MD Real Estate cheat sheet

A Maryland salesperson must be affiliated with a licensed broker and may be compensated only through that broker; a salesperson cannot accept a fee directly from a client.

A Maryland real estate license runs for a two-year term and must be renewed before expiration; practicing on an expired or inactive license is a violation.

Broker licensure requires additional pre-licensing education and active experience beyond the salesperson level, plus a broker examination.

MREC may deny, reprimand, suspend, revoke, or fine a licensee for misrepresentation, commingling, undisclosed dual compensation, or failure to supervise affiliated licensees.

A written brokerage agreement signed by the client is required before brokerage services are performed, and it must state the term, compensation, and agency relationship.

All advertising must identify the brokerage; a salesperson may not advertise in a manner suggesting the salesperson is independently licensed.

Client trust funds must be deposited into a separate escrow/trust account maintained by the broker; commingling with operating funds is prohibited.

Licensees must report certain events to the Commission, such as criminal convictions and disciplinary actions taken by other jurisdictions.

Maryland brokerage relationships include seller/landlord agent, buyer/tenant agent, and intra-company agent (one brokerage representing both sides).

Fiduciary duties owed to a client: loyalty, obedience to lawful instructions, disclosure, confidentiality, reasonable care and diligence, and accounting (OLD CAR).

The licensee must disclose in writing whom the licensee represents no later than first substantive contact with the consumer.

Intra-company agency requires the informed written consent of all parties; without consent the brokerage must decline representation of one side.

Confidential information acquired during the brokerage relationship may not be disclosed after the relationship ends.

A buyer's agent's compensation may be paid by the seller, the buyer, or both, but the arrangement must be disclosed and agreed in writing.

Ministerial acts, such as providing public information or opening a door at an open house, do not by themselves create an agency relationship.

A seller's agent may not reveal the seller's motivation, bottom-line price, or other confidential negotiating information to the buyer.

A contract for the sale of land must be in writing and signed by the party to be charged (Statute of Frauds).

Maryland residential contracts state that time is of the essence; missing a contingency deadline can waive the contingency and jeopardize the deposit.

Typical contingencies include financing, appraisal, home inspection, radon/well/septic testing, condominium or HOA document review, and sale of the buyer's home.

Days stated in the Maryland residential contract are calendar days unless the contract specifies business days.

Earnest money is held in the broker's escrow account; disputed entitlement is resolved under the contract's disbursement terms or by interpleader.

Maryland follows caveat emptor, but sellers must disclose known latent defects and deliver the Residential Property Disclosure or Disclaimer Statement.

The buyer's final walk-through confirms condition and completion of agreed repairs; it is not a substitute for the inspection contingency.

Any change to a signed contract must be made by written addendum signed by both parties.

A general warranty deed contains six covenants (seisin, right to convey, quiet enjoyment, warranty, encumbrances, further assurances); a quitclaim conveys only the grantor's present interest.

A deed must identify the parties and the land, state the interest conveyed, be signed by the grantor, and be acknowledged before it can be recorded.

Deeds are recorded in the land records of the county or Baltimore City where the property is located; recording gives constructive notice and establishes priority.

Maryland recognizes tenancy in common, joint tenancy (survivorship must be expressly stated), and tenancy by the entirety for married couples.

Ground leases must be registered with the State Department of Assessments and Taxation; an unregistered ground rent is unenforceable.

A ground rent tenant may redeem the rent by paying its capitalized value under the ground lease; statutory notice is required before collection actions or foreclosure.

Adverse possession in Maryland requires 20 years of actual, open, notorious, exclusive, hostile, and continuous possession.

Owner's title insurance protects the owner and lender's title insurance protects the mortgagee; the title commitment lists requirements and exceptions.

Maryland state recordation tax is $5.00 per $1,000 of consideration, and the first $30,000 of consideration is exempt for a principal residence.

Maryland lenders commonly secure loans with a deed of trust naming a trustee, permitting non-judicial foreclosure by power of sale.

The Loan Estimate must be delivered within three business days of application; the Closing Disclosure at least three business days before consummation.

LTV = loan amount divided by appraised value or purchase price, whichever is lower; down payment = price minus loan amount.

Maryland state transfer tax is 0.5% of consideration and is customarily paid by the seller; counties may add transfer or recordation tax.

FHA requires 3.5% down with mortgage insurance; VA offers 0% down for eligible veterans with a funding fee; conventional loans above 80% LTV usually require PMI.

