Recording a lease in Maryland is required whenever the lease term exceeds seven years, and the filing goes into the land records of the circuit court for the county where the property sits. Shorter leases do not have to be recorded at all. For leases that do cross the line, you can file either the full document or a shorter memorandum of lease, and the total cost is a combination of a base recording fee, a $40 statewide surcharge, and a recordation tax that scales with the rent and term.
Which Leases Have to Be Recorded
Maryland Real Property Section 3-101 sets the threshold. A lease that creates an “estate above seven years” does not take effect against third parties unless it is executed and recorded.1Maryland General Assembly. Maryland Code, Real Property 3-101 – Deeds Required to Be Executed and Recorded; Exceptions; Memorandum of Lease An eight-year or ten-year lease clearly qualifies. A lease of seven years or fewer does not require recording, though the parties can record one voluntarily to put future buyers and lenders on notice.
Renewal options are where the arithmetic gets tricky. The statute exempts a lease with an initial term of seven years or less only when each renewal term is also seven years or shorter, and only when a party to the lease can either exercise or prevent the renewal.1Maryland General Assembly. Maryland Code, Real Property 3-101 – Deeds Required to Be Executed and Recorded; Exceptions; Memorandum of Lease A five-year lease with a single five-year renewal option satisfies both conditions and does not need to be recorded. A five-year lease with an eight-year renewal does not qualify, because the renewal itself exceeds seven years. An automatic renewal that neither party can prevent likely fails the second test as well. When the total possible term is close to the line, record.
Memorandum of Lease: The Practical Alternative
Commercial leases often run to many dozens of pages, and recording the full document means paying more in page fees and publishing confidential business terms. Maryland allows parties to record a memorandum of lease instead, with the same legal effect.1Maryland General Assembly. Maryland Code, Real Property 3-101 – Deeds Required to Be Executed and Recorded; Exceptions; Memorandum of Lease
The memorandum has to be signed by every party to the lease and must include:
- The names and addresses of lessor and lessee as set forth in the lease.
- A reference to the lease and its date of execution.
- The legal description of the premises in the form used in the lease.
- The commencement and termination dates of the term.
- Any right of extension or renewal: the maximum period or date to which the lease may be renewed, and the date on which the right is exercisable. If a date cannot be fixed, the memorandum must state the formula for computing it.
A well-drafted memorandum often fits on two or three pages. The full lease stays private between the parties, and the land records show enough to put the world on notice.
Where to File and How the Document Must Look
Leases are recorded with the land records office of the circuit court in the county where the property is located. Each of Maryland’s 23 counties and Baltimore City maintains its own office, and the filing has to go to the correct one. Submit the original lease or memorandum with notarized signatures from every party. Maryland notaries may charge up to $8 per signature on the original and $4 per signature on copies.2Maryland Secretary of State. Notary Division
The clerk will reject a document, or charge triple fees, if it does not meet the formatting rules in Real Property Section 3-104:3Maryland General Assembly. Maryland Code, Real Property 3-104
- Printed text in at least 8-point type, black ink on white paper. Typewritten documents must use at least elite-size type.
- A 3-inch top margin on the first page and 1-inch margins on the left and right of every page.
- In offices that scan documents, no rider or attachment placed over other text.
Non-conforming instruments can still be filed, but at three times the normal fee, and an affidavit describing the document, date, parties, and property must be attached if the instrument is not readily scannable.
Many counties now accept electronic recording, but participation is uneven. Check with the local clerk’s office before assuming you can file digitally. Third-party e-recording platforms typically add a convenience fee on top of the standard charges.
Filing Fees and the Statewide Surcharge
Recording fees under Real Property Section 3-601 depend on the type of instrument and the page count:
- Most instruments of nine pages or fewer: $20.
- Most instruments of ten pages or more: $75.
- Instruments involving solely a principal residence: $20 regardless of length.
- Releases of nine pages or fewer: $10.
