Gimer Law

MD and DC real estate law

General

Deed project costs

When you request an estimate from us for a deed project, we typically send it as 2 options — 1) “Deed prep only” — a flat fee to prepare the deed, and 2) “Full service” — the total cost of the deed PLUS recording fees PLUS any applicable transfer and recordation taxes PLUS processing the recording. You would be surprised at all that goes into even the simplest of title/deed changes. Full service covers everything.

Our estimates typically look like this:

Deed prep only: $x — We prepare the deed and send to the client electronically. No additional services are provided.

Full service: $y — We prepare the deed, we prepare supporting documents as needed, we prepare the land intake sheet and assemble the recording package, and then we handle all aspects of the recording process and payment, often through the SimpliFile online platform.

Below is an overview of the main issues we address in a deed prep project.

Identifying the property

The first step is to confirm the property information and find and pull most the recent recorded deed to the property. If the property was transferred within the past few decades and that deed includes the full property interest, this step is fairly easy as it just involves a quick search of the tax and local land records. However, if the latest deed relates to only a portion of the property (a percentage interest less than 100% or a single parcel out of several the client wishes to transfer) then the most recent deed would not suffice… more title research would be required.

Confirming the current owners

Once we identify the property, we then need to ascertain who is/are the current owners of the property. This requires us to determine the current status of all of the owners of record. Is everyone named still living? Are there heirs or successors to deal with? And so on.

Let’s look at this aspect of the process through a hypothetical. Imagine that a married couple takes title to a property as tenants by the entirety. The husband then dies. His death and this particular tenancy election results in the surviving spouse becoming the 100% owner of the property. This surviving tenant scenario is fairly common in title chains.

But with the same hypothetical property let’s say rather than a married couple it is two (2) siblings that take title to the property as tenants in common. Due to that tenancy election, we will end up with a completely different result when one owner passes away. Upon the death of one sibling, that interest would pass to the decedent’s heirs. However, in both MD and DC such a transfer does not happen automatically but rather through the probate process. The death leaves 50% owned by the surviving sibling and 50% owned by the estate of the deceased sibling. A Personal Representative would need to be appointed by the probate court to sign a deed for that 50% interest.

Dealing with transfer taxes

Another factor in the cost analysis would be the identification and satisfaction of applicable transfer and recordation tax exemptions. In Maryland there are 3 types of deed taxes/stamps and in DC there are 2.. If you are claiming an exemption from any of the taxes, the deed and paperwork submitted with the recording need to cite to the correct State/County/City code and you may need to document proof of the exemption via notarized affidavits, copies of fully executed supporting documents, etc.

Calculating the full cost of the deed recording

If we are retained to take care of a deed preparation project as a “full-service” endeavor, we handle the recording of the deed, including the calculation and submission to the clerk of all funds needed to accomplish the transfer. Many intra-family transfers involve the full or partial application of exemptions. So while a transfer may be exempt from state transfer and/or state recordation taxes, it may not be exempt from county transfer taxes OR it may be partially exempt from some or all. We do all the math and confirm figures with the clerk prior to submission.

A note about ground rent redemption deeds

Ground rent redemption deeds require both chains of title (leasehold and fee) to be researched. What occurs in the redemption process is that the leasehold and fee interests are merged together as one and the ground rent is forever extinguished. Tracking down the original ground lease can significantly increase the work required to do this. You may need to search back to the mid-1800s to find that lease and that can involve deciphering old, handwritten instruments. We cannot adequately estimate a ground rent redemption request until completing at least a preliminary review of both chains of title. And if a ground rent is not registered, redemption may not even be possible by deed… the SDAT redemption process could be the only route. That can take upwards of 1 year.

Deed preparation only projects

A good estimate for a “deed preparation only” project is $175-350. That’s just 30-60 minutes of attorney time. Call around and you’ll find that to be very reasonable. With a “deed prep only” project, the client would be responsible for preparing and processing the recording… which at a minimum requires completing a land intake sheet and dealing with the clerk. Most clients elect “full-service” when they discover how much work the recording process entails.

