Eagle Title takes a hands-on approach to every transaction with the goal of a smooth, successful settlement. Some can be more complicated than others and have lasting challenges. A builder and their investor were financing a new project in Southern Maryland. The builder’s lender was a Virginia Bank unfamiliar with the nuances and intricacies of Maryland recording tax on newly secured debt. The goal was to settle, all at one time, loans for development, construction, and a letter of credit for bonding, and receive IDOT treatment on recording taxation. IDOT treatment means that a qualifying loan where the party borrowing the money was different from the party owning property securing the loan – in those cases, the loan is not subject to recordation tax if it is under 3 million.
The lender structured the loans individually, and against our advice conflated the loans in the loan agreement, leading to the clerk taking the position that the loans were all taxable – with the necessary amount of recording tax over $65,000. Our team was able to speak to all the parties and delay recording the construction loan. This allowed us to prove to the jurisdiction that the three loans were independent of each other and eligible for IDOT treatment. The net result—the builder saved $65,000.