Maryland Easements and Rights of Way

What are the Maryland laws that apply to roads, trails, paths and rights of way? This is the law of easements: a right held by one person to use land owned by another. There can be “private” roads, shared driveways, paper roads and community alleys – the use of these can be based on long use, or plats and deeds – each circumstance is unique. How do we know if we can use a right of way if we don’t actually own it? What if a neighbor tries to block a path we believe we can use?

Public roads are a clear example – we all know we can use them, but who actually owns them? Where does the right to use them come from? It seems clear enough when we merge onto Route 50 through Annapolis; but what about a road that eventually reduces itself down to a path to the water’s edge?

I recently had a case that went all the way to Maryland’s Supreme Court which looked at a stretch of property that showed as a road on a State Highway Administration plat, but which had not been used for vehicle traffic in living memory. Neighbors took steps to block my clients’ access; the County passed a law to close it as a road, leaving my clients’ substantial waterfront parcel effectively landlocked from the road system. We sued and eventually succeeded in proving that there was a road as shown on the plat, even though there was no pavement or tire tracks or other hallmarks of a road in the real world.

The neighbors that owned property surrounding the strip argued that if the road ever existed, it was washed away by erosion, or lost to adverse possession, or was abandoned. My clients were steadfast that it remained a road, because it was created as a road by the filing of a plat by the State Highway Administration, and accepted as such by the County.

The Supreme Court determined that the deed to the State Highway Administration delivered ownership of the land (the “fee title”) – ““all the land, together with the appurtenances thereto belonging, or in any wise appertaining, lying between the lines designated ‘right of way line’ as shown and/or indicated on the aforesaid plat.” A public road was created when the then owner offered the property for use as a road, and the State Highway Administration accepted it for use as a road – thus finding offer and acceptance and thereby dedication as a road. Once it was a public road, people (including my clients) could use it for ingress and egress until such a time as it was officially closed by the County.

With the decision, the case now goes back to the County Circuit Court for trial on inverse condemnation. Inverse condemnation arises when a government takes action which is the equivalent of taking property by eminent domain. We will show that, by closing the road, the County has reduced the value of the parcel and caused damages to its owners.

Dirk Schwenk is a Maryland Real Estate, Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in real estate issues, contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

Contribution and Profit: Farms and Rural Land

Contribution and Profit: Farms and Rural Land

For farm properties owned by more than one person, a common dispute is who is responsible for expenses and who is entitled to profits.  With family farms, it is common that one member of the family is primarily responsible for working the farm, while others may own but have moved away for other employment.  If profit is made on the harvest, who is entitled to a share? If expenses are incurred for equipment, who must pay the expense? If there is not agreement about the answer, litigation may be needed to sort out issues of contribution and profit.  

Disputes most often arise where there are joint tenants or tenants in common.  This often arises where a farm is passed down through more than one generation without a will.  The basic law is that if there is not a will, the property is passed intestate under statute. In such a case, the property goes to the spouse (50%) and any surviving children (50% total).   If there are no children, then the spouse and parents of the person that died, or to siblings if there are no children. If there are no living relatives, the property goes to the state.

So what happens if the uncle takes over the farm but the grandchildren receive a 1/16th interest?  This can cause resentment if the grandchildren think the uncle is “getting rich” on “their” farm. Or if the uncle is “losing money” paying to maintain the farm and the grandchildren think they should be receiving income.  

This is where two issues dealing with joint tenants or tenants in common come in to play.  The Uncle is entitled to contribution from the other owners for expenses for the betterment of the property such as buildings, fences, repairs, etc.  The other owners are entitled to a portion of profit if the farm makes money.  

If a dispute breaks out, it is common for the tenant in possession to seek partition and also contribution for the expenses he/she has put out to make the property economically viable.  The other owners may counterclaim for profit and seek a portion of the income from the farm.  This dispute can be resolved in the context of a suit for partition (https://baylawllc.com/partition-actions-farms-rural-land/).

Bottom line: if a working farm property is owned by more than one party, eventually there will be a dispute about investments to the property or profits from the property.  Be prepared.

