Maryland

General Procedures and Information

Method of Issuing Title Insurance

Title agents and attorneys issue title insurance policies and related forms.

Foreclosures

Mortgage instruments may be foreclosed (1) pursuant to a private power of sale, or (2) by an assent to decree, or (3) judicially.

When the foreclosure is instituted pursuant to a power of sale, the sale must be done under the supervision of a court of equity for the county, or Baltimore City, where the property is located. The person handling the sale must: (1) Docket the suit in the appropriate equity court and file a verified statement of mortgage debt together with the mortgage or certified copy as an exhibit; (2) give a bond approved by the clerk or court and publish notice of time, place and terms of sale (15 days notice required for real property) once a week for 3 successive weeks; and (3) a notice of sale, by certified mail return receipt requested, must be sent to mortgagor not less than 10 days nor more than 30 days before sale. The notice must also be sent to subordinate mortgage or involuntary lien holders. Private sales must be ratified by the court.

When the foreclosure is handled pursuant to an assent to decree, the procedure is substantially the same. The holder of the debt must file a petition to foreclose in equity and then file a verified statement of mortgage debt with the mortgage or a certified copy as an exhibit. The court will enter a decree that the property be sold and appoint a trustee to make the sale. The trustee must give bond and sell the property pursuant to the conditions and terms set out by the court.

For specific questions, contact Maryland underwriting personnel.

References:

Related Bulletins: None.

Corporate Directory: Maryland Contacts.

Redemption Rights

Borrower has the right to redeem property at any time up to the time the property is auctioned. After the auction, the borrower can attack the sale later on several procedural grounds. These rights are not statutory; they have been established by case law.

Survey Standards

Stewart Title Guaranty Company does not require a survey for deletion of the survey exception in loan policies on 1-4 residential properties and commercial transactions up to $10 million.

For any other properties on which a survey deletion is requested, (i.e. owner's policies or construction loans, or commercial property over $5 million), an acceptable survey must be provided.

For specific questions, contact Maryland underwriting personnel.

References
Related Bulletins:

MU000028   Survey Requirements - Loan Policies

MU000038   This Bulletin has been replaced by MU2007002.

Document and Form Information

Acknowledgments

These are the standard forms of acknowledgment:

  • MD Acknowledgment-Individual 1
  • MD Acknowledgment-Corporation 1

Conveyances

The customary form of conveyance is the Bargain and Sale Deed:

  • MD Deed-Bargain and Sale (Individual) 1
  • MD Deed-Bargain and Sale (Corporation) 1
  • MD Deed-Assignment 1

Affidavits important in real estate transfers are:

  • MD Affidavit of Qualification as First Time Maryland Homebuyer(s) 1995
  • Affidavit-Occupancy-Baltimore County Transfer Tax 1
  • Affidavit-First Time Homebuyers (State Transfer Taxes) 1
  • Preparation Certification 1

Maryland does not require witnesses on conveyances executed in Maryland.

Any document executed and acknowledged in accordance with the laws of another state will be accepted for recordation if the acknowledgment is in accordance with Maryland law. Since witnesses and specific disclaimers are not required, documents are usually accepted.

Preparation Certification: Per the dictates of Maryland Code Annotated, RP 3-104(f)

"No deed, mortgage, or deed of trust may be recorded unless it bears the certification of an attorney at law that the instrument has been prepared by an attorney or under an attorney's supervision, or a certification that the instrument was prepared by one of the parties named in the instrument."

Note: The definition of "attorney" is an attorney qualified to practice in Maryland.

Releases/Satisfactions

There are many methods which may be used to release a mortgage or deed of trust, but by far the most popular and widely used is by the recordation of a "CERTIFICATE OF SATISFACTION" signed by the noteholder, his agent, the mortgagee, or the trustee. The certificate of satisfaction is governed by Maryland Code Annotated, RP 4-203. Since deeds of trust, rather than mortgages, are the typically used security instrument, the certificate of satisfaction is typically signed by the noteholder and forwarded to the title agent for recordation. A partial release of one property among many in a deed of trust or mortgage may also be accomplished by a certificate of satisfaction. Of secondary importance in effectuating a release of a deed of trust is the recording of the original deed of trust promissory note along with the appropriate affidavit of the recording party as to its authenticity and other required inclusions (see MD Affidavit of Release 1).

