Muskin v. State Department of Assessments & Taxation

HARRELL, J. Petitioner, Charles Muskin, trustee of two trusts owning ground rent leases in Baltimore City, contends that Chapter 290 of the Laws of 2007, the Ground Rent Registry Statute, is invalid under the federal and Maryland constitutions and Maryland’s Declaration of Rights. Chapter 290 was enacted by the General Assembly in response to media attention and public interest in perceived problems with the ground rent system in Maryland. The statute requires Respondent, the State Department of Assessments and Taxation (“SDAT”), to ⁵⁵⁰ maintain an online registry of ground rent leases and, if a ground lease holder failed to register the property with SDAT by the statutory deadline, to issue an extinguishment certificate transferring the reversionary interest from the ground lease holder to the ground rent tenant. Although we shall assume, for the sake of discussion, that Chapter 290 would pass analytical muster according to the United States Constitution and relevant federal cases, Maryland’s Constitution, Declaration of Rights, and long standing relevant case law provide specific prohibitions on the retrospective application of statutes that lead to the abrogation of vested rights and the taking of property without just compensation.

For reasons that we shall elaborate, we hold that the extinguishment and transfer provisions of Chapter 290 are invalid under Maryland law. The registration requirements of the statute, however, survive Muskin’s challenge. Accordingly, the judgment of the Circuit Court for Baltimore City, which upheld generally the statute through its grant of the SDAT’s motion for summary judgment and denial of Muskin’s motion for summary judgment, shall be vacated and we shall remand the case for entry of a declaratory judgment and issuance of an injunction consistent with the views expressed in this opinion. I. Factual and Legal Background.

Petitioner, Charles Muskin (“Muskin”), is the trustee of two trusts owning 300 ground rent leases located in Baltimore City. A ground rent lease, common in Baltimore City, is a renewable 99 year lease where the fee simple owner of a property receives an annual or semi-annual payment (“ground rent”) and retains the right to re-enter the property and terminate the lease if the leaseholder fails to pay. Kolker v. Biggs, 203 Md. 137, 141 , 99 A.2d 743, 745 (1953). The fee simple owner retains a real property right in the land, but the leaseholder’s interest is governed by the law of personalty.

Id. Ground rent leases have a mixed history in Maryland, with proponents focusing on the tradition and importance of ground rental income, and critics focusing on anecdotal examples of ⁵⁵¹ homeowners being evicted for failure to pay a relatively small amount of ground rent and the complicated system for administering ground rent leases. 1 In response to media publicity in 2006 regarding perceived problems in the ground rent system, the Maryland General Assembly passed Chapter 290 of the Laws of 2007, which required the SDAT to create and maintain an online registry of properties subject to ground leases. Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, § 8-703(a). Chapter 290 was designed to create a centralized registry where ground rent tenants could find easily for their properties the amount of ground rent owed, the ground rent due date, the ground rent payee, and the address to whom the rents could be sent.

This registry sought to prevent predatory ejectments by protecting tenants against unintentional default. The new statute required ground rent holders to complete and submit a form 2 and registration fee 3 to the SDAT by 30 September 2010. Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, §§ 8-704 and 8-707(a). If a ground rent owner failed to register by the deadline, the new statute mandated that ⁵⁵² the reversionary interest of the ground lease holder under the ground lease is extinguished and the ground rent is no longer payable to the ground lease holder.

The extinguishment of the ground lease is effective to conclusively vest a fee simple title in the leasehold tenant, free and clear of any and all right, title, or interest of the ground lease holder, any lien of a creditor of the ground lease holder.... Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, § 8-708(a)(c). The session law did not contain a severability clause. Petitioner Muskin did not register the trusts’ ground rent leases with the SDAT by the deadline, filing instead an action in the Circuit Court for Anne Arundel County requesting a declaratory judgment that Chapter 290 was unconstitutional 4 and an injunction prohibiting the SDAT from issuing extinguishment certificates regarding the trusts’ ground leases.

The action was transferred to the Circuit Court for Baltimore City and a hearing was held on 6 October 2010. In a written opinion issued 25 October 2010, the Circuit Court denied Muskin’s motion for summary judgment, granted the SDAT’s summary judgment motion, and issued a declaratory judgment stating that Chapter 290 was constitutional under the United States and Maryland Constitutions. The Circuit Court based its rulings primarily on United States v. Locke, 471 U.S. 84 , 105 S.Ct. 1785 , 85 L.Ed.2d 64 (1985), and Texaco, Inc. v. Short, 454 U.S. 516 , 102 S.Ct. 781 , 70 L.Ed.2d 738 (1982), concluding that: Chapter 290 is not a retroactive abrogation of vested property rights because, inter alia, it does not operate retroactively. Chapter 290 requires ground lease holders to register their ground leases with the Department, and conditions their continued maintenance of that interest on compliance.

