Prepayment Penalties
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Does a lessee or buyer have an absolute right to prepay the lease?
Statutes
"In connection with a mortgage loan, a lender may not require or authorize the imposition of a penalty, fee, premium, or other charge in the event the mortgage loan is prepaid in whole or in part. Md. Code, Com; § 12-105.
If provided for in a loan contract, a prepayment charge or penalty is permitted if the loan is secured by a home, by a combination of home and business property, or by agricultural property, or if the loan is a commercial loan not in excess of $15,000, provided that the charge or penalty complies with certain specifications. Md. Code, Com; § 12-105."
Cases
A borrower or lessee does not have any right to prepay the obligations unless it is specifically provided for in the contract. Carlyle Apartment Joint Venture v. AIG Life Ins. Co., 333 Md. 265, 635 A.2d 366 (1994).
Comments
None.
Contributors
Steven N. Leitess
Leitess Friedberg PC
The statutory information was edited and reviewed with the support of MultiState
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