Other common forms of release are:

  • MD Certificate of Partial Satisfaction or Partial Release 1
  • MD Affidavit of Release 1
  • MD Release of Mortgage 1
  • MD Release of Mortgage or Deed of Trust 1

Security Instruments

The customary security instrument used in metropolitan areas of Maryland is the deed of trust. Other areas of Maryland typically use the mortgage.

No witnesses are required on mortgage instruments executed in Maryland, but a witness is always a good inclusion.

Documents executed and acknowledged in accordance with the laws of another state may be accepted for recordation if the acknowledgment is in accordance with Maryland law. A preparation certification is required for recordation of a deed, mortgage or deed of trust and the instrument will be rejected without the certification.

Title Insurance Form Regulations

Policy forms and endorsements must be filed with the Commissioner of Insurance. However, special or unusual risk forms are not filed. Stewart Title Guaranty Company has filed the standard ALTA policy forms and endorsements for use in Maryland along with several specific endorsement forms.

References:

Forms List: Maryland Forms .

Fees, Rates and Taxes

Deed Transfer Taxes and Documentary Stamps

There are three taxes which must be considered when recording an instrument in Maryland. They are (1) state recordation tax, (2) state transfer tax, and (3) local or county transfer tax. Most of the 23 counties in Maryland and Baltimore City charge and collect all three of these taxes, however, a very few of the rural-oriented counties do not charge the local or county transfer tax [number (3)]. By way of example, on presentation by a title agent of a fully taxable deed transferring a parcel, the clerk of the circuit court for Anne Arundel County would charge all three taxes, and would collect tax (1) at $7.00/thousand (technically, $3.50/five hundred dollars rounded up to the next higher $500.00) on the total consideration for the STATE RECORDATION TAX (often referred to as ?documentary stamps?). The clerk would collect tax (2) at 1/2% of the total consideration for the STATE TRANSFER TAX, and would collect tax (3) at 1% of the total consideration for the COUNTY TRANSFER TAX. By comparison, Howard County would collect $5.00/thousand with the other two taxes being the same as Anne Arundel. Each county is different with some having certain exemptions or partial exemptions from the taxes, so the best method to deal with the differences is to call the clerk or circuit court in the appropriate county (or Baltimore City) before computing the transfer and recordation taxes to discuss IN DETAIL the transaction and to inquire about the taxes required. Some clerks will be helpful while others will not, but all counties are different and the monies required to be paid are always significant. Careful and detailed inquiry and investigation into the taxes is very important!

Split Transfer Taxes on Sale

In a residential sale the presumption is that the seller and buyer will each pay one-half of all three of the transfer and recordation taxes, unless the contract of sale provides otherwise. There is no such presumption of a split in a commercial sale.

For more specific questions, contact Maryland underwriting personnel.

References:

Related Bulletins: None

Mortgage Transfer Taxes

Generally, mortgage taxes (i.e., state recordation taxes) only apply if there is not a conveyance of title. However, this varies from county to county. Typically, the rate varies between $1.65 to $3.45 per every $500 of consideration. As recommended above, call the clerk in advance to check on the tax to be paid.

For more specific questions, contact Maryland underwriting personnel.

Real Estate Taxes

Taxes are due and payable semi-annually on July first and January first, but may be paid once per year on July first. Taxes are payable in advance.

Recording Fees

The clerk of the circuit court will charge $25.00 to record a deed, deed of trust or other recordable instrument of up to (and including) NINE PAGES, but will charge $75.00 to record the same instrument if it is ten pages or more. That extra page can cost you an additional $50.00. Technically, the charge the clerk makes to record a deed, for example, is $20.00, but the clerk will also collect a $5.00 ?Land Records Improvement Fund Surcharge?, thus making the deed cost $25.00. There is sometimes a $2.00 surcharge collected instead of the $5.00 surcharge, i.e., if you are recording a power-of-attorney of less than 9 pages rather than a deed, the total charge will be $22.00. Different instruments cost different amounts, but generally you will be dealing with $22.00, $25.00 or $75.00 per instrument. Deeds and deeds of trust will usually be less than 9 pages and will usually cost $25.00 each to record. To be safe, call the clerk before the closing to verify which your instrument will cost. The typical release or certificate of satisfaction (one less than 10 pages) costs $12.00 ($10.00 plus the $2.00 surcharge).