On top of the base fee, a $40 surcharge applies to every instrument recorded in the land records, with narrow exceptions for powers of attorney, foreclosure notices, plats, and homeowners’ association disclosures.4Maryland Courts. Recording Fees and Taxes Lease recordings generally trigger it. A memorandum of lease fitting within nine pages costs $20 plus $40, or $60 before tax. A 15-page lease filed in full runs $75 plus $40, or $115.
Recordation Tax on Long-Term Leases
Recording fees are modest. The recordation tax is where costs can climb quickly. Maryland imposes a recordation tax on instruments filed in the land records, and leases exceeding seven years are not exempt. The tax is calculated per $500 (or fraction of $500) of the taxable amount, at a rate that varies by county because most counties add their own rate on top of the state rate.
For leases other than ground rents, the taxable amount is generally the average annual rent over the full term, including renewals, multiplied by ten, plus any additional consideration beyond rent. If the average annual rent cannot be determined from the lease, the taxable amount is the greater of 105% of the minimum average annual rent capitalized at ten, or 60% of the property’s assessed value. Leases of seven years or fewer are exempt under Tax-Property Section 12-105(d).
A worked example makes the scale clear. A ten-year commercial lease with average annual rent of $120,000 produces a taxable base of $1,200,000. At a combined state and county rate of a few dollars per $500, the resulting tax can run into several thousand dollars. For high-rent commercial properties, the recordation tax often exceeds every other filing cost combined. Recording a memorandum instead of the full lease does not reduce the tax, because the memorandum reflects the same term and rent.
What Happens if You Don’t Record
An unrecorded lease that should have been recorded is still valid between the landlord and the tenant. The exposure is to third parties. Under Real Property Section 3-101, a lease exceeding seven years that has not been recorded cannot be enforced against a buyer who takes the property without knowledge of the lease.1Maryland General Assembly. Maryland Code, Real Property 3-101 – Deeds Required to Be Executed and Recorded; Exceptions; Memorandum of Lease A new owner can disregard the tenancy and move to put the tenant out.
A tenant in physical possession may have some protection. Under general real property principles, a buyer who can see someone occupying the premises has a duty to inquire about the occupant’s rights, and courts have treated visible possession as a form of constructive notice. The argument is fact-dependent and considerably riskier than simply recording.
Lenders and Title Insurance
A lender running a title search before issuing a mortgage will not find an unrecorded lease. The lender may refuse to recognize the tenancy, which can complicate the landlord’s ability to use the property as collateral. Title insurance policies routinely list “rights of tenants under unrecorded leases” as a standard exception, meaning the insurer will not cover losses tied to a lease that should have been recorded but was not.
Bankruptcy
If the landlord files for bankruptcy and the trustee rejects the lease, 11 U.S.C. Section 365 lets the tenant elect to remain in possession for the balance of the term.5Office of the Law Revision Counsel. 11 U.S. Code 365 – Executory Contracts and Unexpired Leases That right turns on enforceability under “applicable nonbankruptcy law,” which brings Maryland’s recording requirements back into the picture. An unrecorded long-term lease that Maryland treats as unenforceable against third parties may not survive the bankruptcy intact, and the tenant could lose possession to the trustee or to a buyer who takes the property out of bankruptcy. Recording the lease up front removes that threshold question.
Recording Amendments Later
Once a lease is in the land records, the public record reflects those terms. Any later change to rent, term, permitted use, or other material provisions should also be recorded. Real Property Section 3-102 allows any instrument affecting property to be recorded, and recording it creates constructive notice from the filing date.6Maryland General Assembly. Maryland Code, Real Property 3-102 – Other Instruments Which May Be Recorded An unrecorded amendment binds the original parties but not a new owner, who will see only the originally recorded terms.
Amendments have to meet the same formatting and notarization requirements as the original filing. Fees follow the same schedule under Section 3-601, plus the $40 surcharge. If the amendment extends the term or increases the rent, it can trigger additional recordation tax on the incremental consideration, which is why parties sometimes structure amendments to preserve the original term and minimize tax.