Maryland Real Estate Laws: Contracts, Disclosures, and Foreclosure

Maryland real estate laws sit across three main statutes — the Real Property Article, the Tax-Property Article, and the Land Use Article — and they shape every stage of a deal, from the written contract to the deed, the taxes at settlement, the rules for renting the property out, and what happens if a mortgage goes unpaid. A few features are unusual enough that people moving from other states get caught off guard, especially the ground rent system around Baltimore and the twin transfer and recordation taxes charged at closing.

Contracts for Real Estate Must Be in Writing

Under Maryland’s statute of frauds, no oral agreement to sell land or any interest in land is enforceable. A handshake deal on a house gives you nothing to sue on. The contract has to be written and signed by the party you want to hold to it.

Deeds carry their own formalities. A valid deed must name the grantor and grantee, describe the property specifically enough to identify it with reasonable certainty, and state the interest being conveyed. It has to be executed and acknowledged, usually before a notary, but Maryland does not require a seal or attestation for validity.¹ Any deed, mortgage, or deed of trust must be prepared by an attorney, prepared under an attorney’s supervision, or prepared by one of the parties named in the document. A form pulled off the internet and filled in by a friend doesn’t qualify.

The general warranty deed is the standard in residential sales. It guarantees clear title, the seller’s authority to sell, and a promise to defend the buyer against all claims. Special warranty deeds, which only cover the seller’s own period of ownership, tend to show up in commercial deals and estate sales.

Seller Disclosure or Disclaimer

Sellers of residential property with four or fewer units must give the buyer either a written property condition disclosure statement or a written disclaimer statement before the buyer is bound to the contract.² The disclosure form covers what the seller actually knows about foundation settlement, roof and basement leaks, plumbing and HVAC systems, septic systems, wood-destroying insects, hazardous materials like asbestos or radon, zoning violations, and other material defects.

A seller who prefers not to make those representations can use the disclaimer statement and sell “as is.” The disclaimer is not a shield for hidden problems, though. Even with a disclaimer, sellers have to disclose latent defects they actually know about — defects a buyer would not catch on a careful visual inspection and that would threaten the health or safety of occupants.² Concealing a known foundation crack or mold behind drywall creates liability regardless of which form the seller chose.

Several categories of sales sit outside the disclosure requirement: new construction that has never been occupied, foreclosure sales, sheriff’s and tax sales, transfers by a fiduciary administering an estate or trust, and sales of unimproved land.²

For homes built before 1978, federal law adds a lead paint disclosure on top. Sellers and landlords must disclose any known lead-based paint or lead hazards, hand over available inspection or risk assessment records, provide an EPA-approved lead hazard pamphlet, and attach a specific Lead Warning Statement to the contract.³

Transfer, Recordation, and Property Taxes

Maryland charges two separate state-level taxes when a property changes hands, and the combined bill catches many first-time buyers off guard. The recordation tax runs $4.10 for every $500 (or fraction of $500) of the purchase price or the debt being secured. The state transfer tax is 0.5% of the total consideration. First-time Maryland homebuyers buying a principal residence get a reduced transfer tax rate of 0.25%.⁴ Many counties and municipalities layer their own transfer taxes on top, so the total varies by jurisdiction. On a $400,000 home, the state recordation and transfer taxes alone can add up to several thousand dollars before county taxes come in.

Property taxes after closing are based on assessed value set by the State Department of Assessments and Taxation. SDAT reassesses every property on a three-year rotating cycle, and any increase phases in over three annual installments rather than hitting all at once.⁵ Tax rates vary by county and municipality.

Homestead Credit

The Homestead Property Tax Credit caps the annual increase in the taxable assessment of your principal residence at 10% at the state level. Many local governments set even tighter caps. The credit doesn’t lower market value — it produces a credit for any assessment increase over the cap, which softens the blow when property values climb quickly.⁵ You have to apply. It doesn’t attach automatically.

Homeowners’ Credit

The Homeowners’ Property Tax Credit is a separate, income-based program aimed at homeowners whose property taxes are disproportionately high relative to income, particularly lower-income residents, seniors, and disabled homeowners.⁵

Ground Rent

Maryland — Baltimore especially — still has ground rent, a system that doesn’t exist in most other states. If a property is subject to ground rent, you own the building but lease the land under it from a ground lease holder, paying a small annual or semi-annual rent for the dirt.

The rules have gotten stricter. A ground lease holder cannot collect any payment unless the ground lease is registered with the State Department of Assessments and Taxation, and the holder must mail the property owner a notice at least 60 days before a payment is due.⁶ All irredeemable ground rents that had not previously been registered became redeemable after April 1, 2023, which means the homeowner can buy the ground rent out entirely. Before signing on a Baltimore property, confirm whether ground rent applies and whether the lease has been properly registered.

How You Can Hold Title

Maryland recognizes several forms of co-ownership, and the choice has real consequences for creditor exposure and what happens when an owner dies.

Sole ownership: one person holds full title and can sell, mortgage, or transfer without anyone else’s consent.
Joint tenancy: two or more owners hold equal shares with a right of survivorship, so a deceased owner’s share passes automatically to the survivors instead of going through probate.
Tenancy by the entirety: available only to married couples, with survivorship rights plus a layer of creditor protection. A creditor of just one spouse generally cannot force a sale or place a lien on property held this way, and both spouses must agree to sell or encumber it.
Tenancy in common: two or more owners hold shares that may be unequal, with no survivorship. A deceased owner’s share passes under their will or Maryland’s intestacy rules.

The entireties protection matters most when only one spouse owes the debt. Once both spouses are on the same obligation — a joint credit card, a joint judgment — the protection is gone.