Dirk Schwenk is a Maryland Real Estate, Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in real estate issues, contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

Partition Actions: Farms and Rural Land

Partition Actions: Farms and Rural Land

“My grandparents had a farm.  They died without a will and had four children.  I was the youngest, and two of my siblings died with children and without a will.  What do I do?” This is how a new client talk starts when the subject is partition actions about a farm in Maryland.  With rural properties, family farms are passed down generations without legal planning, leaving the next generation to unwind ownership without the benefit of proper probate.  It is easy to have dozens of heirs after two generations, with some working the property day to day, and some so not even be known if they are still alive.  Usually, this means a partition action is necessary.

When ownership is split, two bad things happen.  First, no one feels responsible to pay the taxes on the property, and it is lost to tax sale and foreclosure.  Second, one person in the family sells their interest to a determined (and perhaps unscrupulous) investor, and that person uses their purchase to steamroll everyone else.  White and Brown Animals Near Fence

For me (Dirk Schwenk), it is always a thrill to represent a member of a farm family in reuniting the farm property, or at least locking down a part of the farm for themselves and future generations.   How is this done? A combination of negotiation and use of the partition process to compel owners to make difficult decisions. I previously wrote about partition of property in this article: https://baylawllc.com/maryland-partition-actions/.  

Maryland law provides that one owner of a property can compel other owners to either split the property up, or to sell the property instead of dividing it.  Most rural and farm properties can be divided in a way that is fair to the parties. Under the law, “A circuit court may decree a partition of any property….  If it appears that the property cannot be divided without loss or injury to the parties interested, the court may decree its sale and divide the money” § 14-107.  

Resolution

In partition, a Court divides the property (or the receipts of the sale) according to the interests of the parties.  For large families with several generations, one owner to have a 50% interest, while everyone else has a small fraction.  This creates possibilities for resolution. A suit for partition will bring everyone to the table, and smaller interests may find it beneficial to be bought out instead of fighting for a small part of the whole.  Alternatively, if there is a space for small lots to be carved out, those lots may be exchanged for resolution of ownership on the main farm property. Either result is better than questionable ownership with the possibility of a claim for profits or contribution.

Bottom line: someone has to take control of a farm property under split ownership.  If it isn’t a member of the family, it may be the State (after tax sale) or an outsider that purchased a minority interest.  The party that gets organized, knows their rights, and takes action will be the most likely to succeed.

Dirk Schwenk is a Maryland Real Estate and Property Lawyer from Annapolis, Maryland.  He provides civil litigation in real estate issues, contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

 

 

 

 

Marina Purchase and Sale

pexels-photo-2There are many marinas in Maryland, ranging from large commercial ones the size of small towns to “informal” (or illegal) ones with a few slips and a ramp.  The purchase or sale of a marina property has all of the financial elements of a regular commercial property, but with highly specialized business, riparian rights, zoning, and environmental concerns.  There are many risks to purchasers, and they pose very interesting questions for the real estate lawyer that knows about waterfront and marine businesses.

I was recently hired by a cash buyer to review a potential marina purchase in Baltimore County.  Intellectually, this was an exciting opportunity, since it meant that it was up to me to do the due diligence that is often handled by the lending bank, and it gave me the freedom (and responsibility) to know all aspects of the deal.  Here are some of the things that I looked at.

Purchase/Sale Contract: No matter how familiar one might be with a property, the devil isn’t in the details – ITS THE DETAILS IN THE PAPERS.  If a judge has to later review and enforce a contract for purchase or sale of a marina, that judge is going to read the words on the page.  They may never even see the piers, slips, office or workshop.  The only thing that matters is whether you received what the paper says that you are due.  There are lots of attorneys that can read a purchase contract for a commercial property – there are a lot less than can determine whether the contract adequately describes the property and business that comprises a working marina.

Zoning and Development Restrictions: This property was in a very specialized and highly restrictive zoning category, and some face to face discussions with the zoning office revealed that prior sales had fallen through because the property had been considered as having the ability to convert to residential condominiums, when that was not possible under current zoning.  These restrictions limited the upside potential of the property significantly.

Piers and Riparian Rights: The possibility of expansion of the existing marina was an intriguing aspect of the purchase.  Careful review, however, revealed that the marina was already built out to the maximum side-lot restrictions and out to the harbor line, which prevented further expansion.  The slips could potentially be reconfigured, but expansion was not possible.