Further, Chapter 290 does not retroactively create or elimi ⁵⁵³ nate property rights, but instead, prospectively conditions the continued ownership of ground rents on compliance with the requirement of registration. As a result, Chapter 290 does not violate the takings clauses of both the United States and the Maryland Constitutions. Further, Chapter 290 does not violate the Equal Protection Clause because it is rationally related to legitimate government interests. This Court finds that the registration requirement of Chapter 290 is rationally related to legitimate governmental interests in fixing the ground rent system.

Lastly, on this record, this Court finds that the Plaintiff has not provided any basis for concluding that Chapter 290 was enacted in an arbitrary or capricious way, or that it lacked a rational basis. Petitioner filed an appeal to the Court of Special Appeals and subsequently a petition for writ of certiorari to us. We granted his petition and issued our writ, see Muskin v. State Dep’t of Tax’n, 418 Md. 190 , 13 A.3d 798 (2010), before the intermediate appellate court decided the appeal, to consider the following questions: 1) Does the Ground Rent Registry Statute ... violate the federal or state constitutions, or the Maryland Declaration of Rights, by ... extinguishing vested property and contract rights, by transferring property and contract rights to a third person without compensation, by violating the Contracts Clause, by violating due process and equal protection rights, or by being arbitrary? 2) Did the lower court err in granting summary judgment when Petitioner alleged facts supporting its claim that the Ground Rent Registry Statute process is so unreasonably harsh and costly that it deprives the Trusts in particular, and ground rent owners in general, of the value of their property? We hold as a matter of law that (1) the extinguishment and transfer provisions of Chapter 290, the Ground Rent Registry Statute, are unconstitutional under Maryland’s Declaration of Rights and Constitution; and (2) the registration require ⁵⁵⁴ ments are constitutional under federal and Maryland constitutional principles. 5 Accordingly, we reverse the judgment of the Circuit Court for Baltimore City, and remand the case to it with directions to grant the parties’ competing motions for summary judgment in part and deny them in part, and for entry of a declaratory judgment and issuance of an injunction, in a manner consistent with the views expressed in this opinion.

II

Relevant Standards of Judicial Scrutiny Concerning the Trial Court’s Action on Motions for Summary Judgment. Whether a circuit court’s grant of summary judgment is proper in a particular case is a question of law, subject to a non-deferential review on appeal. Conaway v. Deane, 401 Md. 219, 243 , 932 A.2d 571, 584 (2007); Charles Cnty. Comm’rs v. Johnson, 393 Md. 248, 263 , 900 A.2d 753, 762 (2006).

As such, in reviewing a grant of summary judgment, we review independently the record to determine whether the parties generated a dispute of material fact and, if not, whether the moving party was entitled to a judgment as a matter of law. Charles Cnty. Comm’rs, 393 Md. at 263 , 900 A.2d at 762 . We review the record in the light most favorable to the non-moving party and construe any reasonable inferences that may be drawn from the well-pled facts against the moving ⁵⁵⁵ party.

Conaway, 401 Md. at 243 , 932 A.2d at 585 . Here, neither Muskin nor the SDAT has argued that any of the facts are in dispute; therefore it was proper for the trial court to make a decision on the parties’ motions for summary judgment.

III

Maryland Constitutional Protections for Vested Rights. 6 Together, Maryland’s Declaration of Rights and Constitution prohibit the retrospective reach of statutes that would have the effect of abrogating vested rights. Dua v. Comcast Cable of Md. Inc., 370 Md. 604 , 630 n. 9, 805 A.2d 1061 , 1076 n. 9 (2002). Article 24 of the Maryland Declaration of Rights, guaranteeing due process of law, and Article III, ⁵⁵⁶ § 40 of the Maryland Constitution, 7 prohibiting governmental taking of property without just compensation, have been shown, through a long line of Maryland cases, to prohibit the retrospective reach of statutes that would result in the taking of vested property rights. See Dua, 370 Md. at 604 , 805 A.2d at 1061 and cases therein.

