Transferring Real Estate: Deed Overview

In Maryland, the sale or transfer of property includes the creation of a deed, which is a legal document that defines each party’s rights and responsibilities. Deeds establish a binding agreement, but occasionally new information is discovered after the transfer or sale of property that may compromise the owner’s rights to the property.

While it’s possible in many jurisdictions to file your own legal documents, the best way to protect yourself in a real estate transaction is to have a lawyer prepare your deeds. Maryland requires that a deed be prepared by a Maryland attorney to be accepted for recordation in the Maryland Land Records.

Types of Deeds

Three types of deeds apply to real estate transactions in Maryland:

  • General Warranty Deed – This is a deed that sellers provide the buyer that guarantees the property is free of any liens or any other legal claims in its entire history. A General Warranty Deed obligates the seller to cover the costs of any undisclosed claims against the property, should claims arise after sale.
  • Special Warranty Deed – A Special Warranty Deed is similar to a General Warranty Deed, except it does not guarantee that the property is free of any legal claims under previous owners. If, after sale, a previous lien or claim against the property should arise, the buyer would be responsible for resolving those claims.
  • Quitclaim Deed – Unlike warranty deeds, a Quitclaim Deed is not used in buy-sell transactions, but rather to transfer one’s interest in a property. This type of deed is common in divorce, when one spouse surrenders rights to a jointly owned home, and it can be used to transfer ownership of property to a family member. The person filing the Quitclaim Deed does not imply actual ownership, but instead guarantees that any rights he or she may have in the property are surrendered upon execution of the deed.

Steps for Filing

The steps for filing a deed vary, depending on the county in which the property is located. In some counties, you may be required to file a Lien Certificate, which reflects any obligations tied to the property – such as unpaid real estate taxes – and you may be required to resolve those debts before transferring the property.

All Maryland counties require the filing of a Land Instrument Intake Sheet, a document used to determine the amount of transfer and recordation tax. Some property transfers might be tax-exempt, such as the transfer of property as a gift.

Fees for transferring property also vary by county and by the dollar value of the property.

Common Property Transfer Problems

Previously unknown facts may interfere with a person’s ownership of a property. For example, if a buyer purchases at auction a property whose owner died, but that previous owner had an undisclosed heir, that heir could – years later – attempt to take possession of the building.

Before the title to a property is transferred to a new owner, a title search company looks for any existing liens or unpaid tax obligations. Although rare, title searches sometimes miss those debts, and the new owners learn about outstanding liens when lienholders contact them, attempting to collect what they are owed. (In such instances, the title company would be responsible for remedying the problem if a title insurance policy was obtained at the time of transfer.)

Clerical errors, forgery or an illegally executed deed at any point in the history of a property could also lead to problems with the enforceability of a current deed.

Lusk Law, LLC, specializes in assisting business owners and individuals with the transfer of property and other transactions, helping to avoid litigation when possible, and we’re ready to actively represent our clients in court when litigation is necessary. Our experienced attorneys have provided legal counsel and representation to business owners and individuals in real estate transactions in Frederick County, Howard County, Baltimore County, Baltimore City, Carroll County, Washington County, and Anne Arundel County, and other counties in Maryland. Please call us at 443-535-9715 or fill out our contact form if you have any questions about this topic.

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