What is the status of ground rents in Maryland now? The Court in Muskin v. State Department of Assessment and Taxation recently overturned a key part of the law which extinguished unregistered ground rents. Under the Ground Rent Act of 2007, ground rent leaseholders were given three years to register ground rents with the State Department of Assessments and Taxation (SDAT) or the ground rent would be subject to being extinguished by statute. Of course there was a challenge to this law. The recent ruling by the Court said this extinguishment by statute was an unconstitutional taking of property. What does this ruling mean for realtors, lenders, and title companies? Any Certificate of Extinguishment issued by the SDAT is void and has no effect. The ruling did leave the requirement to register ground rents in tact, but unfortunately there is no penalty for failing to do so. This means that realtors must be careful to make sure and clarify at the time of listing of a property if the property is really the subject of a ground rent. It also means that lenders and title companies will continue to require proof of ground rent payment and many times require escrows for ground rents. You may visit the SDAT website at the link to follow for more information about ground rent registration or redemption: http://www.dat.state.md.us/sdatweb/Register_groundrent.html. Please feel free to contact any of the attorneys at Lakeside Title Company when you have questions about ground rents. We are happy to try to assist you. #410-992-1070
Lakeside Title
January 17th, 2012
Lakeside Title
December 15th, 2011
ASK THE EXPERT- Enhanced vs. Basic Title Insurance
I am purchasing a new home and don’t understand why I would want to pay extra for enhanced title insurance? Can you help explain?
Yes, the answer is simple. The “enhanced” policy (also referred to as “gold”, “eagle”, and “advantage”) offers essential additional coverage not found in a standard owner’s policy. The enhanced policy (ALTA Homeowner’s Policy) includes additional coverage for an improved residential property including some post -settlement/post-policy events.
To highlight a few:
-Someone claiming rights to your property arising from forgery or impersonation even post policy.
-Policy will insure you forever during your ownership and also insures anyone who inherits your property upon death and the trustee of a trust to whom you transfer title after policy issued.
-Includes built in inflation protection—the policy amount will increase by ten percent each year for the first five years up to 150% of the original policy amount.
-Protects owner from loss due to encroachments of their building structure (other than boundary walls and fences) over property lines and against loss due to encroachments of neighbors’ building structure (other than boundary walls or fences) built post-policy and without your consent.
These are just a few examples of enhanced coverage; for a more comprehensive list please see (link) to our website “What does title insurance cover? Basic vs. Enhanced Compare the Coverage”.
Please note, the usual and customary title search will be conducted; accordingly, an adverse matter discovered may be noted on title commitment and included in final title policy as an exception. I encourage purchasers to review and ask questions regarding their proposed title policy. The underwriting attorneys and marketing representatives at Lakeside Title Company are always willing to answer your questions.
Lakeside Title
November 30th, 2011
ASK THE EXPERT- GROUND RENTS
Does a title company still have to collect or escrow for ground rents because I was told that Maryland extinguished ground rents?
The Court of Appeals of Maryland recently reviewed the on-line Registry of Ground Leases system and ruled the failure to register a ground rent with the Maryland Department of Assessments & Taxation (SDAT) prior to September 30, 2010 will not result in the extinguishment of an owner’s ground rent interest. Therefore, if a leasehold property is being transferred, settlement companies will continue to locate the holder of ground rent even if the ground rent holder failed to register with SDAT. In the cases where the title company is unable to identify and locate the holder of a ground rent, closing agent will collect escrow funds from the Seller in an amount equivalent to three years ground rent plus $500.
Please note, the Maryland on-line Registry of Ground Leases still serves as a great resource to indentify and locate an owner of a ground rent. One can inquire by conducting a Real Property Data Search on SDAT and clicking on the “Ground Rent Registration” tab. A ground rent tenant still has the right under Maryland statute to redeem his or her ground rent in order to obtain fee simple title.
Please do not hesitate to call one of the attorneys at Lakeside Title Company if you have specific questions as it pertains to your settlement.
