Ch. 7 Flashcards
Attorney-in-Fact
A person to whom authority is granted by a document, called a power of attorney.
Chesapeake and Atlantic Coastal Bays Critical Area
Residential contracts of sale must contain wording concerning the “Critical Area,” which is identified as all land and water within 1,000 feet of wetlands and the Chesapeake/Atlantic coastal bays, including all tidal tributaries. The statement is required regardless of where the property is located in MD.
Competency
Under MD law, a person reaches the age of majority and has the capacity to enter into a valid real estate contract at age 18. Generally, competency has three requirements: age (majority), state of mind, and authority to act.
Deferred Water and Sewer Charges
Homesellers are obligated to disclose in the residential sales contracts any existing expense for deferred water and sewer charges (also called tap fees or FFBs – front-foot benefits). Failure to provide this information would allow the buyer to terminate the contract before settlement. If the buyer does not learn of the expense until after settlement, the seller remains financially responsible.
Equitable Title
A buyer receives equitable title when a contract of sale has been signed by all parties. The buyer will not receive legal title until the delivery and acceptance of the deed.
Lease Purchase Option Agreement
An unilateral agreement giving the tenant a right to purchase the property, normally with stated terms including time frame, the purchase price, an the option price. No residential lease purchase option agreement is valid in MD unless it states in capital letters “THIS IS NOT A CONTRACT TO BUY.”
Military Installations
Some of the jurisdictional addenda will have a notice similar to this, “Buyer is advised that the property may be located near a military installation that conducts flight operations, munitions testing, or military operations that may result in high noise levels.”
New Home Warranty
Builders must disclose to purchasers on a State-mandated form whether they participate in a new home warranty security plan and the extent of that plan.
Statute of Frauds
A requirement for all contracts involving the transfer of real property to be in writing and signed by the parties. A lease for less than one year does not have to be in writing to be enforceable per the statute.
Unauthorized Practice
Licensees cannot raft their own agreements and are authorized only to insert required information into preprinted forms that attorneys have drafted. The penalty for unauthorized practice of the law is a fine of not more than $5,000 and/or imprisonment for not more than one year.
