MD Real Estate flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Maryland Real Estate Commission

State agency within the Maryland Department of Labor that licenses brokers and salespersons, investigates complaints, and imposes discipline such as fines, suspension, or revocation.

Salesperson compensation rule

In Maryland a salesperson may not accept a commission or fee directly from a buyer or seller; all compensation must be paid to and through the affiliated licensed broker.

Commingling

Mixing client trust funds, such as earnest money or security deposits, with a broker's personal or operating funds; prohibited in Maryland and grounds for license discipline.

Intra-company agent

A Maryland licensee affiliated with the same brokerage as another licensee in the transaction who, with written consent of all parties, represents a different client in that deal.

Duty of confidentiality

A broker's obligation not to reveal a client's confidential information, such as motivation or finances; the duty continues after the brokerage relationship ends.

Ministerial act

An administrative or clerical task, such as providing public information or opening a door, that does not by itself create an agency relationship under Maryland law.

Statute of Frauds

Legal rule requiring contracts for the sale of real property to be in writing and signed by the party against whom enforcement is sought.

Time is of the essence

Contract clause meaning deadlines must be met exactly; missing a contingency or settlement date can be a breach and affect entitlement to the deposit.

Financing contingency

Contract provision making the buyer's performance conditional on obtaining a loan by a stated date with specified terms; if unmet, the buyer may terminate and recover the deposit.

General warranty deed

Deed containing six covenants, including seisin, right to convey, freedom from encumbrances, quiet enjoyment, warranty, and further assurances, giving the broadest title protection.

Quitclaim deed

Deed that transfers whatever interest the grantor may hold with no warranties; often used to clear title defects or transfer property between family members.

Ground rent registration

Maryland requires ground leases to be registered with the State Department of Assessments and Taxation; an unregistered ground rent cannot be enforced or collected.

Tenancy by the entirety

Form of co-ownership available only to married couples in Maryland, featuring survivorship and protection against one spouse's creditors encumbering the property.

Deed of trust

Maryland's common mortgage instrument conveying title to a trustee to secure a loan; on default the trustee may foreclose by power of sale.

Closing Disclosure

Five-page statement of final loan terms and closing costs that must be delivered to the borrower at least three business days before consummation.

Loan-to-value ratio

The loan amount divided by appraised value or purchase price, whichever is lower; higher LTV means more risk and often requires mortgage insurance.

Security deposit limit

Maryland landlords may not require a residential security deposit exceeding one month's rent, and the deposit must be kept in a separate escrow account.

Security deposit return

The landlord must return the deposit plus any required interest, with an itemized list of deductions, within 45 days after the tenant vacates and delivers possession.

Summary ejectment

The Maryland District Court action by which a landlord obtains a judgment for possession and a warrant of restitution to remove a tenant lawfully.

Fair housing protected classes

Federal classes are race, color, religion, sex, national origin, familial status, and disability; Maryland adds marital status, sexual orientation, gender identity, source of income, and age.

Blockbusting

Inducing owners to sell by suggesting that members of a protected class are moving into the neighborhood and will lower values; a prohibited fair housing practice.

Price fixing

Competing brokers agreeing on commission rates or fees, which is an illegal restraint of trade under the Sherman Antitrust Act and Maryland law.

Sales comparison approach

Valuation method estimating value from recent sales of similar properties, adjusting each comparable upward when inferior and downward when superior to the subject.

Capitalization rate

Net operating income divided by property value; used in the income approach to convert a property's income stream into an estimate of market value.

Gross rent multiplier

Sale price divided by gross rent; a quick income-based benchmark for comparing apartment or rental properties of similar type and location.

Months of inventory

Active listings divided by the average number of sales per month; roughly six months generally reflects a balanced market.

Lead-based paint disclosure

Required for housing built before 1978: the seller or landlord discloses known lead hazards, gives the EPA pamphlet, and buyers get 10 days to test.

Maryland disclosure or disclaimer

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

Critical Area

Maryland land within 1,000 feet of tidal waters and wetlands, where development is limited by the Chesapeake Bay Critical Area law and local programs.

Proration daily rate

Annual amount divided by 365; multiply by the number of days the seller or buyer owns the property to allocate taxes, rent, or interest at settlement.

Seller net proceeds

Sale price minus loan payoff, closing costs, prorated expenses charged to the seller, and brokerage commission; the amount the seller receives at settlement.

Escrow ledger

Per-transaction record of trust funds received and disbursed; the sum of all ledgers must reconcile to the broker's escrow bank balance.