Maryland Still Has Ground Rent and the Exam Tests It

Maryland is one of the last states where Ground Rent still exists, creating a split ownership structure that the MREC tests throughout the property ownership section.

The MREC governs real estate licensing in Maryland. The PSI exam tests 30 state specific questions alongside 80 national questions, with a minimum passing score of 75%. Maryland's ground rent registration and billing requirements, the Understanding Representation form's retention of the subagent role, and the Chesapeake Bay Critical Area Act's disclosure obligations are the three areas where Maryland law diverges sharply from national frameworks, and where candidates who prepared generically pay the steepest price on the state portion.

Ground Rent Nuances

Ground rent is a feudal-era ownership structure that Maryland never abolished. The homeowner owns the improvements but leases the land from a ground rent holder, and that holder has specific registration and billing obligations the PSI exam will test at the level of exact requirements. Maryland real estate law: where it's always 1700 somewhere.

Maryland is one of the few states where ground rent still exists, creating split ownership where the homeowner owns the building but leases the land, ground lease holders must register with the state, mail bills 60 days before payment, and can demand no more than three years of past-due rent.

Know that ground rent holders must register with the state or lose the right to collect rent entirely. Know the 60-day advance billing requirement before a payment is due. Know that the three-year cap on past-due rent is the outer limit a holder can demand even if a homeowner hasn't paid in longer. The PSI exam will present a ground rent scenario and ask whether the holder followed proper procedure, and the answer turns on whether all three requirements were met, not just whether the ground rent itself is valid.

Understanding Representation

Maryland's Form 1003 covers four relationship types, and one of them is the "subagent" role that most other states eliminated decades ago. Most candidates assume subagency no longer exists. In Maryland, it does. That assumption is precisely what the MREC exam is designed to test.

Maryland requires Form 1003 covering seller's agent, buyer's agent, subagent, and dual agent relationships, the exam tests Maryland's unusual retention of the "subagent" role (a licensee from another company who still works for the seller).

Agency representation disclosure requirements vary along the East Coast. North Carolina uses the Working With Agents brochure as its required disclosure mechanism, and New Jersey mandates the Consumer Information Statement at first contact. Both states test different forms and timing than Maryland's Understanding Representation framework.

Know that a Maryland subagent is a licensee from a cooperating firm who represents the seller, not the buyer, even though they may be showing the buyer properties. Know when Form 1003 must be presented, and understand the duties owed under each of the four relationship types. The PSI exam will describe a cooperating agent's role and ask which relationship type governs. The subagent option is the answer national prep courses never prepare candidates to choose.

Critical Area Act Disclosures

Maryland's Critical Area Act creates a mandatory disclosure obligation that survives an "as is" clause. That's the detail that catches every candidate who assumes "as is" removes the seller's disclosure requirements for Chesapeake Bay properties.

Maryland's Chesapeake Bay Critical Area Act restricts development within 1,000 feet of tidal wetlands with a mandatory 100-foot buffer, sellers must disclose whether property falls within this zone, and the "as is" disclaimer does not apply.

Know the 1,000-foot regulated zone and the 100-foot buffer as separate measurement thresholds. Know that the seller's obligation to disclose Critical Area status is a statutory requirement that an "as is" contract clause can't eliminate. The MREC exam will describe a transaction involving tidal wetlands proximity and ask what the seller must disclose and whether the "as is" designation changes that obligation. The correct answer is that it does not, and understanding why requires knowing that the disclosure is a statutory duty, not a contractual one.