Since the 1950s Maryland corporations have been required to file Articles of Transfer with the State Department of Assessments and Taxation (SDAT) when selling or transferring their last remaining asset, so long as that asset was real property.
The filing was required even when when a corresponding corporate deed of conveyance was recorded in the land records.
According to a recent update from the Underwriting Counsel of a national title insurer, that changed on October 1, 2018 with Senate Bill 659, which made several statutory changes to the requirements of Articles of Transfer and the validity of corporate deeds transferring all or substantially all of a corporation’s assets:
A corporation may now sell or transfer its real property (which is all or substantially all of its corporate assets) by corporate deed alone.
A reach-back “curing” provision in Section 14-113 of the Real Property Article of the Annotated Code of Maryland now ensures the validity of any sale of a Maryland corporation’s real property (which was all or substantially all of its assets) prior to October 1, 2018 where a corporate deed of conveyance was recorded but the Articles of Transfer were not filed with the SDAT.
We will continue to conduct due diligence with regard to corporate sales by ensuring the corporation is in good standing, using proper certifications in deeds to document the conveyance, and determining the proper proper corporate officers with corporate authority to execute contracts of sale and deeds.