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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb1029*
HOUSE BILL 1029
N1 6lr3079
CF SB 691
By: Delegates Roberts, Griffith, Harrison, A. Johnson, Patterson, Taylor, Toles,
Turner, White Holland, Wims, and Woods
Introduced and read first time: February 9, 2026
Assigned to: Economic Matters
Committee Report: Favorable
House action: Adopted
Read second time: March 7, 2026
CHAPTER ______
AN ACT concerning 1
Real Property – Termination of Residential Real Estate Contracts – 2
Contingency Clauses 3
FOR the purpose of altering the definition of “contingency clause” as it applies to the 4
circumstances under which a residential real estate contract may be terminated by 5
a purchaser; altering the time period within which a certain holder of trust money 6
must distribute trust money to a purchaser; and generally relating to contingency 7
clauses and residential real estate contracts. 8
BY repealing and reenacting, without amendments, 9
Article – Real Property 10
Section 10–802(a) 11
Annotated Code of Maryland 12
(2023 Replacement Volume and 2025 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Real Property 15
Section 10–803 16
Annotated Code of Maryland 17
(2023 Replacement Volume and 2025 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
2 HOUSE BILL 1029
Article – Real Property 1
10–802. 2
(a) (1) In this section the following words have the meanings indicated. 3
(2) “Escrow agent” means a person engaged in the business of residential 4
real estate settlements who receives trust money. 5
(3) “Residential real estate” means: 6
(i) Real property improved by four or fewer single –family dwelling 7
units that are designed principally and are intended for human habitation; and 8
(ii) Unimproved real property zoned for residential use by the local 9
zoning authority of the county or municipality in which the real property is located. 10
(4) “Trust money” means a deposit made by a purchaser in connection with 11
a residential real estate sales transaction that the purchaser delivers to an escrow agent to 12
hold for the benefit of the purchaser and the seller. 13
10–803. 14
(a) (1) In this section the following words have the meanings indicated. 15
(2) [(i)] “Contingency” means a cl ause included in a contract of sale for 16
residential real estate that: 17
[1.] (I) Requires a specific event or action to occur for the 18
contract to be enforceable; and 19
[2.] (II) Entitles a party exercising the contingency to 20
terminate the contract and receive distribution of the trust money. 21
[(ii) “Contingency” includes a clause relating to: 22
1. Appraisals; 23
2. Back–up contracts; 24
3. Building permits, feasibility studies, or other 25
contingencies related to condominium notice; 26
4. Conservation easements; 27
5. Cooperative housing notices; 28
HOUSE BILL 1029 3
6. Deeds and titles; 1
7. Home or environmental inspections; 2
8. Homeowners association notices; 3
9. On–site sewage disposal system inspections; 4
10. Property condition disclosures and disclaimer act notices; 5
11. Short sales; 6
12. Sales of residential unimproved land; 7
13. Termite inspections; 8
14. Third–party approval not related to financing; or 9
15. Water and sewer assessments notices.] 10
(3) “Holder of trust money” means: 11
(i) An escrow agent as defined in § 10–802 of this subtitle; or 12
(ii) A licensed real estate broker as defined in § 17 –101 of the 13
Business Occupations and Professions Article. 14
(4) “Residential real estate” has the meaning sta ted in § 10 –802 of this 15
subtitle. 16
(5) “Trust money” has the meaning stated in § 10–802 of this subtitle. 17
(b) (1) (i) If a purchaser terminates a residential real estate contract under 18
the terms of a contingency clause of a contract of sale for residen tial real estate, the 19
purchaser may request the return of the trust money by providing the holder of the trust 20
money and the seller written notice of the request. 21
(ii) Within 10 days after receiving a request made in accordance with 22
subparagraph (i) of this paragraph, the seller shall provide the holder of the trust money 23
with a copy of a complaint filed in the District Court or a COPY OF A notarized, written 24
request for mediation PROVIDED TO A MEDIATOR relating to the distribution of the trust 25
money. 26
(iii) [Within 30 days after receiving a request made in accordance 27
with subparagraph (i) of this paragraph, the holder of the trust money, if they have ] IF 28
THE HOLDER OF THE TR UST MONEY HAS not received a copy of a complaint filed, or a 29
4 HOUSE BILL 1029
request for mediation made, in accordance with subparagraph (ii) of this paragraph, THE 1
HOLDER OF THE TRUST MONEY shall: 2
1. Distribute the trust money to the purchaser WITHIN 5 3
DAYS AFTER THE EXPIR ATION OF THE TIME SP ECIFIED IN SUBPARAGR APH (II) OF 4
THIS PARAGRAPH; and 5
2. Notify the purchaser and seller of the distribution. 6
(iv) If the holder of trust money receives a copy of a complaint filed, 7
or a request for mediation made, in accordance with subparagraph (ii) of this paragraph, 8
they shall hold the trust money until: 9
1. A court order or mediation agreement authorizes the 10
distribution of the money; or 11
2. The holder of the trust money files an interpleader action 12
in the District Court. 13
(2) A holder of trust money may not be liable for a decision to distribute 14
trust money made in accordance with this subsection. 15
(c) A claimant who is aggrieved by a distribution of trust money under this 16
section may file an action in the District Court sitting in the district in which the residential 17
real estate is located. 18
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 19
October 1, 2026. 20
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.