October 26, 2015

What is the Maryland SDAT and why do I care?


Anyone doing or planning to do business in Maryland should be familiar with the State Department of Assessments & Taxation ("SDAT").  As a broad overview, SDAT governs business formation and taxation.  The SDAT website,  http://www.dat.maryland.gov, provides a wealth of information and many forms and required filing information may be found there.

Register, Change, Revive or Dissolve a Business
SDAT filing services include filing forms to register a business in Maryland. These can include: Maryland Limited Liability Company, Foreign (Non-Maryland) Limited Liability Company, Stock Corporation, Tax-Exempt Nonstock Corporation, Close Corporation, and Foreign (Non-Maryland) Corporation.  SDAT also has forms to change, revive, or dissolve a business. However, a business owner should be cautioned that many considerations go into what type of business to register and what the tax and other legal ramifications are. SDAT does not provide legal advice on these issues. Instead, an experienced business attorney can offer such advice.

Look for an Existing Business or Find Out if a Business Name
 is Taken for Your New Business
SDAT also provides a search engine for business name availability. You can search to see if any other company has registered a company name you want to use. If not, you can.register the name. You can also register a trade name which is commonly known as a t/a or d/b/a name. This name is different from the actual registered entity name but one that the SDAT authorizes you to use. (For example, my business is registered as Katherine L. Taylor, P.A., but the trade name is registered as Taylor Legal.)

Obtain Information About a Business
The status of a business can be checked through SDAT. SDAT can provide certified copies of Articles of Organization or Incorporation.  It lists the "Resident Agent," (person authorized to receive service of process for a Maryland business) and the legal status of a business (whether the charter is active or forfeited). In addition, SDAT can provide specific information about a business. For instance, you may want to see if a business is legally registered in Maryland, whether it is a close corporation or a stock corporation, the purpose of the business, or if it is in good standing or forfeited.

File Personal Property Tax Returns
SDAT has forms for filing personal property tax returns. SDAT administers the valuation of annual property taxes based on the value of a business' personal property.  SDAT automatically registers corporations, limited liability companies, limited partnerships, and limited liability partnerships for this type of tax and once your business is registered, you will receive notice that you are required to file property tax returns. However, sole proprietorships and general partnerships, which are not registered with the SDAT, must obtain an SDAT registration number and file an annual business personal property form for this assessment.

Learn How the SDAT Website Can Help You!
The website is easy to navigate but can be overwhelming, content wise, for someone not familiar with the intricacies of business requirements in Maryland. While attorney advice is recommended, it is a good idea to check out and become familiar with all SDAT has to offer.

October 19, 2015


                                                           ADVERSE POSSESSION

            Adverse possession seems to be a particularly unusual legal right. In simple terms, it
provides that a person who does not have legal title to a property can obtain it under
specified circumstances. The legal requirements to obtain adverse possession include:
(1) actual or constructive possession of the property, (2) under color of title or claim of right, and
for 20 years uninterrupted.

            Actual possession means just what it sounds like - that the person claiming adverse
possession is in actual peaceable possession of the property. Constructive possession means
possession under "color of title" or "claim of right." Color of title applies when
someone erroneously thought they owned the property but did not legally, perhaps because of
an improperly worded or recorded deed. Claim of right applies, for example, when a person
makes a legal claim that they own the property by reason of a predecessor's adverse possession.
Maryland cases have used the terms "hostile," "actual," "open," and "notorious" to explain the
type of ownership required for adverse possession. This does not necessarily mean
asserting ownership in the ordinary meaning of "hostile," which brings up ideas of malice or ill
will. Instead, the goal is that the asserted ownership is made clear, thereby giving notice to an
actual or purported owner that possession and ownership is asserted. Thus, property owners
are admonished not to "sleep on their rights."

            The 20 year requirement supports the public policy of promoting land development and
rewarding productive use and ownership of property. It also aims to deter an owner's neglect of
his or her property rights.

            Under what circumstances might an adverse possession claim arise? There are many
possible scenarios. A common one is a boundary dispute, perhaps between neighbors regarding   
a strip of land between properties. Another could be when someone abandoned a property and an
adverse possessor stakes a claim and meets the legal requirements above.  Or maybe an
owner has a defective deed, and never legally owned the area in question. Yet another scenario
could be where there is an "easement," or allowed use of part of a property without a transfer of
ownership, such as a shared driveway or road that a person is able to use to access their property.

            How and when does an adverse possession claim come before a court? A person who is
not in possession of property, but who claims title, may bring an action against the person in
possession of the property. This is called an action to  "quiet title." The legal standard or "burden
of proof" falls on the adverse possessor. Thereafter, the burden of proof shifts to the who claims
to be the owner.

            The court, hearing an adverse possession claim, will decide who has legal ownership of
the property.

            Adverse possession claims are, by nature, complicated. They are very fact specific.
Each element of an adverse possession or claim of rightful ownership must be proven.  Adverse
possession cases may require experts, factual witnesses, surveyors, title examiners, and others to
support a claim or defense to a claim. It is advisable to retain an attorney regardless of what side
you are on should one of these cases arise. It is also important, if you believe that someone may be adversely possessing your land, that you take action immediately to remove the possibility that a claim can be made. Katherine Taylor and Andrea LeWinter have represented many clients on both sides of adverse possession claims. 

