Opinion ID: 2327958
Heading Depth: 2
Heading Rank: 3

Heading: Taking without Just Compensation.

Text: The SDAT, in its arguments, glosses-over Maryland's established takings jurisprudence. In addition to being a retrospective statute that impairs vested rights, Chapter 290 takes private property impermissibly from the ground lease owner and transfers it to the lease holders, without just compensation. The lessees receive clear title (because of non-registration) free of the ground rent lease. Article III, § 40 of the Maryland Constitution prohibits laws that authorize the taking of private property, without just compensation. This Court has long held that the Legislature does not have the power to give to a law the effect of taking from one man his property and giving it to another.... Thistle, 10 Md. at 144.; Ir. v. Shipley, 165 Md. 90, 98, 166 A. 593, 596 (1933) (stating that the State has not the power to destroy vested rights without compensation....); Dryfoos v. Hostetter, 268 Md. 396, 408, 302 A.2d 28, 34 (1973) (finding that a retrospective statute was invalid because [t]o reach any other result would be tantamount to saying that the Legislature could take a property interest from one person and vest it in another, which cannot be done by statute); Anne Arundel Cnty. Com'rs. v. United Rys. & Electric Co., 109 Md. 377, 391, 72 A. 542, 547 (1909) (finding a statute invalid because it divests without compensation [a corporation's] vested property right). In Dua, we reiterated that the State is constitutionally precluded from abolishing a vested property right or taking one person's property and giving it to someone else. 370 Md. at 623, 805 A.2d at 1072. No rational basis test may save a statute that removes vested rights from one person and vests them conclusively in another person, without just compensation. Id. The implications of allowing a rational basis test to justify the uncompensated taking of property were summarized by this Court in Dua: To concede to the Legislature the power, by retroactive legislation, adopted without the consent of the party to be affected, to accomplish such a result, is at once to concede to it the power to divest the rights of property and transfer them without the forms of law, upon any notion of right or justice that the Legislature may think proper to adopt;a concession that can never be made in a government where the rights of property do not depend upon the mere will of the Legislature, and which professes to maintain a regular system of laws for the protection of the rights of property of its citizens. 370 Md. at 624, 805 A.2d at 1073 (emphasis in the original). Regardless of how repugnant some of the individual anecdotes of outrageous settlement costs or unfair ejectments reported in the local print media or recounted to legislative committees, the General Assembly does not have the power to fix even an assertedly broken system, or eliminate it altogether, by transferring a ground rent owner's reversionary interest to a leaseholder without just compensation. Real property and contractual rights form the basis for economic stability, such as it is, has been, and will become again hopefully. Allowing the mere will of the Legislature to shift drastically the fee simple ownership of land or cancel contractual obligations will shake further the confidence of citizens in their constitutional protections from government interference. That being said, the Legislature, under the State's police power, has some ability to regulate and restrict the rights of private property owners without providing just compensation. Stevens v. Salisbury, 240 Md. 556, 563, 214 A.2d 775, 778 (1965). This power is exercised commonly in the form of: (1) taxation of private property, and (2) requiring land use approvals, such as zoning and subdivision requirements. When a statute enacted under the police power, purporting to regulate private property, takes private property completely from an individual for a public purpose, the doctrine of eminent domain is invoked, and the State must provide just compensation for the taking. Stevens, 240 Md. at 563-64, 214 A.2d at 779. While the registration requirement generally of Chapter 290 is an appropriate use of the State's police powers (as discussed later in this opinion), the extinguishment and transfer of the ground rent owner's reversionary interest in the property as a consequence of non-registration by a certain date can not be construed as simply a regulation. The loss of the reversionary interest necessarily means the loss of the future ground rent income, and the inability to re-enter the property if the leaseholder chooses not to renew the ground rent lease. These are substantial harms to the ground rent owner; harms for which the State provides no just compensation. While the State may be trying legitimately to improve the general welfare of citizens of Maryland who may live on property subject to ground rents by regulating the ground rent system, the extinguishment and transfer provisions of Chapter 290 are unconstitutional because they take ground rent owners' private property without just compensation. Less drastic measures could have been employed to avoid collision with our State constitutional protections. See supra p. 559, 30 A.3d at 970-71. The registration provisions of Chapter 290 remain intact, and continue to protect ground lease tenants against unfair ejectments by providing a centralized registry, with clear information on their ground rent obligations, such that they can avoid any future unintentional defaults.