Lease Agreements and Tenant Relations: The seller provided all of the lease agreements with current tenants for review.  These were professionally done, transferable, and enforceable, but during the course of the review it came to light that one of the tenants was unlikely to continue at the expiration of the lease in a few months.  Even more concerning, the largest tenant (who made up nearly half the revenue) appeared to be teetering on the edge of default, and had recently requested that the rent be renegotiated.

Environmental Review and Survey: With marinas, it is crucially important to be sure that there are no significant environmental concerns — especially buried or leaking hazardous materials.  Also key is the question of whether there are easements across the property or other issues that might materially limit the access to and control of the waterfront.  With this property, those reviews did not reveal any issues.

Revenue and Business Concerns: The seller in this instance was a well established commercial business with a known history and other similar properties.  There were no concerns about its ability to deliver good title or to demonstrate that it had the authority to sell the property.  The business concerns in this case were with the revenues generated by the property and whether they supported the investment.  Secondarily, whether there might be future appreciation (or depreciation) with the property or upside from redevelopment.  In this case, current revenues were good, but deviated from historical norms, and were also highly dependent on the largest tenant, who did not look sustainable.  We ran numbers for return on investment based on historical norms and accounting for the possible loss of tenants — these made the property look riskier than it had initially appeared based on revenues.  The difficulty redeveloping the site, in light of the restrictive zoning in place, also limited upside potential and future appreciation.

J. Dirk Schwenk is a Maryland lawyer in Real Estate law, Waterfront Property, Civil Litigation and Maritime Law from Annapolis, Maryland.  He graduated cum laude (with honors) from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

Contract Law 101 – Maryland Contracts

Back to Basics – Contracts 101.

(Originally published in the Mid Atlantic Mariners Club Newsletter, 2010).

The first rule of contract: capture the intent of the parties.

In every profession, not just the law, we are faced with making, interpreting and abiding by contacts.  Sometimes these contracts are long and impossible to understand (mortgage refinancings, consumer warranties) sometimes they are so fleeting that one hardly notices (“I’ll pick up lunch”).  In law school, we learn that a contract consists of an enforceable promise.  It’s a promise that one can take to court, and the court can make the other comply or award damages for their failure to do so.  All contracts, though, include a major element of hope and trust and if that trust is broken, bad things happen, and the threat of a court’s intervention may not be enough to save the deal.

When a client comes to me about a contract, it is usually one of three things — reviewing a contract that someone else has prepared; papering an understanding where the framework is already in place; or protecting a client from the risks of a particular kind of deal.  The most frequent contracts for me are boat and ship purchase contracts — these often involve a significant outlay of funds before the product is near completion, and therefore require both trust and legal protections.  With all projects, I generally start with the same three questions.  What are you trying to accomplish?  What has already been agreed to?  How much do you know and trust the other party?

 When it comes to reviewing a contract that someone else has prepared for my clients’ signature, I focus on two things.  First, does it capture the items that my client thinks are being agreed to?  Many times I am given a form contract such as a boat brokerage agreement, and the parts of the deal that are most important to my client (the time of delivery and the promises that the boat will be fully commissioned to spec) are nowhere to be found.  Usually this can be handled with an addendum that sets out the specifics (Boat to be delivered to Maryland on date certain at the seller’s risk and expense), but sometimes the brokerage contracts simply will not do the trick.  Lawyers often joke about the boat brokerage and real estate contracts — they do a great job protecting the brokers or agents, but beyond that, its usually a lot of words that don’t say too much.

 My favorite project is when a client comes to me and says … “I agreed to _____ with ______ – can you write a contract for that?”  I like this kind of project (not just for the irony of the fact that there may already be an oral contract) because it usually allows me to work from the ground up, as opposed to slogging through pages of 8 point font prepared by someone else.  I get to start with “what exactly has been agreed to?”  Typically a clients’ answer to that question feels like the tip of the iceberg … “we agreed that I would sell his product for a 10% commission.”  This leaves open all sorts of lawyer-fun — how much do you have to sell; can you sell competitor’s products, too; can they hire other brokers or salespeople; where will suit take place; what happens upon termination?  And what happens if there is no agreement on all of the side issues?  I love that question.

 The Second Rule of Contract: be reasonable.

