A power of attorney (POA) is a legal document authorizing one person (the agent or attorney-in-fact) to act on behalf of another person (the principal) in specified matters.

When it comes to transferring real property, a valid, notarized, and recorded power of attorney gives the agent the authority to sign all necessary documents in place of the principal.

The Maryland 60-Hour Course explains this under “Transfer of Title,” emphasizing that all signatures must be properly acknowledged to be legally enforceable, and the power of attorney must be recorded with the deed.

A key tax advantage of owning income-producing real property is depreciation , which allows investors to deduct a portion of the property’s cost basis (excluding land) over its useful life for tax purposes. This non-cash expense can shelter rental income and reduce taxable income. By contrast, insurance expenses and transfer taxes are ordinary expenses/costs (not advantages), and taxable gains are a potential liability upon disposition, not a benefit.

Under Maryland agency law, a real estate licensee represents a client —the party with whom the licensee has an express, written brokerage agreement . A customer is an unrepresented party who may receive ministerial acts and required disclosures but is not owed fiduciary duties of representation. Who pays compensation does not determine representation; the written agreement does.

The agency module explains that agency may be created by express agreement (written or verbal) or by implication through conduct . When parties act as if an agency relationship exists —for example, a licensee regularly advising and assisting buyers without a signed agreement—this can form implied agency . Because no express (written or oral) agreement exists in this scenario, the relationship described is implied agency , created by the parties’ behavior and course of dealings .

The course teaches that residences built prior to 1978 may contain lead-based paint , which poses health risks—particularly to children and pregnant individuals. Federal law requires the Lead-Based Paint Disclosure for most pre-1978 housing, plus delivery of the EPA pamphlet and opportunity for lead evaluation. Maryland materials reinforce these requirements and Maryland-specific lead rules for certain rentals.

When an agency relationship ends (expiration, completion, mutual agreement, or termination), certain duties survive : chiefly confidentiality (protecting client confidences and motivations) and accounting (proper handling and return of money, keys, and documents; final accounting for trust funds). Duties such as loyalty and reasonable skill and care do not continue after termination.

References (Maryland Pre-Licensing Core Content):

Maryland 60-Hour Course: “Maryland Agency Law” (scope of fiduciary duties; duties that survive agency termination).

COMAR 09.11.02 (confidentiality and accounting obligations).

In the “Real Property and the Law” segment, the course distinguishes between real property (land, improvements, and appurtenances) and personal property (movable items not affixed to land). Emblements —also called fructus industriales —are annually cultivated crops (e.g., corn, wheat, vegetables) produced through tenant labor and industry . These are treated as personal property belonging to the person who planted them, typically the tenant, even if the crops mature after the tenancy ends. By contrast, fructus naturales (e.g., trees, shrubs, perennial plants) are part of the land and therefore real property until severed.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Real Property and the Law” (Real vs. personal property; fructus industriales/emblements vs. fructus naturales).

Under Section 1031 of the Internal Revenue Code, an investor may defer recognition of capital gains taxes by exchanging one investment or business property for another of like kind.

This is known as a 1031 tax-deferred exchange.

The Maryland pre-licensing course covers this as a financing and investment concept, explaining that it defers, not eliminates, the tax obligation and that investors must comply with strict timelines and rules set by the IRS.

Licensees should avoid offering tax advice but can inform clients of the potential to explore this option with a qualified tax professional or attorney.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Investment and Taxation Concepts section.

– Internal Revenue Code §1031 (Like-Kind Exchanges).

Under Maryland’s Code of Ethics and Professional Conduct, licensees must act with honesty, integrity, and reasonable skill and care.

If a licensee lacks experience in a specialized area, they must disclose that fact to the client and either refer the client or seek assistance from a qualified professional—with the client’s informed consent.

By being transparent and collaborating with an experienced commercial broker, Manny fulfills his ethical obligation of competence and disclosure while protecting his client’s interests.

Reference (Maryland Source):

– Maryland 60-Hour Principles and Practices Course, Ethics and Professional Conduct section.

– COMAR 09.11.02.01 – Code of Ethics for Real Estate Licensees.

– Business Occupations and Professions Article §17-322.

In Maryland-specific coverage within “Leases and Property Management,” the course explains ground leases and the unique Maryland concept of ground rents . A redeemable ground rent permits the leasehold owner (tenant) to redeem —that is, buy out —the ground rent interest by paying a statutory redemption amount, thereby merging the leasehold and reversionary interests and effectively ending the ground rent. This contrasts with irreedeemable/irretrievable arrangements (not permitted for new creations under current Maryland law) where no buyout right exists.

References (Course Outline/Study Topics): Maryland 60-Hour Principles and Practices of Real Estate — “Leases and Property Management” (Ground leases and Maryland ground rents; redeemable ground rent concept and tenant redemption).