UPDATE: Maryland Short Sale Rules

The Maryland Mortgage Assistance Relief Services Act (MD MARS) went into effect July 1 governing short sales. It requires a “mortgage assistance relief service provider” providing “mortgage assistance relief services” to comply with specified MD and incorporated federal regulations issued by the Consumer Financial Protection Bureau. The most important thing to know is that negotiations or discussions over short sale issues are considered “mortgage assistance relief services” outside the scope of an MD real estate license. Those in violation of the new law (enforced by the Commissioner of Financial Regulation and Attorney Generals in MD) can be liable for serious damages, as well as potential criminal charges. 

GCAAR does not advise REALTORS® to perform services outside the scope of their license and encourages members to read the MD Real Estate Commission’s short sale guidelines here.


The Office of the Commissioner on Federal Regulation also provides updated information on individuals providing short sale services here. 

Maryland Recording Fee Increased by $20

This year during the Maryland General Assembly session, there were several tax increases included in House Bill (HB) 72, the Maryland Budget Reconciliation Act.  Fortunately, both the House of Delegates and Senate avoided significant tax increases including significant tax increases on real estate.  However, the legislation did include some fee increases including an increase in the real estate recording fee.  The current recording fee is $20 per recordable instrument.   HB 72, which was signed by Governor O’Malley, will increase the fee from $20 to $40 for each recordable document for four years (2012-2016).  This will go into effect on July 1, 2011 through July 1, 2015.

Montgomery County Residential Rental Properties Must Be Licensed

Montgomery County law requires residential rental properties to be licensed. Property owners who do not comply can be subject to a $500 fine. Read more.  

Maryland Legislative Update

See what issues are being discussed in the Maryland General Assembly. 

The Election Results Are In!

The general elections were held on Tuesday, November 2.  See how your MAR RPAC-endorsed candidates did on Election Day. 

Maryland RPAC-Endorsed Candidates

The Maryland Association of REALTORS® Political Action Committee (RPAC) has supported many different elected officials over the past 4 years in the General Assembly. Recently, the RPAC trustees have also interviewed several candidates for upcoming 2010 elections. View the list of some of the REALTOR®- supported candidates for the 2010 elections.

Maryland Real Estate Commission Agency Disclosure Chart 

The Maryland Real Estate Commission has now adopted a new interpretation regarding the obligation of licensees to disclose their agency relationship during the open house and at the time of showing property as a buyer agent where the seller or seller's agent happens to be at the property at the time of the showing. Stay tuned for updates. 

New Rules to Take Effect for Teams and Groups

During the 2010 Session of the Maryland General Assembly, the Legislature enacted House Bill 406, which will impose numerous rules and regulations applicable to the operation of teams and groups within a real estate brokerage office. Governor O’Malley has signed House Bill 406 and the provisions of House Bill 406 will take effect on October 1, 2010Article by Al Monshower, Esq.

2010 Maryland Legislative Session

The 2010 Maryland General Assembly session began on Wednesday, January 13 and ended on Monday, April 12. For the most up to date information on what bills have been signed and will be signed, please visit and click on government affairs. Click here. 

Maryland Attorney General's Advice on Taxes for Short Sale Transactions

Maryland Attorney General's letter: On Wednesday January 27, Maryland Attorney General Doug Gansler's office released an advice letter on whether a county has the authority to assess recordation taxes on debt of a "short sale" seller of real property that is forgiven by the lender.  Speaking to over 200 REALTORS® at the Maryland Association of REALTORS® legislative day, Attorney General Gansler discussed the letter that states, "While not expressly prohibited, it is my view that the counties do not have the authority to include debt forgiven by the seller's lender in calculating the consideration on which the recordation tax will be calculated."  To read a copy of the AG's letter, please click here.
Background: GCAAR recently informed members that several counties in Maryland had recently started charging recordation and/or transfer taxes on the unpaid principal balance of the mortgage instead of the sales price on short sales.  On Tuesday, January 12, GCAAR was informed that the Montgomery County's Department of Finance Transfer Office had decided to hold off temporarily on their position that short sales should be taxed on the unpaid principal balance of the mortgage as if the excess debt over and above the sale price is being waived/cancelled.
However, both Anne Arundel County and Prince George's County had moved forward with this position.  REALTORS® reported that settlements were being delayed because of this new unexpected additional tax on short sale transactions.  GCAAR along with AACAR and PGCAR worked with MAR to try to stop the counties from charging these "new taxes."  MAR sought a legal opinion from the Maryland Attorney General's office to clarify the definition of "consideration" for these taxes on short sale transactions.  
Counties Status as of Friday, January 29: GCAAR has been informed that Montgomery County is still at a temporary halt, while the County Attorney's office continues to conduct its own legal analysis.  They are hoping to release a formal opinion within the next 30 days.  Anne Arundel County has stated that they will no longer be charging taxes on the forgiven debt and will continue the practice of just charging taxes on the sales price agreed upon by the buyer and seller.  PGCAR has stated that Prince George's County has also not released a formal opinion and is suggesting that REALTORS® and title professionals who have settlements pending over the next several days contact Michael Dougherty, Finance Director, directly to negotiate the tax.  Mr. Dougherty offered his direct line at 301-952-4013.
Associations Seeking Legislation: The Attorney General's office has said that in their view the counties do not have the authority to include debt forgiven by the sellers' lender in calculating the consideration on which the tax will be calculated.  However, they have also stated that taxing recordation taxes on the forgiven debt in a short sale is not expressly prohibited by statute.  Therefore, the associations are preparing to move forward and seek legislation that will clarify that the excess debt owed on a mortgage is NOT part of the "consideration" between the two parties in a real estate transaction.  GCAAR's government affairs staff is working diligently on this issue and will keep members informed as we receive any new information.  If you have any questions, please contact Meredith Weisel, VP of Public Policy for Maryland at   


MAR Government Affairs News