Maryland Wholesaling Laws: HB 124 Compliance Guide

Maryland enacted HB 124 (Chapter 508), effective October 1, 2025, to regulate the assignment of residential real estate purchase contracts. The law creates dual disclosure requirements — one for the seller and one for the end buyer — and backs them with rescission rights and deposit refund protections. If you wholesale residential property in Maryland, here is exactly what the law requires and how to comply.

This guide is structured as a practical checklist. Each section tells you what to do, when to do it, and what happens if you do not. If you are looking for the broader national picture, see our state-by-state wholesaling legal guide.

What HB 124 Actually Says

House Bill 124, enacted as Chapter 508 of the 2025 Maryland Laws, is titled "Residential Property — Assignment of Contracts of Sale — Disclosure Requirements and Rescission." The companion bill, SB 160 (Chapter 509), contains identical provisions. Both were signed by Governor Wes Moore and took effect on October 1, 2025.

The law creates two categories of participant in a wholesale transaction:

1. Wholesale buyer: The person who enters into the purchase contract with the property owner, intending to assign that contract.
2. Wholesale seller: The person who assigns the contract to an end buyer (assignee). In most wholesale deals, these are the same person or entity.

Each role has a specific disclosure obligation, and failure to comply triggers specific remedies for the affected party. The law applies only to residential property and only to contracts executed on or after October 1, 2025.

The full text of HB 124 is available at mgaleg.maryland.gov.

Required Disclosures

HB 124 creates two distinct disclosure requirements. Each targets a different party and has a specific timing requirement.

Disclosure to the seller (from the wholesale buyer)

What to disclose: Written notice that the buyer may assign the contract of sale to another person.

When to deliver: Prior to entering into the contract of sale. This is a pre-contract requirement. The seller must receive this disclosure before they sign the purchase agreement. Providing it after contract execution does not satisfy the statute.

Why it matters: The seller needs to know before committing that the person across the table may not be the one who closes on their property. Without this disclosure, the seller may believe they are dealing with a traditional buyer.

Disclosure to the end buyer (from the wholesale seller)

• What to disclose: Written notice that the wholesale seller holds an equitable interest in the property and may not be able to convey title to the property.
• When to deliver: Prior to entering into the assignment agreement. The end buyer must understand the nature of the transaction before they commit.
• Why it matters: The end buyer needs to know they are purchasing contract rights from someone who does not own the property, not buying from the property owner directly.

Both disclosures must be in writing. There is no state-mandated form, but the language must clearly communicate the required information.

Rescission Rights and Deposit Protections

This is where Maryland's law has real teeth. HB 124 does not just require disclosures — it creates concrete remedies when disclosures are missing.

Seller rescission right

If the wholesale buyer fails to provide the required pre-contract disclosure and subsequently assigns the contract, the property owner may rescind the contract of sale without penalty at any time prior to closing.

What this means in practice: the seller can walk away from the deal at any point before the closing table — no damages owed, no breach claim available to the wholesaler — if the pre-contract disclosure was not provided. This right exists from the moment of the undisclosed assignment until settlement. A deal can be weeks into the disposition process, with an end buyer lined up and closing scheduled, and the seller can still walk away if the original disclosure was missed.

End buyer deposit refund right

An assignee (end buyer) who was not properly informed that the wholesale seller holds only equitable interest is entitled to a refund of any deposit paid in connection with the assignment.

What this means in practice: if an end buyer put down a deposit on an assignment deal and later discovers the wholesaler did not disclose their actual position, the deposit comes back. This protects end buyers from losing earnest money on transactions built on incomplete information.

Assignment vs Double Close — Which Rules Apply

Assignment of contract: You sell your equitable interest. One closing occurs between the original seller and your end buyer. Your assignment fee appears on the settlement statement. HB 124 disclosure requirements apply in full. One advantage of assignment: both parties see the complete transaction. Your fee is visible on the closing statement, which aligns with the transparency that Maryland's law promotes.

Double close: You purchase the property at one closing, take title, then sell to the end buyer at a second closing. You own the property at the time of the second sale. Because you hold title, you are not assigning contract rights — you are selling real estate you own. HB 124's assignment-specific provisions do not apply to the second sale. However, double closes carry roughly 3% in additional closing costs and require either cash or transactional funding.

Penalties for Non-Compliance

HB 124's enforcement is built into the remedies themselves. Unlike some states that tie wholesaling violations to consumer protection statutes with civil penalty provisions, Maryland's approach is more targeted: miss the disclosure, lose the deal.

