Maryland Real Estate Practice & Law Fourteenth Edition
Summary of Changes
Chapter 1: Maryland Real Estate License Law and Related Regulations
•Clarify legal terms (statutes): article; title; (regulations) chapter
•Clarify contract terms: consideration
•Clarify agency terms with respect to delivery of brokerage services: special agent; general agent
•Commission (REC) collects license fees, but forwards them to the Maryland Comptroller to be disbursed from the State Real Estate Commission Fund, but forwards fines to the General Fund of the State.
•NEW TABLE (1.2): Deadlines for Passing Tests and Activating Licenses
•UPDATED TABLE (1.2) Fees for licenses and other services.
•Time limit for reinstatement after expiry of license changed to 3 years and fee is now $150.
•Time limit for remaining on inactive status is now 3, not 4 years. But continuing education requirements must be met during the period of inactivity.
•Reimbursement from Guaranty Fund limit if now $50,000 rather than $25,000 per qualified claim.
•Limit on proposed order payment is raised from $3,000 to $5,000.
Chapter 2: Real Estate Agency
•Emphasis that commercial real estate agency is governed by common law rather than by Maryland statute. The difference is addressed in the agency course now required by licensees who will perform even one commercial transaction during the term of their license. Commercial real estate is carefully defined.
•The difference between client-level agency service and third-party level is more clearly developed. As is the difference between ministerial and magisterial acts, and between clients and customers.
Chapter 3: Real Estate Brokerage
•3-hours course approved by the Commission in supervision required for brokers, branch managers and team leaders at alternate renewals
•Expanded definition states situations in which even persons who hold brokerage licenses may be considered unlicensed persons.
•In dual agency situations within a team, a broker may designate another person to select which members of a team are to serve as ICAs for buyers and sellers. But that person may not be a member of the team doing the dual representation.
•When a party is entitled by law to a refund of his or her earnest money, the broker holding the money (absent agreement of the arties) must follow the steps of 17-505. This applies also to situations involving purchase of HOAs, condos for which the law provides right-of-cancellation periods.
•If earnest money is held by a title company, that company is not required to follow 17-505. With consent of both parties, the law allows a broker to entrust such earnest monies to an escrow company.
•Until the offer/counteroffer process is completed and the sales agreement signed by both parties, broker may return the earnest money at any time the offering parties requests its return.
•Listings and other documents related to a transaction must be retained at least 5 years.
•When licensees buy or sell property for themselves, or any member of their family or any member of a team of which they are member, must make know to all parties their licensee status, i.e., that they are licensees.
•When advertising to sell or buy property for themselves (or related persons) licensees must show in the advertisement that they are licensees.
•An agent who includes his or her email address when promoting business on social media such as Facebook and Craigslist should also include a telephone number that is identified as the office phone.
Chapter 4: Listings & Buyer Representation Agreements
•Details about proper use of the written/print Understanding Whom form.
•Situations (in presumed buyer representation) requiring oral disclosure of representation
•Updated Maryland Residential Property Disclosure/Disclaimer form. Fig. 4.1
•Expanded explanation of term material fact. And the requirement for such disclosure.
•Includes the latest Property Disclosure Form, along with a greater discussion of material facts, and the requirements for disclosure
•A licensee should refuse to advise a non-client buyer whether to have a home inspection since to do so would be to render expert advice (a magisterial act) opening him or her to the charge of undisclosed dual agency.
•Expanded discussion of stigmatized property disclosure, showing difference in immunity between owner/seller/seller’s agent and licensee acting as buyer’s agent.
•Expanded discussion of anti-trust compliance. Clarification of requirements for seller’s consent for dual agency, distinguishing between that given at time of listing and that required when a dual agency offer in pending. There are analogous requirements for buyer-clients.
Chapter 5: Interests in Real Estate
•No changes.
Chapter 6: How Ownership is Held
•Expanded discussion of Tenancy by the Entirety in view of the recent legal validation of same-sex marriages in Maryland. Also federal tax consequences of filing as a married couple vs. filing individually.
•Condo bylaws requiring H0-6 insurance can now be passed by a 51% rather than a 2/3 vote. The bylaw is not required by law but is thereby made easier for condo leadership to pass.
•Condo boards may now meet in closed session to discuss upcoming “business transactions.” Formerly HOA boards could, but not condo boards.
•Condo boards’ right to foreclose on liens has been limited to those liens due to unpaid assessments (but not, for example, fines). Fines, etc., must be collected by other legal means.
•Unpaid assessments up to four month ($1,200) now constitute a priority lien over mortgage liens (but not municipal liens have first priority.)
•NEW table: Table 6.1 Cancellation Periods in Various Sale Situations.
Chapter 7: Legal Descriptions
•No changes.
Chapter 8: Real Estate Taxes & Other Liens
•Table 8.1 Revised and updated
Chapter 9: Real Estate Contracts
•Figure 9.1 Maryland Association of REALTORS® Statewide Residential Sales Contract Updated
•Real Estate Guaranty Fund payout limit raised from $25,000 to $50,000.
•Lists requirements for fire sprinklers in residential construction contracts.
•Discussion: Importance of retention of agency representation disclosure (Understand Whom) forms, even unsigned ones, as well as those associated with deals that never go to settlement.
•Expanded discussion of use of powers of attorney in settlements.
Chapter 10: Transfer of Title
•No changes
Chapter 11: Title Records
•Clarification: Seller may require buyer to use specific title company for settlement as a condition of the deal but brokerage licensees serving in the situation are prohibited from making such a requirement.
Chapter 12: Real Estate Financing
•Extended discussion of actions and statements required of licensees and others actions and statements licensees are prohibited from in short sales situations.
•Situation in which a mortgage is presumed paid.
•Position of residential tenants when the property they are renting is foreclosed.
Chapter 13: Leases
•Discussion of recent reform laws and court decisions on rights of ground lease tenant-holders and ground lease landlord-owners
Chapter 14: Environmental Issues in Residential Real Estate Transactions
•Losses in litigation with lead-affected tenants are no longer limited to $17,000. The part of the law establishing such modest amounts for the injured party in return for loss of right to sue was declared contrary to Maryland’s Declaration of Rights, Article 19.
Chapter 15: Fair Housing
•NEW Table 15.1 “Fair Housing Advertising Guidelines”
Chapter 16: Closing the Real Estate Transaction
•Explanation of the “binder” in Real Estate Title insurance
Appendices
Appendix B
•Questions in practice exam refined for accuracy
•New fees for licensing exams shown
•Portion failed must be re-taken and passed within 6 months or entire exam must be re-taken.
Appendix C
•Unchanged
Appendix D
•Websites verified and corrected
Appendix E
•Forms required in many transactions: Discussions expanded and clarified.
Appendix F
•History of Changes to Title 17: Table removed.
Answer Keys
•Updated and expanded
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