While generally the Maryland Declaration of Rights and Constitution are read in pari materia with their federal constitutional counterparts, this Court made clear in Dua that, under some circumstances, Maryland law may impose greater limitations (or extend greater protections) than those prescribed by the United States Constitution’s analog provisions. Dua, 370 Md. at 621 , 805 A.2d at 1071 . In those instances, federal cases interpreting the federal constitutional provisions are treated merely as potentially persuasive authority by a Maryland court interpreting the Maryland Declaration of Rights and Constitution. Id This is one of those instances.

As was done in Dua , our decision in the present case is guided by the stare decisis principles of relevant Maryland case law interpreting the Maryland Constitution, rather than relying on non-binding federal authorities interpreting reputedly analogous federal constitutional provisions. Dua, 370 Md. at 623 , 805 A.2d at 1072 . Our holding in Dua applies completely to the questions presented in the present case. We said there that [i]t has been firmly settled by this Court’s opinions that the Constitution of Maryland prohibits legislation which retroactively abrogates vested rights.

No matter how “rational” under particular circumstances, the State is constitutionally ⁵⁵⁷ precluded from abolishing a vested property right or taking of a person’s property and giving it to someone else. Id. To determine whether Chapter 290 is constitutional under Maryland law, we evaluate whether the statute purports to apply retrospectively and abrogates a vested right or takes property without just compensation. 8 If a retrospectively-applied statute is found to abrogate vested rights or takes property without just compensation, it is irrelevant whether the reason for enacting the statute, its goals, or its regulatory scheme is “rational.” Id. (stating that the relevant standard for determining whether a retrospective statute is constitutional is “whether the vested rights are impaired and not whether the statute has a rational basis.” (emphasis in original)).

A. Does Chapter 290 Operate Retrospectively? Retrospective statutes are those “acts which operate on transactions which have occurred or rights and obligations which existed before passage of the act.” Langston v. Riffe, 359 Md. 396, 406 , 754 A.2d 389, 394 (2000). Retrospective statutes that abrogate vested rights are unconstitutional generally in Maryland; however, as we said in John Deere Const. & Forestry Co. v. Reliable Tractor, Inc., 406 Md. 139, 147 , 957 A.2d 595, 599 (2008), “this Court has only provided limited analysis of what constitutes a retrospective application of a statute.” In John Deere, we explained that necessarily there is no bright line rule for determining what constitutes retrospective application, but opined nonetheless that retrospective statutes are those that “would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or ⁵⁵⁸ impose new duties with respect to transactions already completed.” 406 Md. at 147 , 957 A.2d at 599 (citing Landgraf v. USI Film Prods., 511 U.S. 244, 269 , 114 S.Ct. 1483, 1499 , 128 L.Ed.2d 229, 254 (1994)). In John Deere, we adopted the Supreme Court’s Landgmf factors analysis for retrospeetivity that evaluates “fair notice, reasonable reliance, and settled expectations” to determine “the nature and extent of the change in law and the degree of connection between the operation of the new rule and a relevant past event.” Landgraf, 511 U.S. at 270 , 114 S.Ct. at 1499 , 128 L.Ed.2d at 255 .

Applying the Landgmf model to the present case, fair notice is satisfied by the reasonable time period between enactment of Chapter 290 in 2007 and the registration deadline of 30 September 2010. Despite providing fair notice, however, Chapter 290 impacts impermissibly the reasonable reliance and settled expectations of ground rent owners by virtue of its extinguishment and transfer features as the consequences for non-registration (or untimely registration) of ground rents. The unique form of property represented by a ground rent is a fungible asset, freely bought and sold, and passed down through generations. Ground rent owners rely reasonably on the future income from ground rents or the ability to sell the fee simple interest on the open market or in the future, if necessary.

Although some changes to the ground rent system occurred in Maryland before the adoption of Chapter 290, a ground rent holder’s fee simple interest remained before Chapter 290 as settled an expectation as any fee simple owner’s interest in real property. See generally Heritage Realty, Inc. v. Mayor & City Council of Balt., 252 Md. 1 , 248 A.2d 898 (1969) (describing a series of statutes affecting ground rent redemption enacted from 1884 through 1900). The terms of the ground rent lease are fixed over the 99 year lease period and the conditions that create a reversionary interest in the property are predetermined. Before Chapter 290, owners of ground rent properties had no reason to believe that their interests were anything but well-settled, and had a reasonable basis to rely on the continuation of the state of the law permitting ground rent leases to continue. ⁵⁵⁹ Ground rent leases, established through transactions consummated many years ago, create rights and obligations for ground rent owners and leaseholders.