Surveys: an overview

As a buyer you may not be required to obtain a survey. However, if you decline a survey, the owners title insurance policy issued to you will exclude coverage for any matters which would have been disclosed by a survey. In that case you would not have title insurance (or legal defense) to respond to a boundary dispute, encroachment, or other survey-related problem.

Choices

For most residential property purchases, the buyer must choose whether to obtain (1) a location drawing, (2) a boundary survey, or (3) neither.

With commercial properties, upgrading to an ALTA/ACSM survey is the most common way to protect the significant investment that a commercial purchase often represents.

Differences between these survey types are outlined below.

Survey Types

Location Drawings

A location drawing is a quick and inexpensive survey of the property and the most common type of survey conducted in connection with residential property resales. This drawing locates the property lines and all improvements on the lot. A location drawing is the minimum required to satisfy the needs of the lender and title company to remove the survey exception; however, it does not establish the actual, true property lines or corners of the property, and it cannot be relied upon for construction. The cost of a location drawing is $200+, depending upon the size and complexity of the land.

Boundary Surveys

A boundary survey takes longer and is more expensive than a location drawing. Boundary surveys locate the actual, true property lines and corners or the property, as well as the location of any building setback lines or easements for utilities, driveways, sidewalks, etc.. The property corners are marked by the surveyor. A boundary survey can be relied upon to accurately erect fences or other improvements on your property. The cost for a boundary survey is $1500+.

If you plan to make any improvements to your property (such as a garage, fence, addition, etc.) it would be a good idea to order a boundary survey.

Boundary surveys are not nearly as comprehensive as ALTA/ACSM surveys.

ALTA/ACSM Surveys

ALTA/ACSM surveys are the standard for commercial property purchases. ALTA/ACSM surveys meet the highest standards recognized throughout the industry and they provide information including property boundaries; easement and encumbrances; encroachments; evidence of use by other parties; names of neighboring property owners; land improvements; roads and property features; access and legal routes to the property; zoning classification; flood zone classification; water boundaries; existence of cemeteries; legal property description.

The cost of an ALTA survey starts in the thousands of dollars. If you need an ALTA/ACSM, we can obtain quotes for you, but you will need to contract with the vendor directly and a deposit will likely be required.

Timing

A location drawing can be completed in under a week; a boundary survey will take a longer; and an ATLA can take considerable time. Actual time to complete any survey will vary depending on the complexity of the property as well as market demand.

How COVID changed real estate settlements

Nothing’s changed, right? Wrong.

Real estate settlements used to involve the gathering of buyers, sellers, real estate agents and sometimes even lender representatives in a large conference room. This would be either at the offices of the title company or one of the agents. Parties would sit on opposite sides of the table. Coffees would be poured and snacks circulated. Sellers would sign the deed and various affidavits. Buyers would sign loan documents. Once everything was signed, sellers would deliver keys. Then everyone would wait for copies of their paperwork, take their sales proceeds or commission checks, shake hands and depart. Settlement used to be an event, a celebration to remember. That all changed with COVID.

Here is the new normal: Buyers and sellers never meet one another in person throughout the entire transaction. All communication is through their agents (if represented) or via email with the title company as intermediary. Agents confirm commissions electronically prior to closing. Lenders send instructions via email and funds via wire. The parties are definitely not meeting up on settlement day… they close separately. Once the buyer signs (remotely, or alone in the title company office) and sends the title company any additional funds due by wire transfer, the seller is then contacted to finish the closing process. The seller signs (again, remotely, or alone in the title company office) and the deal is closed. Commissions, sales proceeds and other payments are made by wire or checks are sent out via overnight courier. Copies of fully executed documents are then delivered by secure email. Rather than settlement being an event, it’s now just about getting the deal finished as safely and as conveniently as possible for the parties. It’s hard to celebrate alone!

Even though COVID fear seems to have decreased considerably of late, things are not going back to “normal” anytime soon (if ever). COVID certainly has left its mark on this industry.