One discount point equals 1% of the loan amount and is prepaid interest that lowers the note rate.

RESPA Section 8 prohibits fees or kickbacks for referral of settlement services; affiliated business arrangements require written disclosure.

Lien priority generally follows recording order, though real property taxes and certain assessments take statutory priority.

A residential security deposit in Maryland may not exceed one month's rent and must be held in a separate escrow account.

The landlord must return the deposit with an itemized statement of damages within 45 days after the tenant vacates and delivers possession.

The landlord must give the tenant a receipt for the deposit and a move-in statement of the tenant's rights under the security deposit law.

Eviction requires a court judgment and warrant of restitution; self-help eviction such as changing locks or removing belongings is unlawful.

Failure-to-pay-rent actions are filed in District Court after the required written notice, and the tenant may redeem the tenancy by paying the delinquent rent and costs before eviction.

A lease for more than one year must be in writing to be enforceable under the Statute of Frauds.

Maryland's rent escrow statute lets tenants pay rent into court when the landlord fails to correct serious defects after notice.

Retaliatory eviction for reporting code violations or joining a tenant organization is prohibited.

Managing rental property for others for a fee requires a broker license, and rents and deposits must be held in trust accounts.

Federal Fair Housing Act protected classes: race, color, religion, sex, national origin, familial status, and disability.

Maryland adds protected classes including marital status, sexual orientation, gender identity, source of income, age, and disability.

Prohibited practices include refusing to sell or rent, offering different terms, discriminatory advertising, steering, blockbusting, and redlining.

Reasonable accommodations in rules, policies, and services must be granted for a disability, and reasonable modifications at the tenant's expense must be permitted.

HUD administrative complaints must be filed within one year of the discriminatory act; federal court suits within two years.

Antitrust law prohibits price fixing, group boycotts, and market allocation; brokers may not agree collectively on commission rates.

Advertising must be truthful, identify the brokerage, and avoid words showing a preference or limitation based on a protected class.

The Maryland Consumer Protection Act prohibits unfair or deceptive trade practices, including misrepresentation of property or services.

Sales comparison approach: adjust each comparable; add value when the comparable is inferior to the subject and subtract when it is superior.

Cost approach: value = replacement cost minus depreciation plus land value; most reliable for new or special-purpose property.

Income approach: value = net operating income divided by the capitalization rate.

Gross rent multiplier = sale price divided by gross rent, a quick benchmark for comparing income properties.

Depreciation categories: physical deterioration, functional obsolescence, and external (economic) obsolescence.

A CMA is a broker's opinion of probable listing price; an appraisal must be performed by a state-licensed appraiser.

Months of inventory = active listings divided by average monthly sales; low inventory indicates a seller's market.

One acre = 43,560 square feet; one square mile = 640 acres.

Maryland residential sellers must deliver the Residential Property Disclosure Statement, or a Disclaimer Statement where permitted, before the buyer is bound.

Maryland requires disclosure of latent defects known to the seller that are not reasonably discoverable by the buyer and create an unreasonable risk.

For pre-1978 housing, federal law requires the lead-based paint disclosure, the EPA pamphlet, and a 10-day opportunity for the buyer to test.

Sellers and landlords must disclose known lead-based paint hazards and provide any related records or reports they possess.

The Chesapeake Bay Critical Area is land within 1,000 feet of tidal waters and wetlands, where development is restricted under state and local programs.

Maryland requires testing of private wells and inspection of onsite sewage disposal systems when property served by them is transferred.

Hazards commonly screened or disclosed: radon, asbestos, mold, underground storage tanks, and lead in paint or water.

Flood-zone location affects insurance and financing, and known water intrusion or flood damage history should be disclosed.

Commission = sale price times the agreed rate; each side's share = gross commission times the split percentage.

Seller net proceeds = sale price minus loan payoff, closing costs, seller-charged prorations, and brokerage commission.

Proration by annual figure: daily rate = annual amount divided by 365; charge = daily rate times days owned.

Maryland settlement statements typically use a 365-day year and prorate real estate taxes to the settlement date.

Rent paid in advance is credited to the buyer for the days after settlement that the seller already collected.

LTV = loan divided by value; monthly principal and interest = loan amount times the amortization factor for the rate and term.

Recordation tax = rate times consideration, computed on the applicable schedule; state recordation tax is $5 per $1,000.

Escrow accounting: each transaction has its own ledger, and the total of all ledgers must reconcile to the escrow bank balance.