Maryland's Renters' Rights and Stabilization Act (HB 693, effective Oct 1, 2024) gives residential tenants on 1–3 unit properties a two-stage right of first refusal before a landlord can sell to a third party. Violating the law carries a $1,000 fine per violation, and some title insurers are now refusing to cover non-compliant sales.
Quick Answer
Maryland's Renters' Rights and Stabilization Act (HB 693, effective Oct 1, 2024) gives residential tenants on 1–3 unit properties a two-stage right of first refusal before a landlord can sell to a third party. Violating the law carries a $1,000 fine per violation, and some title insurers are now refusing to cover non-compliant sales.
Selling a Home with Tenants in Maryland: A Landlord's Guide
TL;DR: Maryland's HB 693 (effective Oct 1, 2024) gives tenants in 1–3 unit properties the right to purchase the property before it sells to a third party. There are two stages: a 30-day exclusive negotiation window before listing, and a 30-day window to match a third-party offer after one is received. Violating the process carries a $1,000 fine per violation — and some title companies are refusing to insure non-compliant sales.
Who HB 693 applies to
Maryland's Renters' Rights and Stabilization Act of 2024 applies to residential rental properties with 1–3 units. The tenant must be named on the lease AND have at least 6 months of occupancy. Properties with 4+ units follow different rules.
The two-stage right of first refusal
Stage 1 — Before listing: The landlord must give the qualifying tenant a 30-day exclusive negotiation window before putting the property on the market. During this 30 days, you cannot list the property, accept offers from third parties, or otherwise market it for sale.
Stage 2 — After a third-party offer: Once you have a ratified offer from a buyer, the tenant has 30 days to match that offer. A 5-day counteroffer process is available. If the tenant does not match within 30 days, you can proceed with the third-party sale.
What happens with the lease at closing
A fixed-term lease transfers to the buyer at closing — the new owner inherits the lease and its terms. The tenant cannot be forced to vacate simply because the property sold. Month-to-month tenants in Maryland and Montgomery County have the right to receive 60 days' notice to vacate. The security deposit and accrued interest must be transferred to the buyer at closing, with written notice to the tenant.
Showings and tenant cooperation
Maryland law requires a minimum of 24 hours' notice before showing a rental property. Include showing access language in your listing agreement and set expectations with the tenant early. Cooperative tenants can make a sale proceed smoothly; adversarial tenants can delay and complicate it.
The title insurance issue
Some Maryland title insurers are now refusing to issue policies on sales where the HB 693 ROFR process was not properly documented. If you skipped Stage 1 or can't demonstrate compliance, you may not be able to close. Keep written documentation of every notification and the tenant's response (or non-response) throughout the process.