Assuming that there is enough of a contract to be a contract (generally that it is known what is being agreed to, including when it is to be done and how much it is going to cost) everything else may be an open term.  In some areas of the law, like partnerships, employment and state insurance contracts, there is a whole body of statutes that fills in the blanks.  In those areas people may “agree” to many things that they never even thought of.  If there are not default terms, then the agreement reverts to the rules of reasonableness.  These rules are essentially human instincts — most people will agree most of the time about certain things even if they have never considered them before.  If the contract is to buy a certain thing (say a house), then it is only for that particular thing, not something else.  If it is for something that is largely interchangeable (like a Blackberry), then it may not mean a specific thing, just a thing like it.  You can usually do well in contracts by staying polite and acting reasonably, but sometimes that is mighty hard.

 The rest of contracts is just simple interpretation — if the words on the paper say to do X, and X isn’t illegal or completely unreasonable, then that is what you do.  Words are notoriously tricky things, though, so one must write with care and make sure that everyone abides by at least the most important terms over time.  There are a few contracts (marine insurance, for example) where certain words and phrases have such a history behind them that their meaning is known with some certainty.  But for most contracts, even ones that have been used many times, no court has ever interpreted the key language, and everyone is operating on   hope that the words mean what they think they mean.  This is the real difficulty with “form” contracts — people trust it because its The Form, but who knows whether it captures the agreement that was really intended.

 What can you take away from all of this?  First and foremost, be sure that the contracts you enter into actually capture what is being agreed to — this can be trickier than you think.  Second, sometimes the simplest contracts are the best ones — agree to the key items, and otherwise act reasonably.  Third, there are times when a very thorough papering is necessary — like when a major asset like a house or a business is on the line.  In those cases, have clear goals and good representation that is looking out for your specific interests.

J. Dirk Schwenk is a Maryland real estate and civil litigation lawyer.  He graduated cum laude from the University of Maryland School of Law in 1997 and has been in private practice ever since.

Maryland Partition Actions

Dividing Real Estate in Maryland by Partition

What do you do if you own a piece of real property with someone else, but you can’t stand them anymore?  Or you need to sell the property, but they want to keep it?  In law, this implicates the doctrine known as “partition.”  In a partition action, one owner of a property files suit against another and asks that the property be divided up or sold and the money split.  It is similar to what happens in a divorce, but the owners aren’t married.  Typical examples: two brothers are made joint owners in their Grandparents will.  One brother uses the property, the other would like to sell it and use the money to work on his own house.  Also typical two people are in love and buy a house together; their love cools and one moves out.  The person that moves out wants to get her money out of the house; the one that stayed is happy with the status quo.  What to do?  File a partition action and ask the court to either divide up the land (perfect if there are two similar lots) or order the land to be sold and money split (necessary if there is one house on the property and it cannot be split in half).

UPDATE.  The Maryland legislature passed new law in October 2022 which allows an owner to elect to have a property sold by a real estate agent under the direction of the Court.  This new law – known as Partition by Sale – can potentially save an owner a great deal of money by simplifying the process and removing the value stigma of a judicial sale. The owner has to be prepared to be bought out a fair market price, however, if the other owner elects to do so.   

The right to a partition is set out in the Real Property Article of the Maryland Code.  It says:

“Decree of partition (a) A circuit court may decree a partition of any property, either legal or equitable, on the bill or petition of any joint tenant, tenant in common, parcener, or concurrent owner, whether claiming by descent or purchase. If it appears that the property cannot be divided without loss or injury to the parties interested, the court may decree its sale and divide the money resulting from the sale among the parties according to their respective rights. The right to a partition or sale includes the right to a partition or sale of any separate lot or tract of property, and the bill or petition need not pray for a partition of all the lots or tracts.” § 14-107

As the language indicates, if the property cannot be divided without losing value to its owners, then the court should order that it be sold and the proceeds divided.  That is what is known as a sale in lieu of partition.  Such sales are controlled by a section of the Maryland Rules of Civil Procedure that state: “When the relief sought is a sale in lieu of partition, the court shall order a sale only if it determines that the property cannot be divided without loss or injury to the parties interested.”  MD R PROP ACT Rule 12-401.

This is the correct result — if the property can just be split, as with two similar lots that are not improved with buildings — they should be split and the parties can keep or sell them as they see fit.  If the property cannot be split, however, it needs to be sold.

For the owners of the property, however, there are very strong reasons not to actually go through the sale as it would be ordered by the Court.  Under the Rules, the normal procedure is to appoint three commissioners who can establish a value and oversee the sale.  “When the court orders a partition, unless all the parties expressly waive the appointment of commissioners, the court shall appoint not less than three nor more than five disinterested persons to serve as commissioners for the purpose of valuing and dividing the property.”