October 12, 2015


            There are a series of steps involved in recording a deed in Maryland. While the overall
process is uniform, counties can differ in the technical requirements and costs. A deed to
be recorded can be prepared by an attorney licensed in Maryland or by one of the parties named in the deed. It is critical that each step is followed precisely and that the wording of the dead is accurate. Otherwise, an intended deed transfer may not be effective. If improperly done, a deed may not transfer legal title, resulting in complicated and expensive legal issues later on.
            First, what is a deed? A deed is a legal document that changes or transfers ownership of real
property in Maryland. This is done through a "conveyance." For example, upon the sale of a
home, a prior owner would convey new ownership and legal title to the purchaser through a
properly written and recorded new deed. Or a property owner may wish to gift a property to
someone without any "consideration," or payment. Nevertheless, this too must be properly
recorded in a new deed that states that no consideration was paid. A new deed may also be
required to show a change of name.
            A deed must specify the type of ownership interest that is being conveyed. This is
done through important and precise language in a "habendum clause." There are different types
of property ownership in Maryland. If not worded correctly, the attempted transfer of legal title
may not be effective.
            Once you have a properly drafted deed, the next step is recording the deed. Deeds
are recorded in the Land Records Department in each Circuit Court where the property is
situated.  While you should consult specific requirements for each county, what follows
is a general description of the process.
            1. A deed must include a "certificate of preparation," stating that the deed was either
prepared by an attorney or by a party.
            2. A deed must be notarized (signed in person before a notary public).
            3.  A "lien certificate" must be attached, if required. This will show any unpaid
taxes or liens on the property which must be paid before property can be deeded or transferred.
            4. A "State of Maryland Land Instrument Intake Sheet" must be filled out. This Sheet
will be used to determine any required transfer or recording taxes. These must be paid before
the deed will be recorded. Certain transfers may be exempt from transfer and recording taxes.
            5.  A deed can be recorded after steps 1-4 have been done. A deed, along with the above-
referenced documents will be filed by the court Clerk.  There are fees to record a deed.
Once the Clerk has recorded the deed, ownership transfers. However, if a deed
was recorded with inaccuracies in the wording or transfer language, though recorded, the deed  
may not transfer legal title.  Beware that Court Clerks cannot and will not advise you if your
deed is legally sufficient or effective to accomplish your goals.
            It is impermissible to include a social security number or driver's licenses in a deed.
            Court Clerks make and maintain a full and complete alphabetical general index of every
deed, in both the names of each grantor, donor, mortgagor and assignor, and each grantee, donee,
mortgagee, or assignee. In addition, the Clerks make a microfilm picture or other copy of every
recorded document, which is sent to the State Archivist annually.
            Recording a deed in Maryland is a multi-step exacting process. Before recording a deed,
take care to examine your intent and be sure to comply with each step of Maryland law. This
can avoid errors in ownership and deeds, which can be difficult to correct, and can cause of host
of unintended legal problems later on.


October 5, 2015



Eminent domain occurs when the state takes an owner's real property for public use. The process is called condemnation. This seems unusual to many. Why, they ask, can the government take my property? It's not that simple and there are safeguards in place to protect an owner facing condemnation.

A brief history of this process is helpful. The U.S. Constitution provides safeguards against government taking our property.

  • The Fifth Amendment states that the Federal Government cannot deprive individuals of "life, liberty, or property," without due process of law.
  • The Fourteenth Amendment forbids states from denying any person "life, liberty or property, without due process of law."

Article 3, Section 40 of Maryland's Constitution also includes safeguards:
  •   there is no taking of private property for public use without just compensation,
  •   the private property must be appraised and the fair market value determined,
  •  these matters may be submitted to a jury, and
  •   there can be an immediate taking for certain needs such as roads and right of ways.
   With this brief overview, you can see how complicated eminent domain and condemnation cases are. Many questions arise. What is a "public use?" Who determines the "fair market value?" How does an "immediate taking" work? Should an owner contest a proposed condemnation? How much will it cost? Can the state take only part of the property? What if there is a lease in effect? What does "due process" require? Should an owner settle or fight a proposed condemnation? Will a displaced owner be paid relocation expenses or reimbursed for financial losses incurred because of a condemnation?

 Each case in unique and factually specific. This article does not attempt to and cannot provide absolute answers to the many possible scenarios. However, the following tips can be helpful for a property owner dealing with this situation.

  First, the state can establish the "public use" requirement, making this difficult to challenge. Nevertheless, a property owner in this situation should beware of the following potential issues, among others:

1.     A property owner must be given proper notice of the proposed condemnation. This includes advance notice (except in cases of immediate condemnation noted above).
2.     Except for immediate condemnation cases, an owner has a right to request a jury trial. For example, a jury trial may be requested on specific issues such as fair market value. Owners also have appeal rights.
3.     Once a property has been condemned, an owner is entitled to damages. Damages can be awarded for the taking of an entire tract of land or where part of a tract is taken, for the fair market value of the part taken.
4.     The value of condemned property is critical to an owner. The state must provide evidence, including a written appraisal of the fair market value of the property performed by a qualified impartial appraiser. An owner can also present appraisal evidence or can rely on the assessed value of the property as determined by the State Department of Assessment and Taxation.
5.     There are special considerations if the property being condemned is a dwelling. An owner or occupant of a dwelling may be entitled to additional compensation for the reasonable cost of a replacement dwelling, or other increased interest costs and other debt service costs a person is required to pay for financing any comparable replacement dwelling.  Also, moving and relocation expenses must be paid to a displaced person.
6.     If the property owner prevails, the state must pay courts costs in a condemnation proceeding, including an allowance for reasonable legal, appraisal, and engineering fees. In addition, the owner may be entitled to interest on damages at the rate of 6% per annum. An owner is also entitled to receive a credit for taxes paid before the property was condemned.
7.     An action for condemnation must be brought within 4 years of the authorization to administratively or legislatively acquire the property. This period can be renewed by a new authorization.

An owner facing condemnation is wise to retain an attorney at the inception of the proceeding to help with the complicated issues along the way. Experienced counsel can untangle the complicated issues and focus on maximizing an owner's damages. This can make the whole process, which is understandably something most people would rather not face, more successful.