Landlord and Tenant Rules

Title 8 of the Real Property Article governs residential leases. The rules that trip people up most often are the writing requirement for longer leases, the security deposit cap, and the tenant’s right to escrow rent when a landlord won’t fix serious problems.

Leases

Any lease for a term longer than one year must be in writing to be enforceable. Shorter oral leases are permissible, though written leases are better practice at any length. Leases on pre-1978 properties must include the federal lead paint disclosure.³

Security Deposits

A landlord cannot charge more than one month’s rent as a security deposit, regardless of how many tenants sign the lease. A two-month deposit is allowed only in a narrow situation: the tenant qualifies for utility assistance through the Department of Human Services, the lease requires the tenant to pay utilities directly to the landlord, and both parties agree in writing.⁷

Landlords must deposit security funds in a federally insured Maryland financial institution within 30 days of receiving them, in an account devoted exclusively to security deposits and bearing interest. When the tenancy ends, the landlord has 45 days to return the deposit plus accrued simple interest — at the daily U.S. Treasury yield curve rate for one year or 1.5%, whichever is greater — less any amount properly withheld for unpaid rent or damage beyond normal wear and tear.⁷ A landlord who overcharges the deposit faces a penalty of up to three times the excess, plus the tenant’s reasonable attorney’s fees.

Habitability and Rent Escrow

Landlords have to keep rental properties habitable and provide essential services like heat, water, and electricity. When they don’t, Real Property §8-211 lets the tenant pay rent into a court escrow account instead of paying the landlord, provided the tenant has given proper notice of the defect. Proper notice means written communication sent by certified mail, actual knowledge on the landlord’s part (the landlord has seen the condition), or a written violation notice from a government agency. The court oversees the dispute, and the escrowed money is released based on whether repairs get done. Rent escrow also works defensively if the landlord tries to evict a tenant who withheld rent because of uninhabitable conditions.

The Foreclosure Timeline

Maryland foreclosures run through the courts on a set schedule. The mortgage servicer must send a Notice of Intent to Foreclose at least 45 days before filing any court action. The first filing, an Order to Docket, can go in as soon as 90 days after the first missed payment, or 120 days for loans covered by federal law, which includes most residential mortgages.⁸

Once the Order to Docket is filed, the homeowner has 25 days to request foreclosure mediation, which is a chance to negotiate a loan modification or repayment plan. If mediation happens and produces no agreement, the sale can be scheduled as soon as 15 days later. If the homeowner never requests mediation, the sale can go forward as soon as 45 days after the homeowner was served the Final Loss Mitigation Affidavit.⁸

The homeowner is entitled to at least 10 days’ notice before the sale date. After the sale, the homeowner has 30 days from the date of the Notice of Report of Sale to file exceptions, formal objections asking the court to reject the sale. If no valid exceptions land and the court ratifies, eviction can happen as soon as 15 days after ratification.⁸ Active-duty servicemembers have additional protection under the federal Servicemembers Civil Relief Act, which blocks foreclosure on pre-service mortgage debt during active duty and for nine months after without a court order.⁹

Fair Housing

The federal Fair Housing Act applies to every Maryland real estate transaction and bars discrimination based on race, color, national origin, religion, sex, familial status, and disability.¹⁰ The law covers sales, rentals, lending, appraisals, and advertising.

Federal regulations name specific prohibited conduct. Steering — an agent discouraging a buyer from looking at homes in certain neighborhoods or pushing them toward others based on a protected characteristic — is illegal. So is redlining, where a lender refuses to make loans, or buys loans only in certain areas, based on neighborhood demographics.¹¹

Landlords and property managers must provide reasonable accommodations for tenants with disabilities when needed for equal access, such as allowing an assistance animal in a no-pets building. A landlord can deny the request only if it would impose an undue financial or administrative burden or fundamentally alter the nature of the operation. Extra fees or deposits cannot be charged as a condition of granting a reasonable accommodation.¹²

Zoning Is Local

Zoning in Maryland is set by county and municipal governments under authority delegated by the Land Use Article. Local legislative bodies write zoning regulations, draw district boundaries, and control how those regulations are enforced and changed. Before adopting or amending a zoning regulation, the local government must hold at least one public hearing.¹³

Local codes sort land into residential, commercial, industrial, and agricultural categories, each with limits on use, height, density, setbacks, and lot coverage. If a planned use doesn’t fit the zoning, the owner can apply for a variance (permission to deviate from a specific standard like a setback) or a special exception (permission for a use the code contemplates but doesn’t allow by right). Both go through hearings at a local board of appeals or planning commission, and neighbors generally have the right to be heard.

1
Maryland General Assembly. Maryland Real Property Code Section 4-101 – What Deeds Sufficient; Seal or Attestation Not Required
2
Maryland General Assembly. Maryland Real Property Code 10-702
3
eCFR. Subpart A – Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property
4
Maryland Courts. Recording Fees and Taxes
5
Maryland Department of Assessments and Taxation. Maryland Homestead Property Tax Credit Program
6
Maryland Department of Assessments and Taxation. Ground Rent
7
Maryland General Assembly. Maryland Real Property Code 8-203
8
Maryland Office of Financial Regulation. Maryland’s Mortgage Foreclosure Process
9
Military OneSource. Servicemembers Civil Relief Act
10
U.S. Department of Housing and Urban Development. Housing Discrimination Under the Fair Housing Act
11
eCFR. Part 100 – Discriminatory Conduct Under the Fair Housing Act
12
U.S. Department of Justice. Joint Statement – Reasonable Accommodations Under the Fair Housing Act
13
Maryland General Assembly. Maryland Land Use Code Section 4-203 – Zoning Regulations – Procedure; Public Hearings