Lakeside Title
July 20th, 2011
Lakeside Title
July 15th, 2011
Scam Alert ***
Lakeside Title Co. and Deardorff & Moon, LLC want to notify all of our clients and partners of a recent up tick of fraud relating to “potential purchasers” sending cashier’s checks to third party title companies or attorneys. The scam starts with an email to an agent expressing interest in a listing; and also requesting a recommendation for an attorney to hold the deposit. The “Interested Buyer” only communicates via email, is located out of the country usually, intends to pay cash, and is not available by telephone during normal business hours. The goal of the scam is to deposit the entire purchase price (fraudulent cashier’s check) with third party, cancel contract, then request funds to be wired back. Below are some links to which provide sufficient proof this common scenario is most likely a scam. We recommend that agents do a simple online GOOGLE on their prospective buyers so they can verify they are working with legitimate clients. Also provided is a link to report this fraud to the FBI.
http://www.sarasotahomesforsalenow.com/sarasota-real-estate-scam/
You will see that the scam was reported by a general counsel for a Remax in the NW region and all of these sites report similar scams :
http://www.trulia.com/profile/paulettejonesrealtor/qanda/ , https://point2.zendesk.com/entries/218728-real-estate-scam-using-pt-2-to-find-agents , http://activerain.com/blogsview/1930492/scammers-or-legitimate-buyers- and at http://activerain.com/blogsview/1770880/scam-to-buy-expensive-home-from-masaaski-sasamoto
Lakeside Title
June 9th, 2011
FTC Issues Rules Affecting Short Sale Practitioners
The Federal Trade Commission (FTC) recently issued new rules that may impact real estate practitioners representing short sale clients involved in short sale transactions. Depending on certain factors, the Mortgage Assistance Relief Services (MARS) rules could require disclosures to consumers when negotiating a short sale with a lender or advertising short sales experience. The rules were issued to protect homeowners from mortgage relief scams that continue to spring up during the mortgage crisis. The most significant rule under the FTC’s new rule is the advance fee ban. Under this provision, mortgage relief companies may not collect ANY fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies must also remind the consumer of their right to reject the offer without any charge.
Attorneys are generally exempt from the FTC rule if they meet three conditions: 1) they are engaged in the practice of law, 2) they are licensed in the state where the consumer or dwelling is located, and 3) they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorney must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations governing such accounts.
The attorneys at Deardorff & Moon, LLC, the law firm supporting Lakeside Title Company, never charge any upfront fees when negotiating short sales and the initial 30 minute consultation is also free of charge. To schedule a free 30 minute consultation with one of the Deardorff & Moon, LLC attorneys, please call 410-992-1070 and ask for Sarah Couey or Jamie Bauguess who are both responsible for scheduling the free consultations.
Lakeside Title
June 3rd, 2011
Lakeside Title Company in the Community…
Lakeside Title Company in the Community….Lakeside continues to support non-profits in the community. Meg Moon, staff attorney overseeing commercial accounts, will be participating as a bowler in the Fifth Annual HOPE BOWL to benefit the Domestic Violence Center. The event is on June 18, 2011, 7-9 at Brunswick Columbia Lanes. For more information , check the bowl section at dvcenter.org.
Lakeside Title
May 24th, 2011
Maryland Emergency Mortgage Assistance Program (EMA)
Information provided by Vickie Gipson, Esquire – the director St. Ambrose Housing Aid Center.
I am actively engaged in getting the word out about Maryland’s Emergency Mortgage Assistance (EMA) Program. This program is designed to meet the needs of homeowners facing foreclosure due to involuntary unemployment, underemployment or who have experienced a loss of income due to medical condition. A homeowner may receive up to $50,000.00 in either arrearage or forward payments or both. The borrower must be at least 3 months behind and less than 12 months in the arrears. The arrears will be paid and going forward payments toward the mortgage can last for up to two years not to exceed $50,000.00. The borrower’s income must fall within 120% of HUD Area Median Income FY 2010 Limits and the only real estate that they can own is their principal residence. The loan is interest free and, if certain conditions are met (i.e., the borrower resumes making the full mortgage payments), the loan will be extinguished by the end of the fifth year that the borrower resumes making his or her full and timely mortgage payments. Please share this information with your client’s as it is a quick way to save their properties from foreclosure. As a prime partner for this program we are accepting applications for submission to DHCD. This program, at least at our agency, has not had the overwhelming response that we had anticipated. The good news for your clients is that funding is still available. The bad news is that this is still time sensitive and time limited program. For those of you affiliated with groups interested in learning more about the program, I am available to come meet with your organization. Please let me know how we can work together to get the word out about this fantastic program. Please feel free to contact me at the numbers below or have your clients contact our EMA HOTLINE to apply for this program 410-366-6091.
