3.3 Maryland Property Rights and Ownership

Forms of Ownership

Tenancy in severalty is ownership by one person or one entity — full control, and at death the interest passes through the estate (no survivorship).

Maryland recognizes three co-ownership forms:

Joint Tenancy

A Maryland joint tenancy requires the four unities — unity of time, title, interest, and possession — and the deed must expressly state 'joint tenants' or include survivorship language. Without that language, co-owners are presumed tenants in common. If one joint tenant conveys their share, the unity of time and title breaks and the joint tenancy is severed as to that share, which becomes a tenancy in common interest.

Tenancy by the Entirety

Available only to married couples, this form gives each spouse the whole estate. Its hallmark benefit on the exam: a creditor of only one spouse generally cannot reach the property to satisfy that spouse's individual debt. It carries automatic survivorship and can be severed only by death, divorce, or the joint act of both spouses — never unilaterally. On divorce, an entirety estate typically converts to a tenancy in common.

Trap: Two unmarried partners cannot hold by the entirety. If they want survivorship, they must use joint tenancy with the correct language.

Marital Property: Equitable Distribution

Maryland is an equitable-distribution state, not community property. On divorce a court divides marital property (generally property acquired during the marriage) in a way it deems fair, which is not automatically 50/50. Property owned before marriage, or received by gift or inheritance, is usually non-marital and stays with the owning spouse.

Homestead Property Tax Credit

The Homestead Property Tax Credit limits how much of a rise in assessed value can be taxed on an owner-occupied principal residence. The state cap is 10% per year; counties and municipalities may set lower caps. It is a credit on the assessment growth, not an exemption from property tax, and a homeowner files a one-time application with SDAT.

Easements and Adverse Possession

Adverse possession in Maryland requires 20 years of possession that is A-O-N-E-H-C: Actual, Open, Notorious, Exclusive, Hostile (without permission), and Continuous. A prescriptive easement uses the same 20-year test but grants only a right to use, not ownership.

Worked example: A neighbor parks on the edge of an adjacent lot, visibly and without permission, from 2004 to 2024 (20 years, uninterrupted). That open, hostile, continuous use can ripen into a prescriptive easement to keep using that strip — but it does not transfer title unless the stricter exclusive-possession adverse-possession test is also met.

Restrictive Covenants and Encumbrances

Beyond easements, Maryland property is often burdened by restrictive covenants — private deed restrictions that limit how land may be used (architectural rules, setback minimums, single-family-only clauses).

A covenant that would violate fair housing law (for example, an old racial restriction) is void and unenforceable, even if still written in the deed. Maryland law also allows homeowners to have such offensive language stricken from the records.

Liens and Priority

An encumbrance is any claim that affects title — easements, covenants, mortgages (deeds of trust), tax liens, and judgments. Liens generally take priority by recording date, with one big exception: property tax liens take priority over earlier-recorded private liens. The exam often pairs this with the recording rule from 3.4: first to record wins, except where statute elevates a government lien.

Severance of Joint Tenancy — Worked Example

Three siblings own a lot as joint tenants. One sibling deeds her one-third interest to a friend. That conveyance breaks the unities of time and title for that share, so the friend becomes a tenant in common owning one-third, while the remaining two siblings stay joint tenants with each other as to the other two-thirds. If a sibling then dies, her share passes to the surviving joint-tenant sibling, not to the tenant-in-common friend.

Homestead Credit — Worked Example

A principal residence assessed at $200,000 jumps to $240,000 (a 20% rise). With the state 10% Homestead cap, only a 10% increase in assessment is taxable that year — the homeowner is taxed as if the assessment rose to $220,000, not $240,000. The credit phases the rest of the increase in over later years.

Exam tip: The Homestead Credit limits assessment growth, it is not a flat exemption and it does not eliminate property tax.