MD R PROP ACT Rule 12-401.  These commissioners, in turn, can be paid out of the proceeds of the sale.  “Payment of the compensation, fees, and costs of the commissioners may be included in the costs of the action and allocated among the parties as the court may direct.”  MD R PROP ACT Rule 12-401.  If needed, the sale would then proceed to judicial sale –an auction on the courthouse steps.  This means that, if the owners cannot agree to sell it on the open market, it will likely go for a steep discount and then be subject to significant fees to pay the attorneys, commissioners, trustee, and related court costs.

 The bottom line: if you own property and the other side won’t sell, or if someone has sued you to partition a property you own — you will need pragmatic, effective counsel that realizes that all fees and costs will ultimately come out of the value of the clients’ property.

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in real estate issues, contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude from the University of Maryland School of Law in 1997 and has been in private practice in Maryland ever since.

Condominium Units – Damages from Common Elements

Damage to your Unit as the Result of a Defect in the Common Elements: Who is Responsible?

A common problem for condominium unit owners is when their unit is damaged as a result of a defect in a common element of the condominium.  Common elements, as defined by the Maryland Condominium Act (the MCA), are all of the condominium property except the units.  For instance, the lobby area of a condominium and the pipes and wires that run from unit to unit are all common elements.  A common problem that arises is when a defect in the common elements causes damage to your unit.  The question that often comes up is: “who is responsible for paying for that damage?”

The answer, generally, is that the council of unit owners’ property insurance will cover the loss.  However, the council of unit owners – or the Condominium Association – will often refuse to reimburse a unit owner for damage to his or her unit.  Generally, they will hide behind the language in §11-108.1 of the MCA, which states that “each unit owner is responsible for maintenance, repair, and replacement of his unit.”  However, there is an important exception to this rule:  when the damage is caused by a defect in the common elements, the council of unit owners is responsible to cover the loss through its property insurance.  We can reach this conclusion by further examining the text of the MCA.

Section 11-114(a)(1) of the MCA mandates that the council of unit owners maintain property insurance on the common elements and units, insuring against those risks of direct physical loss commonly insured against.  Furthermore, § 11-114(g)(1) of the MCA imposes a duty upon the council of unit owners to promptly repair or replace any portion of the common elements and the units that are damaged or destroyed.  If the council fails to take corrective measures, and a condo owner’s unit is subsequently damaged as a result of the failure to fix the defect, the council of unit owners’ property insurance will cover the loss, and the insurance deductible is a common expense.  Md. Code Ann., Real Prop. § 11-114(g)(ii) (West).

Furthermore, even if the council of unit owners couldn’t have fixed the problem before it caused damage to your unit – e.g. if a pipe bursts and floods your unit – the council of unit owners’ insurance will still cover the loss.  What this means is that the council of unit owners is responsible for reimbursing you if a defect in the common elements causes damage to your unit.

This insurance coverage should also generally apply in situations where your unit is damaged as the result of another unit owner’s negligence.  Section 11-114(g)(iii) of the MCA provides that “[i]f the cause of any damage to or destruction of any portion of the condominium originates from a unit, the owner of the unit where the cause of the damage or destruction originated is responsible for the council of unit owners’ property insurance deductible not to exceed $5,000.”  This seems to mean that the coverage extends to defects not only in the common elements, but also defects in other unit owners’ units that cause damage to your unit.

If your unit has been damaged by some defect in the common elements or as a result of some other unit owner’s negligence, you should not be forced to pay out of pocket for repairing the damage.  If you find yourself in this situation, please contact us and we will be glad to assist you in enforcing your rights as a condominium owner.

 

Lien Sales – The Times Just Changed.

In October, 2014, the Maryland Court of Special Appeals issued a decision concerning Maryland’s lien and recovery business.  Lien and recovery companies are hired by mechanics and marinas to collect overdue charges for repairs and storage on vehicles and boats. At least as long as I have been practicing, lien companies have added a “processing fee” to the amount owed, and required that the boat or vehicle owner pay the processing fee in addition to the overdue charges in order to get their boat or vehicle back.  If the owner didn’t pay up, then the vehicles were put up for auction.  In Allstate Lien and Recovery Corp. v. Stansbury, however, the vehicle owner fought back.  Mr. Stansbury asserted that including a $1000 processing fee in the amount required to redeem the vehicle was an unfair and deceptive practice, and violated Maryland’s laws against unfair debt collection.  The trial court, and now the Court of Special Appeals, agreed that the inclusion of the processing fee was a violation of the Consumer Protection Act and the Consumer Debt Collection Act.

