Realty proposals face legislature

January 08, 1995|By Daniel B. Wroblewski | Daniel B. Wroblewski,Real Estate Editor

Several real estate-related issues will come before the legislature this session, among them bills dealing with title companies and the seller disclosure law.

-! The session begins Wednesday.

Title companies

Del. Michael E. Busch, D-Anne Arundel, chairman of the House Economic Matters Committee, said he plans to offer a bill to close a loophole that allows title insurance agents who have stolen clients' escrow money to continue working in the field.

Attorney General J. Joseph Curran Jr., who also is planning to draft legislation, may seek to have title insurance agents and brokers post a higher bond than is now required. The state requires title insurance firms -- except those controlled by lawyers -- to post a $100,000 bond.

Mr. Curran's interest in tightening the state's regulations has been rekindled, in part, as a result of the case of Joseph E. Goldberg Sr., a Marriottsville resident who operated Land Title Research of Ellicott City.

In October, the state shut down and seized the records of Land Title when an insurance underwriter found that $2.3 million was missing from the company's escrow account, where clients' money was to be temporarily held.

Seller disclosure

The Maryland Association of Realtors hopes to amend the seller disclosure law, which requires sellers to give buyers a form outlining the condition of the house or a disclaimer saying the house is being sold "as is."

The MAR wants to make two changes. First, it wants to change the wording to make clear that the form is not a warranty.

According to Mary Fruscello, executive vice president of the MAR, many buyers receive the seller disclosure form and believe that it guarantees the condition of the home. A seller may believe the roof is in good condition and indicate this on the form, but the seller is not making any promises by doing so.

The form is often "confusing in the eyes of the buyer," she said. "This is a disclosure based on what the owner knows" and not a guarantee.

The disclaimer form -- in which the seller in writing states that he is refusing to fill out the disclosure form -- should be eliminated and a line added on the disclosure form for sellers who do not want to fill out the form, Ms. Fruscello said.

Secondly, MAR wants to exempt sellers of multifamily housing (more than four units) from the law.

Ms. Fruscello said the law is not needed for such transactions because the form is not appropriate for these properties, and buyers of multi-family housing are more sophisticated and will undoubtedly perform their own inspections.

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