Search and Examination Fees

The purchaser customarily pays for the search and examination. The title insurance premium does not include the search and examination fee.

Title Insurance Rates

Title insurance rates must be filed with the Commissioner of Insurance.

The purchaser customarily pays for both the owner’s and loan policies.

For specific questions, contact Maryland underwriting personnel.

References:

Corporate Directory: Maryland Contacts.

Spousal Rights

Spousal Rights

Dower and curtesy have both been abolished in Maryland.

Community property is not recognized in Maryland.

Homestead laws are also not applicable in Maryland.

Statute Of Limitations

Statute Of Limitations

General judgment liens have a limitation period of 12 years unless they are renewed for an additional 12 year period. Maryland Rule 2-625.

State tax liens have no stated statute of limitations in Maryland.

Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

Maryland requires that only licensed title insurance producers or attorneys conduct closings if title insurance is being offered. Only licensed attorneys may close uninsured transactions (cash transactions) (i.e., Only licensed attorneys may close transactions where title insurance is not being offered/purchased according to the UPL requirements.).

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

No.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

Yes, under Maryland Annotated Code, Real Property Section 3-105.2 a licensed settlement agent, title insurer or lawyer may execute a release affidavit and present the cancelled check or wire disbursement (with proper authentication from bank).

Deeds

Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.

We require Special Warranty deeds to transfer title. Some Personal Representatives deeds contain limited warranties. Quit-claim deeds are NOT insurable. Quit-claim deeds are often prepared by private individuals or appear on preprinted forms. We recommend that the issuing agent not rely on a quit-claim deed in the chain and always question its validity/purpose. General warranty deeds are more reliable and we will accept them.

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed. 

Maryland has abolished both dower and curtesy. No requirement exists for spousal joinder.

Mortgage Tax

Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe. 

Each County (and Baltimore City) in Maryland has its own recordation tax which varies. All such information may be found at: http://www.dat.state.md.us/sdatweb/recordation.html

Payment Customs

No information is available at this time.

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

Property tax bills are issued in July/August of each year by the 24 counties (including Baltimore City) and the 155 incorporated municipalities (cities) in Maryland. Tax bills are rendered for the upcoming fiscal year and are effective as of July 1.

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.

Search fees are pass-through charges typically paid by the purchaser/borrower.  Examination fees are charged at the discretion of the title agent.

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)?  Please respond to each category.  If a minimum search period exists for any category, please state it.

A) In Maryland, a 60 year search is the standard for examining marketable title. See Coe v Hayes, 105 Md. App. 778, 785 (1995). Extension of this time period may be required if circumstances so indicate (e.g., restrictive covenants in old subdivision that pre-date a 60 year search). See Dept of Natural Resources v Welsh, 308 Md. 54, 57 (1986).

B) Maryland does not have a Marketable Title Act.

C) Other than case law, there are no applicable title examination standards.

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Deeds of trust or mortgages. Under Maryland Rule 14-202(a) a trustee may be an individual or an entity and does not need to be a Maryland Resident. Stewart does not authorize any of its officers, employees or associates to be listed as trustees.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state.

Standard Exceptions:

Rights or claims of parties in possession not recorded in the Public Records.

Easements or claims of easements not recorded in the Public Records.

Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey and inspection of the Land.

Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.

Taxes or assessments which are not recorded as existing liens in the Public Records.

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

None.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau. 

Rates and forms are filed with the Maryland Insurance Commission.

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.

There is State (.5%) and individual county transfer tax due on a conveyance of title: http://www.dat.state.md.us/sdatweb/transfer.html

Usury

Is usury coverage available?

Yes. Considered an extra hazardous endorsement.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?

MD has a Non-Resident Withholding Tax equal to 6.75% for individuals and 8.25% for entities: http://individuals.marylandtaxes.com/estatetax/withholding.asp

Witness Requirements

Are witnesses required on a deed or security instrument? If so, please describe.

In general, notary publics must witness a legal document affecting title. However, Maryland does not require acknowledgement of a deed for it to be eligible for recording. Unless the deed is for a leasehold estate, the deed must be acknowledged to be valid.

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