News from Within Universal Title
Wow! Can you believe it’s already February, 2020 seemed to pass by both in fast forward & slow motion somehow. I think we can all agree that 2020 & now 2021 have forced us all to take a critical look at the way we do business & live life. In the midst of these now uncertain times, I have been able to find some silver linings and make some positive changes both personally & professionally, and I have watched many of you do the same. I am continuously inspired by the UT families’ tenacity, grit, & willingness to embrace creative solutions to new problems.
A wise husband of mine once told me “The most dangerous words ever uttered in business are, “that’s the way it’s always been done.”” When presented with new challenges, we have to be ready to meet those challenges head on, swiftly & without missing a beat. The real estate settlement has always been a face- to -face experience with all the players involved coming together to celebrate a monumental moment in our clients lives.
Over the past year some of the amazing things I have seen from my amazing colleagues are:
- Curbside Settlements
- Drive Thru Settlements
- Global Settlements conducted behind our desks to the comfort of our client’s homes from Bethesda to Beirut.
New technologies and laws have enabled us to stay operational & move the settlement process forward no matter what. While we are excited to get back to the face- to- face experience, we will continue to utilize these new technologies in our business. The UT operations team is committed to improving processes & making electronic notarization available in all instances the law will allow. As most of you know until this year Maryland unlike Virginia did not have a law permitting electronic notarization, and this law took effect on October 1 of 2020. Although this nothing new for Virginia, in Maryland this technology is still very much in its infancy.
A couple of things to keep in mind if you are doing business in Maryland about the new law:
- Electronic notarization in Maryland is permitted if the individual being notarized can successfully prove they are who they claim to be by answering a series of questions within a five -minute period if which 80% of are answered correctly.
- The individual must also provide a valid passport, driver’s license, consular identification, or another valid unexpired government identification card that contains both a photo and signature.
- The Identification must be in English so the software can go through the credential analysis program with it.
- The notarization must be performed with one of the State of Maryland’s approved vendors and must be recorded.
- If there is a consumer loan the lender must approve of the use of remote online notarization even if it is only on the seller side.
- Having good high- speed internet will help the process go quicker and smoother.
- The credential analysis process must be completed each time so it is imperative the client has the time to do it all in one sitting just like an old fashioned settlement at the table.
What you can expect from UT this year is to master the experience of the Remote Online Notarization(“RON”). Our goal is to lead the industry in this process and make sure our mutual clients experiences are even better. We look forward to “Seeing” you soon!”
Samantha La Mell
Regional Director, Maryland
Non-MD Resident Income Tax Withholding
Do You Know Where Your Client Lives?
Are you or your client (for Realtors) Maryland “Residents?” The answer to this question will have a significant financial impact if you are selling real estate in Maryland.
Maryland Tax Law provides for an income tax withholding on sales or transfers of real property in Maryland by NONRESIDENT INDIVIDUALS and NONRESIDENT ENTITIES. This tax will be withheld and remitted by the Settlement or Title Company upon closing of the sale or transfer.
The tax withholding is calculated as 8% of “Total Payment” for nonresident individuals and 8.25% of Total Payment for nonresident entities. The Total Payment is equal to the Total (Gross) Sales Price less:
- Mortgage or other lien on the property being paid upon the sale or exchange of the property; and
- other expenses arising out of the sale or exchange of the property and disclosed on a settlement statement prepared in connection with the sale or exchange.
The expenses must be disclosed on the settlement statement prepared by the Settlement or Title Company.
There are several exemptions under Maryland Tax Law, and you should consult your Certified Public Accountant or tax professional before selling real estate in Maryland. If you are a Realtor, you should prepare your client for this possibility and refer them to a CPA or licensed tax professional.
If a nonresident seller is exempt from the tax withholding, the settlement or title company must be provided a Certificate of Exemption from Maryland prior to closing. The title company is collecting the tax withholding and must send the money to Maryland upon closing if the certificate is not provided prior to closing.
For additional information about this tax, your resident status, and more you can refer to the Comptroller’s Web site at www.marylandtaxes.gov or by calling 1-800-MDTAXES (1-800-638-2937) or 410-260-7980 in Central Maryland.
NOTE and DISCLAIMER: This is not intended to be legal or tax advice, and you should not treat it as such or rely on the information contained in this article when making any legal or tax decisions. Consult a licensed Maryland attorney or a licensed Certified Public Accountant before making any decisions concerning the sale of real estate regardless of jurisdiction.
Allen Williams, Esq.
Managing Attorney, Capitol Hill
UniversalAgent ONE APP
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