The registration requirement vel non of Chapter 290 is prospective in application, in that it regulates future action of ground rent owners; however, the extinguishment and transfer provisions of the statute are retrospective in application because, upon failure to register timely, the SDAT is required to reach back in time and divest the reversionary interest of the ground rent owner and cancel his/her/its right to receive future ground rent from the leaseholder. Once the extinguishment provision is triggered, Chapter 290 does not provide for additional remedies, such as an appeal or opportunity for a hearing. This seems a rather extreme regulatory overreaching to remedy anecdotal problems (not demonstrated to be systemic or endemic) as revealed by the 2006 newspaper articles and the legislative committee testimony in 2007 during consideration of the House bill that became Chapter 290. An example of an alternative statutory approach that would not be impermissibly retrospective in a similar registration scheme might have been one where failure to register a ground lease triggers an interim consequence, such as restrictions on collecting rents prospectively or a denial of access to the courts for enforcement of unregistered ground rents, until registration occurs.

This would have been strikingly different than Chapter 290’s abrogation of all the rights held by the ground rent owner, vested before the statute was enacted, for the failure to register before a fixed deadline. B. Vested Rights. A ground rent lease creates a bundle of vested rights for the ground rent owner, a contractual right to receive ground rent payments and the reversionary interest to re-enter the property in the event of a default or if the leaseholder fails to renew. These two rights cannot be separated one from the other; together they are the essence of this unique property interest, and as such, vested rights analysis must consider ⁵⁶⁰ them together. 9 As pointed out by the SDAT, there is no Maryland case on point that has held that the rights created under a ground lease are vested rights.

Courts have struggled with the difficulty of determining a precise definition of vested rights. 10 A vested right is “something more than a mere expectation based on the anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of a property....” Allstate Ins. Co. v. Kim, 376 Md. 276, 298 , 829 A.2d 611, 623 (2003) (citing Godfrey v. State, 84 Wash.2d 959, 963 , 530 P.2d 630, 632 (Wash.1975) (emphasis in the original)). The ground rent owner has a legal title that is vested and a firm expectation for the future enjoyment of ground rent payments. The right to re-enter the property or eject the leaseholder secure the ground rent owner’s future enjoyment of ground rental income.

In Dua , we said that vested rights include “that which is regarded as a property right under Maryland property law.” 370 Md. at 631 , 805 A.2d at 1077 . There can be no reasonable doubt that the reversionary interest to real property and the contractual right to receive ground rent are vested rights under Maryland law. Heritage Realty, 252 Md. at 11 , 248 A.2d at 904 (recognizing the importance of the reversionary interest, stating that “[t]he owner [of the reversionary interest] is entitled to receive fair market value on condemnation”). As such, our holding in Dua , that retrospective statutes may not abrogate vested property rights, leads us to the conclusion that the extinguishment and transfer provisions of Chapter 290 are unconstitutional. ⁵⁶¹ There exists, however, an exception to this general prohibition that applies solely to remedies and rules of evidence.

We have held consistently that the Legislature has the power to alter the rules of evidence and remedies, which in turn allows statutes of limitations and evidentiary statutes to affect vested property rights. Thistle v. Frostburg Coal Co., 10 Md. 129, 145 (1856) (holding that the Legislature has the power to alter and remodel the rules of evidence and remedies); Wilson v. Simon, 91 Md. 1, 6 , 45 A. 1022, 1023 (1900) (holding that the Legislature may abrogate retrospectively a property or contract right if there are other remedies available); Allen v. Dovell, 193 Md. 359, 363-64 , 66 A.2d 795, 797 (1949) (holding that the Legislature has the power to amend statutes of limitations so long as there is a reasonable time for enforcement of a cause of action); Langston, 359 Md. at 407 , 754 A.2d at 394 (holding valid statutes that altered only the procedures involved in enforcing rights or remedies available for enforcement); but see Prince George’s Cnty. v. Longtin, 419 Md. 450 , 19 A.3d 859 (2011), where the Court refused to give retrospective application of a statutory damages “cap” to a previously accrued cause of action. The vested rights in the present case are distinguishable from the remedies and evidence rules in these cases. In Allen , a vested cause of action was limited by a three year statute of limitation. 193 Md. at 363-64 , 66 A.2d at 797 .