Violations of the Consumer Protection Act and Consumer Debt Collection Act both have significant consequences.  Consumer Protection Act violations are grounds for shifting attorneys’ fees from the consumer to the business — which means that Allstate Lien and Recovery in this case is likely to be responsible for tens of thousands of dollars (even hundreds of thousands) of fees for Mr. Stansbury’s lawyers.  A violation of Consumer Debt Collection allows for “damages of emotional distress and mental anguish suffered with or without accompanying injury.”  This means that a jury is free to award money for distress and upset, even without any kind of physical symptoms, if the debt collector has acted badly.  Since the lien and recovery company is the agent of the mechanic or marina — those businesses may also be on the hook if the lien and recovery company acts badly.

You are warned.  The unlawful $1000 processing fee may be costing Allstate Lien and Recovery (or hopefully their insurer) hundreds of thousands of dollars beyond what they paid their own attorneys to defend the case.

With those warnings, when does a garageman’s lien attach?  Here is the statute:

 

(a)(1) Any person who, with the consent of the owner, has custody of an aircraft and who, at the request of the owner, provides a service to or materials for the aircraft, has a lien on the aircraft for any charge incurred for any:

(i) Inspection, maintenance, repair, servicing, or rebuilding;

(ii) Storage, parking, handling, or tiedown; or

(iii) Parts, accessories, materials, or supplies.

(2) The operator of any airport on which an aircraft lands or which is otherwise used by an aircraft has a lien on the aircraft for any landing fee, flight fee, or other charge so incurred.

(3) A lien is created under this subsection when any charges giving rise to the lien are incurred.

(b)(1) Any person who, with the consent of the owner, has custody of a boat and who, at the request of the owner, provides a service to or materials for the boat, has a lien on the boat for any charge incurred for any:

(i) Repair, rebuilding, maintenance, servicing, or wet or dry wharfage;

(ii) Storage; or

(iii) Parts or accessories.

(2) A lien is created under this subsection when any charges giving rise to the lien are incurred.

(c)(1) Any person who, with the consent of the owner, has custody of a motor vehicle and who, at the request of the owner, provides a service to or materials for the motor vehicle, has a lien on the motor vehicle for any charge incurred for any:

(i) Repair or rebuilding;

(ii) Storage; or

(iii) Tires or other parts or accessories.

(2) A lien is created under this subsection when any charges set out under paragraph (1) of this subsection giving rise to the lien are incurred.

(d)(1) A park owner has a lien against a resident’s mobile home, if the park owner obtains a judgment against the resident under Title 8A, Subtitle 17 of the Real Property Article, and the resident fails to yield and render possession of the premises as ordered by the court.

(2) A lien under this subtitle shall be:

(i) Stayed if the resident files an appeal in accordance with Title 8A, Subtitle 17 of the Real Property Article; and

(ii) Extinguished if the resident redeems the premises in accordance with Title 8A, Subtitle 17 of the Real Property Article.

(3) A lien is created under this subsection when the resident fails to yield and render possession of the premises as ordered by the court.

Md. Code Ann., Com. Law § 16-202 (2014).

If you are owed money for repairs, storage or maintenance, here are the steps you should follow:

  1. retain possession unless and until paid in full;
  2. act promptly to hire a competent lawyer or lien sale company to prepare the statutory notices of lien.
  3. Accept payment in full — don’t add in charges that cannot be substantiated.

Baylaw, LLC can prepare statutory notices for a reasonable flat fee and walk you through the process of getting paid or obtaining title.  Please email Dirk Schwenk dschwenk@baylawllc.com, or Jeff Toppe jtoppe@baylawllc.com for details.

