MD RE Broker key terms

The state regulatory body that licenses brokers, associate brokers, and salespersons, adopts regulations, investigates complaints, and may suspend, revoke, or fine licensees for violations of Maryland real estate law.

The biennial education hours Maryland licensees must complete to renew a license, including mandated topics such as fair housing, ethics, and legal updates, verified through approved course providers before expiration.

The most severe disciplinary sanction the Commission may impose, permanently terminating a licensee's authority to practice unless the Commission later grants reinstatement after a defined waiting period and application.

A temporary withdrawal of a licensee's authority to act, imposed by the Commission for a stated period or until stated conditions are met, during which the licensee may not perform licensed activities.

Professional liability coverage protecting a brokerage against claims arising from negligent acts, errors, or omissions in providing real estate services; Maryland requires notification to clients when a firm lacks such coverage.

A brokerage relationship in which the same broker represents both buyer and seller in one transaction; Maryland permits it only with the informed, written consent of both parties after full disclosure of the conflicts.

A relationship in which the broker represents only one party as client, owes that party full fiduciary duties, and treats the other side as a customer with honesty and fairness but no advocacy.

The heightened legal obligations a broker owes a client, including loyalty, confidentiality, disclosure, obedience to lawful instructions, reasonable care, and accounting for money and property entrusted to the broker.

A broker's duty to reveal known facts that could affect a reasonable party's decision to buy, sell, or lease, such as latent defects, water intrusion, or pending zoning changes, regardless of which side the broker represents.

The written notice Maryland requires brokers to give prospective clients and customers explaining the types of brokerage relationships offered, the duties each creates, and the party's right to consent or decline.

A party's voluntary agreement to a brokerage relationship or conflict, given after receiving a clear written explanation of the consequences, alternatives, and any limited representation being offered.

A listing agreement entitling the broker to a commission no matter who procures the buyer, including the seller personally, during the listing term and any stated protection period after expiration.

A listing in which the broker earns a commission if the broker or another licensee produces a buyer, but the seller owes nothing if the seller personally finds the buyer without licensee assistance.

A non-exclusive arrangement paying a commission only to the broker who actually procures a ready, willing, and able buyer, allowing the seller to list with multiple brokers simultaneously.

A negotiated tail clause in a listing agreement keeping the seller liable for commission if a buyer introduced by the broker during the listing later purchases, typically within a set number of days after expiration.

The uninterrupted series of efforts by a broker that leads to a completed transaction, used to determine which competing broker is entitled to the commission when more than one claims credit.

A written contract defining the broker's duties to a buyer client, the scope of property search, compensation terms, and the duration of the relationship and any post-termination obligations.

A separate bank account, typically interest-bearing and labeled as a trust or escrow account, in which a broker deposits client funds such as earnest money and holds them apart from operating funds.

Illegally mixing client trust funds with the broker's personal or business operating money in one account, making it impossible to identify funds belonging to clients.

The unauthorized use or misappropriation of client funds held in trust, such as spending an earnest money deposit for brokerage expenses, which is a serious license law violation.

Money a buyer submits with an offer to show good faith, held in trust and applied to the purchase price at settlement or disbursed according to the contract's terms on default.

The closing accounting listing debits and credits to buyer and seller, including purchase price, loan payoff, prorated taxes, commissions, and fees, showing the net funds each party receives or pays.

The proportional division of a recurring expense such as property tax or rent between buyer and seller at closing, based on the number of days each party owns the property during the period.

The most complete form of private property ownership, of potentially unlimited duration, freely transferable, inheritable, and subject only to government powers and private encumbrances.

Ownership lasting only for the lifetime of a named person, after which the property passes to a remainderman; the life tenant may use the property but cannot permanently diminish its value.

The future ownership right held by a person entitled to receive the property when a preceding life estate ends, creating a present transferable interest even before possession.

A non-possessory right to use another person's land for a specific purpose, such as a driveway or utility line; it is an encumbrance that runs with the land and may be appurtenant or in gross.

Any claim, lien, easement, restriction, or other interest that burdens a property and may diminish its value or limit the owner's use, though not necessarily preventing transfer of title.

A statutory lien securing payment for labor or materials used to improve real property, which can attach to the owner's title even without the owner's agreement to the underlying contract.

Coverage protecting an owner or lender against losses from defects in title, such as undisclosed liens, forged documents, or recording errors, that existed at the policy's effective date.

A deed containing the broadest seller covenants, including seisin, right to convey, quiet enjoyment, warranty against encumbrances, and defense of title, covering defects arising before and during the grantor's ownership.

A deed in which the grantor warrants title only against defects created by or through the grantor, not against problems caused by earlier owners.

A conveyance that transfers whatever interest the grantor may hold without any warranty of title, commonly used to clear clouds, transfer between family members, or cure title defects.

A contract provision making the parties' obligations conditional on a specified event, such as financing approval, home inspection, or appraisal, allowing the buyer to cancel or renegotiate if unmet.

A standardized disclosure a lender must deliver shortly after a mortgage application, showing the loan terms, projected payments, closing costs, and cash needed to close.

A final standardized statement delivered to the borrower before closing that itemizes the actual loan terms, payments, and closing costs, replacing the earlier Loan Estimate figures.

An existing property use that predates current zoning rules and no longer complies with them; it may generally continue but often cannot be expanded or reestablished after abandonment.

An administrative exception allowing a property owner to depart from a zoning rule, such as a setback or height limit, because strict application would cause undue hardship unique to that parcel.

A local law dividing land into districts and regulating permitted uses, density, lot size, setbacks, and building height to guide growth and separate incompatible activities.

The reasonably probable, legally permissible, physically possible, financially feasible use of a property that produces the greatest value, serving as the foundation of most appraisal analysis.

A valuation method estimating value by analyzing recent arm's-length sales of similar properties and adjusting for differences in location, size, condition, and features.

The ratio of a property's net operating income to its value or price, used to convert income into an indicated value and to compare investment returns across properties.

The licensed broker's responsibility to oversee associate brokers and salespersons, review their transactions and advertising, maintain records, and ensure compliance with license law and regulations.

Federal law prohibiting discrimination in the sale, rental, and financing of housing based on protected characteristics, enforced alongside Maryland fair housing statutes covering additional protected classes.

Illegally guiding prospective buyers or tenants toward or away from neighborhoods based on protected characteristics, a fair housing violation even when the housing offered is otherwise available to all.

Inducing panic selling by suggesting that members of a protected class are moving into a neighborhood, which is prohibited because it exploits fear to generate listings and profit.

Property associated with events such as a prior death, illness, or alleged paranormal activity; Maryland generally does not require disclosure of such psychological impacts unless asked directly or required by law.

The requirement that all brokerage advertising identify the firm's licensed name and avoid false or misleading claims, with the supervising broker responsible for reviewing materials before publication.