The overall sentiment around the bill appears strongly supportive and noncontroversial. It passed the House 136-0 and the Senate 46-0, indicating unanimous approval in both chambers. The lack of recorded committee transcript discussion suggests there was little visible public dispute in the available record.
The main policy concern addressed by the bill is consumer protection in real estate assignment transactions, particularly the risk that homeowners or assignees may not understand that a contract can be flipped to another party or that the person assigning the contract may not actually be able to deliver title. Any contention would likely center on the impact of the new disclosure and rescission rights on wholesale real estate practices, but no opposition is reflected in the voting history provided.
Impact
HB124 amends Maryland’s Real Property Article by adding Section 10-715 and updating Section 14-117 to require that certain residential contracts of sale include the new wholesale-assignment disclosures. It creates enforceable notice obligations for wholesale buyers and wholesale sellers, and it gives affected owners, buyers, and assignees a statutory right to rescind without penalty in specified noncompliance situations, including a refund of deposits paid in connection with the assignment. The bill applies prospectively only to contracts executed on or after October 1, 2025.
Sentiment
The bill appears to have been received favorably and passed with unanimous support in both chambers, with no recorded dissent in the available vote history. The absence of committee transcript material also suggests there was little publicly documented controversy during consideration. Overall, the sentiment is best characterized as broadly supportive and focused on consumer protection.
Contention
The principal issue underlying the bill is the regulation of residential real estate wholesaling, a practice that can involve contract assignments and equitable interests that may not be obvious to homeowners or downstream buyers. Supporters likely viewed the bill as a transparency and anti-misrepresentation measure, while any potential critics would be concerned about added compliance burdens or limits on assignment-based business models. However, the available record shows no recorded opposition, and the bill passed unanimously.