 

Contracts to Purchase or Sell Real Estate

For most people, if they encounter a real estate contract, it will be a prefabricated agreement presented by a real estate agent.  It may seem as if it is a final document, created by experts, and protecting your interests.  To a degree it will, but it is also there to protect the brokers and the other party, and many of its terms can be negotiated.  Remember that brokers and agents are typically paid out of the proceeds of the deal.  This means that they they have a strong incentive to get you to go through with the deal, even if it may not be in your best interest.  If you grow concerned — get a knowledgeable lawyer — the fees will be much cheaper than making a mistake.   This article is broken up into three sections: 1) Basic requirements for a contract; 2) disclosure considerations; and 3) investigation that is worthwhile to do when entering into a real estate contract.

Maryland Real Estate Contracts — basic requirements: 

There are only a few required elements to a real estate contract — most of the rest is filler required by statute and terms that help the brokers to enforce their right to receive a fee (and to protect themselves in the event of future litigation).

1. A writing, signed by the parties, that identifies the property and the basic terms of the contract:

In Maryland, as in most states, there is no enforceable contract to transfer land unless there is at least a written document identifying the property and the nature of the contract and signed by the seller.  The relevant code states no “interest in land may be assigned, granted, or surrendered, unless it is in writing signed by the party assigning, granting, or surrendering it, or his agent lawfully authorized by writing, or by act and operation of law.  Md. Code Ann., Real Prop. § 5-103.

2. Statutory Disclosures

There are a long list of disclosures that are required to be placed in Maryland real estate contracts by statute.  These include everything from the application of the Critical Areas laws, to notices about where deposits are placed by the broker, to sections on the homeowners associations, to land that cannot be used for residential purposes.  (See Maryland Real Property Article Section 14-117).  It should be noted, however, that failure to include those provisions does not render the contract void — it just means that a seller can sued for the failure to disclose, if the failure causes damages.  “Unless specifically provided, a contract for sale is not rendered invalid by the omission of any statement referred to in this section.”

3. A Deed

After a contract is reached, a deed is required to be filed in order to complete the transfer of property.  A deed is a somewhat more technical instrument, but its basic requirements are a sufficiently specific description of the property, identifications of seller and buyer, and it has the seller’s signature, property witnessed.  To be effective against someone else trying to claim ownership, it must be filed and indexed in the land records.

Maryland Real Estate Contracts — Thinking About Your Contract:

Aside from the boilerplate in a contract, there some things you should pay close attention to:

1. Special Disclosures:  As a purchaser, you can request specific disclosures from the seller – here are some you may want to consider:

a. Mold, mildew, flooding.  If there is any one thing that can ruin a house, its water damage, mold and mildew.  You definitely want to carefully look for any sign of water damage, including the kind of painting and repairs that might indicate past damage.  You can — and if there is any doubt you should — specifically request that the sellers disclose in writing any past water damage, mold, mildew or repairs.

b. Past litigation.  If there has been a past case concerning the house, such as against a homeowners association or neighbor, you probably want to know what that case was about.

c. Any unpermitted additions or structures.  If there is anything on the property that was not permitted, you want to know about it before you purchase not after — it can be very difficult to remedy such a situation.

2. Deadlines and Conditions.  If the contract is conditional (say on disclosure of water damage), and that condition is not fulfilled, then be sure to know exactly how and when to rescind the offer.

3. How much is the broker being paid?  If you are a seller, this item is negotiable, and it is a zero sum game.  Any money that your broker gets, is money out of your pocket.

4. “Other”:  Many contracts contain a blank term for special agreements — this often turns out to be the most important term in the deal.  Is there a boat that is supposed to transfer?  Is there a plan to lease the house back to the seller for a period after closing?  These things need to be written down clearly if they are going to be enforceable.

5. Homeowners Associations, Condo Associations and Improvement Associations.  If you are buying property in a subdivision, you definitely want to know what the covenants are and how they are enforced in the community.  This information should be available as part of the mandatory disclosures — READ IT!  You don’t want any surprises.  If it is not given to you, it should be on file in the land records of the County — find it or have your attorney get it for you.

Maryland Real Estate Contracts — Investigation Before Contract

Any contract requires a certain amount of trust with the other party — here are some things that are relatively easy to find, and very important to know:

1. Is the other party going to run to Court?  Most people never end up in trial – they never sue their neighbors – they just go about their business and pay their bills.  Some people are not like that — they always end up suing (or being sued by) the people that they deal with.  If someone makes you an offer on your house (or you make an offer on their house) take a few minutes to find out whether the other party is a repeat litigator — if they are, there had better be a good explanation or the hassle may take away from the joy of the transaction.