• Seller rescission: The property owner can cancel the contract without penalty at any time before closing if the pre-contract disclosure was not provided. This is the primary enforcement mechanism. A single missed disclosure can kill a deal at any point in the process.
• End buyer deposit refund: The assignee can reclaim any deposit paid if the equitable interest disclosure was not provided. This creates a financial consequence for the wholesale seller beyond losing the deal itself.
• General consumer protection exposure: Beyond HB 124 specifically, wholesalers who engage in deceptive practices may be subject to Maryland's Consumer Protection Act (Maryland Code, Commercial Law, Title 13). Misrepresenting your position in a transaction — claiming to own a property you do not own, for example — can trigger additional liability.
• Maryland Real Estate Commission oversight: If you hold a real estate license in Maryland, failure to comply with disclosure requirements may result in disciplinary action from the Maryland Real Estate Commission.

The practical risk calculus is straightforward: provide the disclosures and the deal proceeds normally. Skip them and the seller can walk away at any moment before closing, the end buyer can reclaim their deposit, and you lose everything you invested in the deal.

Practical Compliance Checklist

Use this step-by-step workflow for every Maryland residential assignment deal.

1. Before you sign the purchase contract: Prepare a written disclosure that states you may assign the contract of sale to another person. This can be a standalone document or a clause within the purchase contract. The key is that the seller receives it and understands it before signing.
2. At contract signing: Present the disclosure alongside the purchase contract. Walk the seller through the assignment language. Get the seller's signature on the disclosure document (or acknowledgment within the contract). Even though HB 124 does not explicitly require a signed acknowledgment, having one eliminates any argument that the disclosure was not provided.
3. Before you market: Review your marketing materials. If you are marketing as an assignment, make sure every email, text, and listing identifies the transaction as an assignment of contract. Do not market the property as if you own it.
4. Before the assignment: Prepare a written disclosure for the end buyer stating that you hold an equitable interest in the property and may not be able to convey title. Provide this before the end buyer signs the assignment agreement.
5. At assignment signing: Have the end buyer acknowledge the equitable interest disclosure in writing. Execute the assignment agreement.
6. File everything: Retain signed copies of all disclosures, the purchase contract, and the assignment agreement. The seller's rescission right exists until closing, which means you need documentation available throughout the deal lifecycle. After closing, retain files in case of post-closing disputes.
7. If doing a double close instead: Document both closings separately. Retain copies of both settlement statements. HB 124's assignment-specific provisions do not apply when you hold title at the time of the second sale, but maintain clean records of the two-transaction structure.

Frequently Asked Questions

Does HB 124 apply to commercial properties?

No. HB 124 specifically applies to contracts of sale for residential property. Commercial properties, unimproved land, and other non-residential property types are not covered by this specific law. However, general real estate disclosure obligations and consumer protection statutes may still apply to non-residential transactions in Maryland.

Does HB 124 apply to contracts signed before October 1, 2025?

No. The law applies only prospectively. It does not affect contracts executed before the effective date. If you signed a purchase contract on September 30, 2025, and assign it in November, HB 124's requirements do not apply to that transaction.

What if the seller discovers the assignment after closing?

The seller's rescission right under HB 124 exists "at any time prior to closing." Once the transaction has closed, the rescission right has expired. However, the seller may still have claims under other legal theories (fraud, misrepresentation, consumer protection) if disclosures were not provided. HB 124's rescission right is a pre-closing remedy, not the only available remedy.

Do I need a real estate license to wholesale in Maryland?

Maryland does not require a real estate license to assign your own purchase contract. You are acting as a principal in the transaction. However, HB 124 requires specific written disclosures regardless of licensure status. If your marketing consistently advertises properties rather than contract positions, you may be crossing into activity that requires a license under Maryland law.

What about virtual wholesaling — operating from out of state?

Maryland law applies to Maryland residential properties regardless of where you are physically located. If you are assigning a purchase contract on a Maryland property, HB 124's disclosure requirements apply. It does not matter if you are based in Virginia, Pennsylvania, or anywhere else.

Can the seller rescind even if they knew about the assignment informally?

HB 124 requires written disclosure prior to entering into the contract. Verbal knowledge or informal awareness may not satisfy the statutory requirement. The safest approach is to provide the written disclosure regardless of what the seller may already know. Do not rely on "they knew" as a defense — document the disclosure in writing.

Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Laws and regulations change, and the application of any statute depends on the specific facts of your situation. Consult a licensed Maryland real estate attorney before relying on this information for any particular transaction. Deal Run provides tools and information to help wholesalers operate more effectively — we are not a law firm and do not provide legal services.