Allen focused on the reasonable time frame for the statute of limitation because these types of statutes do not impair vested rights, rather they affect remedies. Id. (Statutes which do not destroy a substantial right, but simply affect a remedy, are not considered as destroying or impairing vested rights. Citing Kelch v. Keehn, 183 Md. 140, 144 , 36 A.2d 544, 545 (1944)).

In Dua , we said “[t]he Maryland Constitution requires that a plaintiff must have a reasonable period of time, after the enactment of the new statute, to bring the cause of action which existed under prior law.” 370 Md. at 633 , 805 A.2d at 1078 . Vested causes of action may be afforded similar protections, as are other vested rights, but in the spectrum of vested rights recognized previously by this Court, they are not as ⁵⁶² important as the vested real property and contractual rights which have been almost sacrosanct in our history. Statutes of limitation that affect vested causes of action are remedies, creatures of legislation, while real property and contractual rights are some of our most fundamental rights and a longstanding tradition under our common law. Exceptions granted for impairing rights represented by causes of action should not extend necessarily to vested real property and contractual rights.

Safe Deposit & Trust Co. v. Marburg, 110 Md. 410 , 72 A. 839 (1909), involved a statute which extinguished a ground rent lease, in a suit by the lessee for adverse possession, where the ground rent owner had not demanded payment of the ground rent for more than 20 years. The Court explained that the Legislature had every right to prescribe the type of evidence that may be used to satisfy the elements of adverse possession, and that failure to demand rent was legitimate evidence for a plaintiff to prove the hostility element of adverse possession. Marburg, 110 Md. at 416 , 72 A. at 841 . Further, adverse possession laws had been adopted on 4 July 1776 when the United States adopted the English statutes then in force, so the underlying cause of action existed before the ground rent leases in Maryland were created.

Marburg, 110 Md. at 414 , 72 A. at 841 . The evidentiary restriction in Marburg is not analogous to the circumstances of Chapter 290 or dispositive of the present case. Adverse possession doctrine existed historically to encourage beneficial use of properties and an orderly title system. Chapter 290 does not differentiate between ground rent owners who abandon their interests in the property and active, responsible ground rent owners, but rather strictly between registrants under an entirely new scheme and non-registrants.

The statute affecting vested real property and contractual rights in the present case does not purport to do so by establishing a remedy or rule of evidence. Rather, the circumstances of the present case are more similar to those in Garrison v. Hill, 81 Md. 551, 556 , 32 A. 191, 192 (1895), where we refused to give retrospective effect to a statute limiting the ⁵⁶³ amount of time in which probated wills could be challenged. We found there that, if given retrospective application, the statute was not the type that regulated simply a remedy; rather, when applied to vested rights in existence at the time the statute was enacted, it eliminated all remedies. Garrison, 81 Md. at 556-57 , 32 A. at 192 (emphasis added); see also Longtin, 419 Md. at 450 , 19 A.3d at 859 .

As we said in Baugher v. Nelson, 9 Gill 299, 309 (1850), a statute that “divests a right through instrumentality of the remedy, and under the preten[s]e of regulating it, is as objectionable as if [aimed] directly at the right itself.” This is a substantially similar situation to the present case where Chapter 290 purports to regulate vested rights, but in effect removes all remedies and extinguishes those rights completely. We held in State, use of Isaac v. Jones, 21 Md. 432, 437 (1864), that the “abrogation or suspension of a remedy, necessary to enforce the obligation of an existing contract ... is ... void.” We also held in Allen, 193 Md. at 363-64 , 66 A.2d at 797 , that “cut[ting] off all remedy ... in such a way as to preclude any opportunity to bring suit,” the Legislature “deprive [s improperly] a party of his [accrued] cause of action.... ” (Emphasis added.) The extinguishment and transfer provisions of Chapter 290 cut off all remedies, while divesting impermissibly the real property and contractual vested rights of ground rent owners. C. Taking without Just Compensation. 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 ⁵⁶⁴ 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 ⁵⁶⁵ 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 com ⁵⁶⁶ pensation. 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.

