Legal Question in Real Estate Law in Maryland
Deed Recordation before Disbursement
If I show up to a real estate settlement as the seller and the purchasers refuses to disburse the settlement proceeds until the deed is recorded first(several days after signing and delivering it), but there is no contingency in the contract for this, am I in breach by not going along with this new condition precedent? Are the purchasers in breach for trying to force this new, extra-contractual condition instead of just following the contract and disbursing simulateous to the signing and delivery of the deed? Also, the contract is silent regarding who should ''go first'', when it comes to disbursing the money (handing the check), or signing and delivering a deed.
2 Answers from Attorneys
Re: Deed Recordation before Disbursement
This is not the usual practice; most title attorneys disburse to the seller at the settlement table after the deed is signed. Maryland law requires that the settlement funds be "at the table", which means the loan amount and any funds required from the borrower must be brought to the settlement. The reason the title attorney may be trying to delay giving you your proceeds is that he/she may be concerned about some issue that would prevent recording of the deed. You should try and find out what the problem is. But unless the contract provides otherwise, you should get your proceeds at settlement.
Re: Deed Recordation before Disbursement
Typically, the seller signs all the necessary paperwork, the buyer signs a number of other documents and then funds are disbursed immediately. Any other type of settlement is called a "dry settlement."It is highly unusual that the deed be recorded before funds were disbursed. As a seller, I would refuse to do this unless I had clear recourse if funds aren't properly disbursed.
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