Maryland Escrow Agreements
Effective October 1, 2019, Maryland Annotated Code Real Property Article Section 10-802 will require that when an escrow agent agrees to hold a purchaser’s deposit(s) or down payment(s) in escrow for a real estate transaction involving the purchase and sale of residentially improved or unimproved, but residentially zoned property, the escrow agent must enter into a written escrow agreement with the purchaser and seller.
The written agreement must contain:
(1) The amount of the trust money and date it was entrusted to the agent
(2) The responsibility of the agent to notify the purchaser and seller of trust money returned due to dishonored funds
(3) The conditions under which the escrow agent may release the trust money
(4) The process to address disputes over the release of the trust money
The law may not be construed to prohibit an escrow agent from transferring trust money to another escrow agent, if the purchaser of the residential real estate for whom the trust money is held, chooses a different escrow agent to hold the funds.
The law does not apply to:
(1) Banks, trust companies, savings and loan associations, savings banks, or credit unions
(2) Registered home builders
(3) Real estate salesperson, associate real estate broker, or real estate broker licensed under the Business Occupations and Professions Article
Accordingly, if the contract provides that Counselors Title, LLC is acting as Escrow Agent, and Escrow Agreement is required.
DC Increase of Transfer and Recordation Taxes for Commercial and Mixed Use Properties to 2.5% each (5% total)
Effective October 1, 2019, DC has approved an increase of transfer and recordation taxes on sales of commercial and mixed-use property valued over $2 million ONLY from the current 2.9% (1.45% Transfer Tax and 1.45% Recordation Tax) to a total of 5% (2.5% Transfer Tax and 2.5% Recordation Tax)
Therefore, as of October 1, 2019, for sales of commercial and mixed-use property valued over $2 million, each party will pay a tax of 2.5% of the purchase price or fair market value of the property at closing.
For transfers of commercial and mixed-use property valued over $400,000 and up to $2 million, deed transfer (1.45%) and recordation (1.45%) taxes in Washington will continue to total 2.9% of the purchase price or fair market value of the property.
For transfers of commercial and mixed-use property valued less than $400,000, deed transfer (1.1%) and recordation (1.1%) taxes in Washington will continue to total 2.2% of the purchase price or fair market value of the property.
Total Transfer and recordation taxes are customarily split equally between the buyer and seller.
There has been no change to the transfer and recordation tax rates for residential (Class 1) property.