2. Are there proper permits?  Go to the planning department in the County where the property is — ask whether there are any issues with the property.  They can help.  You do not want to buy a house based on an addition that will need to be torn down.

3. Is there a bad neighbor?  Few circumstances are worse than buying a house only to find that you live in fear of your neighbor.  Many bad neighbor situations are the result of a dispute about the true boundaries — a survey can help you determine if there any encroachments either way.

4. What is the neighborhood/house/street really like?  Go to the property without the agent.  Walk along the street at night.  Is it what you want?  If not, move on.

Good luck!

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime attorney from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He does real estate law, including preparing and filing deeds.  He graduated cum laude (with honors) from the University of Maryland School of Law and has been in private practice in Maryland ever since.

 

 

 

Real Estate Law, Riparian Rights and the View

Waterfront Property: do you have a right to prevent others from building or planting in the view of the water?

Imagine a waterfront house with a large privacy fence that blocks all view of the water — its a strange image.  If there is no view, the property loses most of its “waterfront” essence and most of its value, so somehow, somewhere, the law must protect a waterfront owner’s view.  But I regularly hear other attorneys and government officials recite the old saw: “there is no right to a view.”  They are wrong in some ways, but they do have good reason to say that.  Maryland law (and the law in most coastal states) is silent about the water view.  Concerning riparian rights, Maryland’s court says:

The term “riparian rights” indicates a bundle of rights that turn on the physical relationship of a body of water to the land abutting it….  This bundle includes at least the following rights: (i) of access to the water; (ii) to build a wharf or pier into the water; (iii) to use the water without transforming it; (iv) to consume the water; (v) to accretions (alluvium); and (vi) to own the subsoil of nonnavigable streams and other “private” waters. To be sure, access to the water is a primary asset of riparian rights.  Gunby v. Olde Severna Park Improvement Ass’n, Inc., 174 Md. App. 189, 239-40, 921 A.2d 292, 322 aff’d, 402 Md. 317, 936 A.2d 365 (2007).

The view wasn’t an issue in the Gunby case, but this is an accurate summary.  Florida law, for example is much different: “Upland owners hold several special or exclusive common law littoral rights: (1) the right to have access to the water; (2) the right to reasonably use the water; (3) the right to accretion and reliction; and (4) the right to the unobstructed view of the water.” Walton Cnty. v. Stop Beach Renourishment, Inc., 998 So. 2d 1102, 1111 (Fla. 2008).

Are Maryland property owners without protection then?  The answer is that the view is protected, but getting to that can be a bit convoluted.  First and foremost, “access to water is a primary asset of riparian rights.”  Most things that obscure the view, such as a fence or wall or, to a lesser degree plantings, also obstruct access and therefore can and should be challenged.   (Need more on potential issues and solutions for waterfront purchases?  Look here.)

A pier typically obscures the view and water access to a lesser degree than a fence — but it seems clear that someone else should not be able to build one in front of a lot owned by someone else.  This brings up the riparian owners’ right “to build a wharf or pier into the water.”  When it comes to someone else other than the owner putting in a pier, this is what I consider a negative right.  If the riparian owner as the affirmative right to build a pier, it follows that they also have the negative right to prevent a non-owner from building a pier.  This right is also captured in the Maryland Code (and most County and City zoning provisions) insofar as it is only the owner that has the right to build a pier in front of waterfront property.  The owner “may make improvements into the water in front of the land to preserve that person’s access to the navigable water …. After an improvement has been constructed, the improvement is the property of the owner of the land to which the improvement is attached.” Md. Code Ann., Envir. § 16-201.

And so, there are ways to protect a riparian owner’s view of the water, even if that right is not specifically laid out in Maryland’s cases or statutes.   If you are not an owner, however, the options to protect a view are drastically more limited — that will need to be a topic for another article.

If you are in a situation where you are concerned about a neighbor infringing on your view — send me an email at dschwenk@baylawllc.com or give me a call at the number to the right.

J. Dirk Schwenk is a Maryland Real Estate, Waterfront Property, Civil Litigation and Maritime Lawyer from Annapolis, Maryland.  He provides civil litigation services in contract disputes, environmental and zoning issues, adverse possession and boundary disputes.  He graduated cum laude (with honors) from the University of Maryland School of Law and has been in private practice in Maryland ever since.