Q: In Maryland, what is a recommended transaction structure for acquiring fee simple ownership of commercial property?
Buyer wants to acquire property to use as an office in Oldtown, MD (Allegany County). The buyer wants to own the property in fee simple. I know that installment contracts give legal title to the seller (vendor) and equitable title to the buyer (vendee). But besides installment contracts, I could not find any other relevant transaction structures in the Maryland Real Property Code.
I am wondering if an installment contract constitutes ownership in fee simple, or if some other transaction structure is recommended under the Real Property Code to accomplish this goal.
A: I'm not sure what you are asking. An installment sales contract -- or one of another half dozen or so types of documents -- is the contract describing the transfer. It does not transfer title. That is accomplished in a closing. The name of the title recipient is often specified in the contract, but, particularly in commercial contexts, that is often described as ABC or assigns. Then, the buyer creates an appropriate entity, be it corporation, partnership, limited partnership, LLC, trust, or a few other choices.The choice of that entity is a matter of tax law, liability prevention, and alienability concerns that are gleaned from a client during the planning phase.
You really need to sit down for a consult with a lawyer before this transaction costs you much, much more than you anticipate.
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