D. Confiscation of Property Through Regulation Muskin also argues that, based on assertions contained in his affidavit attached to his motion for summary judgement filed in the Circuit Court, a triable issue exists whether the process of complying with Chapter 290’s registration requirement is “so unreasonably harsh and costly” that it results in an “as-applied” regulatory taking and, as such, the trial court erred in granting the SDAT’s motion for summary judgment. To determine whether a regulatory taking occurred, the Court must look to the facts of the individual case and consider the following factors: “(1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action.” Neifert v. Dep’t of the Env’t, 395 Md. 486, 517 , 910 A.2d 1100, 1118-19 (2006). Muskin asserted that the costs of preparing the Ground Rent Registry forms would “easily exceed $25 per ground rent, and may exceed $50 per ground rent,” because he would be required to conduct a title search for each ground lease to determine the year the ground lease was created. 11 Muskin’s assertion that he was obliged to conduct a title search in each or most of the trusts’ ground rents is unfounded in light of the instruction on the registration form which directs the filer to complete this section merely “[t]o the best of the filer’s ⁵⁶⁷ knowledge____” The phrase “to the best of my knowledge” implies an acceptable margin of error in the declarant’s statement. See Cotton v. Frazier, 170 Tenn. 301 , 95 S.W.2d 45, 47 (1936) (finding that an affidavit would be “too much subject to the objection of uncertainty ...” when qualified with the phrase “to the best of my knowledge.”); Swanson v. Kraft, Inc., 116 Idaho 315 , 775 P.2d 629, 638 (1989) (Bistline, J., concurring) (finding that “to the best of my knowledge” was an “equivocating phrase.”); Portee v. State, 277 Ga.App. 536 , 627 S.E.2d 63, 66 (2006) (finding that “to the best of my knowledge” was a “representation that is equivocal at best”).

Without a requirement for extraordinary accuracy dictating a title search, Muskin’s economic impact argument is reduced to the mandatory registration fee, $10 for the first ground lease, and a maximum of $5 for each additional ground lease. Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, § 8~ 703(c). The registration fee is a one-time fee that, when compared with the median annual rent of $48 asserted in Muskin’s affidavit, collected through the lifetime of the ground lease, does not interfere unreasonably with the investment-backed expectations of ground lease holders. Even though the registration fees associated with compliance with Chapter 290 result in a small reduction in the net ground rental income for one year, Muskin’s trusts, upon registration of their ground rents, would continue to receive an undiminished stream of income from the ground rent payments in the future.

As discussed, supra, the registration requirement of Chapter 290 is an appropriate use of the State’s police power to regulate private property. For these reasons, the registration provisions of Chapter 290 are not so “unreasonably harsh and costly” that it constitutes a regulatory taking. JUDGEMENT OF THE CIRCUIT COURT REVERSED. CASE REMANDED TO THE CIRCUIT COURT WITH INSTRUCTIONS TO GRANT THE PARTIES’ SUMMARY JUDGMENT MOTIONS IN PART AND DENY IN PART, AND ENTER A DECLARATORY JUDGMENT AND IN ⁵⁶⁸ JUNCTIVE RELIEF, ALL AS CONSISTENT WITH THIS OPINION.

COSTS TO BE PAID BY RESPONDENT. BELL, C.J., and ADKINS, J., dissent. ADKINS, J., dissenting, in which BELL, C.J., joins. I respectfully dissent because I believe that the Maryland Declaration of Rights and Constitution permits the state to impose prospective conditions on the retention of a vested right so long as the holder of the right has an objectively reasonable time and opportunity to protect it by complying with the statute. 1 Accordingly, I would not strike down the legislature’s enactment of Chapter 290, which is a legitimate, rational law designed to regulate the ground lease system. 2 I submit that we should adopt the reasoning of the Supreme Court that legislation does not cause the loss of a right or property interest if the loss results from the holder’s failure to comply, after notice, with the statute’s reasonable requirements.

See U.S. v. Locke, 471 U.S. 84, 107 , 105 S.Ct. 1785, 1799 , 85 L.Ed.2d 64 (1985); Texaco, Inc. v. Short, 454 U.S. 516, 530 , 102 S.Ct. 781, 792-93 , 70 L.Ed.2d 738 (1982). The Majority holds that Chapter 290 is unconstitutional under the Maryland Declaration of Rights and Constitution because it retroactively abrogates vested rights and takes property without just compensation. Chapter 290, however, ⁵⁶⁹ does not abrogate vested rights or take property without just compensation. Instead, it simply requires that holders of ground leases comply with reasonable registration requirements.

No holder is required to forfeit his or her ground