Lakeside Title
May 24th, 2011
Vote For the Baby Eaglets
This heartwarming story is shared by Sharon Femrite in Lakeside Title’s Post Closing Department
In 2003, two American bald eagles set up residency at the Norfolk Botanical Gardens in Norfolk, Virginia. These eagles quickly became celebrities. An eagle cam caught all the action at the nest. (http://www.wvec.com/marketplace/microsite-content/eagle-cam.html) Moderators volunteered their time to answer questions and thousands of people from around the world followed every event. The first of three eggs was laid Feb. 3. Mom and Dad were the best. Fifteen eaglets and several clutches of three. Dad is the primary supplier of food for baby eaglets but on the morning of April 26, Mom had joined in the search and with a fish clutched in her talons, she and Dad were returning to the nest and she collided with an airplane and was killed. It was quickly determined that the three eaglets would probably not survive with only one parent to care for them. The three eaglets were taken from the nest and transported to the Wildlife Center of Virginia in Waynesboro, Virginia. This is a NON-profit rehabilitation center. They care for over 2,000 animals a year. WCV, within days, had a nest built, a cam for the thousands of grieving viewers and the moderators were back with their continuing support. With this background, here is what I am asking you to do: GO TO YOUR FACEBOOK PAGE AND VOTE – Chase Community Giving has established a fund for non-profit groups and they determine who they will give money to based upon viewer voting. Several weeks ago the preliminary voting was done and WCV received $25,000. Now the jackpot is $500,000!!!! TO VOTE Go to Facebook and LIKE the Chase Community Giving page, www.facebook.com/ChaseCommunityGiving go to “find Charities” click on Wildlife Center of Virginia and hit vote. Voting is between May 19 to May 25.
In the late 1960’s there were 32 breeding pairs of bald eagles in Virginia. Today, there are nearly 700 pairs. The WCV is doing everything possible to make sure these three eaglets will be released to the wild in August. With your vote, you can help a wonderful organization continue and improve their contribution to our world. If you know of someone else who can cast a vote for the Wildlife Center of Virginia, please forward this e-mail on to them. Many, many thanks, Sharon
Lakeside Title
May 23rd, 2011
Are IDOTS taxable?
An IDOT (Indemnity Deed of Trust) is granted by someone other than the borrower (usually a Guarantor) who is not primarily liable on the Note but granted to secure the Grantors collateral interest and secondary liability. Borrowers and lenders in Maryland have long been using IDOTs as a means of securing a loan with real estate without payment of recordation taxes. The Maryland code provides an exemption from the tax based on the theory that the Grantor/Guarantor has not incurred a debt at time of recording of instrument; rather the debt is contingent and may or may not become due. Are IDOTs still exempt? The answer: YES, if properly drafted. There still exists an exemption under the Tax Property Article; however, the clerks are carefully examining commercial transactions and reviewing the language in the loan documents including the IDOT, guaranty, settlement sheet, and loan agreements. It is not enough to have the instrument titled “Indemnity Deed of Trust” or “Guaranty Mortgage/Deed of Trust”. If the documents are worded in a way which obligates the Grantor under the Note, the instrument will not qualify for tax deferral and the clerk will impose recordation taxes at time of recording. The distinction between a qualifying IDOT and one that does not qualify may be subtle, and we are carefully looking at our commercial transactions prior to settlement to best advise our clients. We will continue to pass on any new information from the clerks or the Office of Attorney General which may impact you or your clients.
Meg Moon, Esquire
Lakeside Title Company
Affiliated Law Firm- Deardorff & Moon, LLC.
