Stop Costly Disputes: Maryland Business and Real Estate Policies That Prevent Problems

Why Prevention Beats Litigation

Many Maryland business and real estate disputes stem from unclear expectations, missing procedures, or noncompliance with state or local requirements. Well-designed policies make processes predictable, reduce ambiguity, and create documentation that can resolve issues early or deter escalation.

Maryland courts support early resolution through mediation and arbitration where appropriate (Maryland Judiciary ADR resources; Maryland Uniform Arbitration Act, CJP § 3-206). Litigation commonly follows the American Rule on attorneys’ fees—parties generally pay their own fees unless a contract, statute, or rule provides otherwise (Maryland People’s Law Library: Attorneys’ Fees). Clear contracts and internal procedures can help avoid those costs.

Core Policies for Maryland Businesses

• Governance and recordkeeping: Adopt or refresh operating agreements (LLCs) or bylaws (corporations), meeting minutes procedures, officer/manager role descriptions, and decision-authority matrices. Keep SDAT registrations and resident agent information current and maintain good standing (SDAT: Maintain Good Standing).
• Contract lifecycle management: Use standardized templates with clear scope, pricing, change orders, milestones, acceptance criteria, indemnities, limitations of liability, and dispute-resolution clauses (including mediation or arbitration where appropriate under CJP § 3-206). Track versions, obligations, and renewal dates.
• Employment and contractor policies: Use compliant offer letters, at-will disclaimers where appropriate, wage/hour and overtime procedures, anti-harassment and EEO policies, accommodations processes, and clear independent-contractor criteria aligned with Maryland and federal standards.
• Data governance: Implement written information security policies, access controls, vendor due diligence, and incident response plans consistent with Maryland’s Personal Information Protection Act (see Com. Law § 14-3503).
• Compliance management: Assign ownership, use checklists for required registrations, licenses, annual reports, and taxes, and calendar periodic filings required by Maryland agencies (SDAT Business Services).

Essential Real Estate and Leasing Policies

• Due diligence protocols: Use checklists for title, survey, zoning/land use, environmental screening, and lease/tenant estoppel reviews before acquisitions or financing. For environmental issues, see the Maryland Department of the Environment’s resources (MDE Land & Property).
• Leasing standards: Use clear lease forms addressing maintenance and repair allocations, utilities, common-area rules, insurance requirements, rent-increase mechanics, default and cure procedures, and dispute-resolution paths.
• Property management procedures: Establish written processes for inspections, work orders, vendor selection, service-level expectations, and documentation of tenant communications.
• Security deposit handling: Segregate deposits, document deductions with itemized statements, and follow Maryland-specific rules on maximum deposit, handling, interest, and timely return (Real Prop § 8-203; see also Maryland OAG Landlord–Tenant).
• Notice and communication: Use written notices with delivery methods specified in leases and maintain proof of service. Consistency and documentation often lead to early resolution.

Maryland Compliance Touchpoints That Commonly Trigger Disputes

• Business formation and annual maintenance: Form with the Maryland State Department of Assessments and Taxation (SDAT), keep resident agent information current, and file required annual reports and returns to remain in good standing (SDAT Business Services; SDAT: Maintain Good Standing).
• Licensing and permits: Confirm state and local licensing for regulated activities (e.g., contractors, property managers, and certain professional services). Local requirements vary.
• Landlord–tenant requirements: Follow Maryland residential leasing rules, disclosures, security deposit handling, and court procedures for evictions (OAG Landlord–Tenant; Maryland Judiciary Landlord/Tenant Self-Help).
• Real property disclosures (sales): Provide the residential property disclosure or disclaimer statement when required (Real Prop § 10-702).
• Fair housing compliance: Implement training and uniform procedures to avoid discriminatory practices under federal and Maryland fair housing laws (see the Maryland Commission on Civil Rights).

Contract Clauses That Reduce Litigation Risk

• Choice of law and forum: Specify Maryland law and a clear venue or arbitration forum, as appropriate. Arbitration clauses are recognized under Maryland’s Uniform Arbitration Act (CJP § 3-206).
• Notice and cure: Include structured timelines and methods for addressing alleged breaches before escalation.
• Mediation or arbitration: Consider tiered dispute resolution to promote early settlement (Maryland Judiciary ADR).
• Integration and amendment: State that the written contract is the full agreement and require signed amendments.
• Attorney’s fees: Clarify fee-shifting terms consistent with Maryland law’s general American Rule framework (People’s Law Library: Attorneys’ Fees).

Security Deposits and Evictions: Maryland-Specific Caution

Maryland law sets specific rules for residential security deposits, including limits, required handling, interest, and itemized deductions/return (Real Prop § 8-203). Evictions require proper filings and court process (Maryland Judiciary Landlord/Tenant), and substantive rules vary by ground—e.g., failure to pay rent (Real Prop § 8-401). Requirements may change and can vary by locality; always confirm current state and local guidance before acting.

Corporate Housekeeping to Preserve Limited Liability

Maintain separate bank accounts, avoid commingling funds, document major decisions, and keep up with Maryland annual reports and taxes. Loss of SDAT good standing or forfeiture for noncompliance can cause operational disruptions (SDAT: Maintain Good Standing) and has statutory consequences (Corps. & Ass’ns § 3-503).

A Practical Rollout Plan

• Risk assessment: Identify recurring issues in operations, contracts, leasing, and compliance.
• Policy drafting: Start with high-impact policies (contract templates, notice/cure steps, security-deposit handling, and annual compliance calendars).
• Training: Provide short, role-specific training and quick-reference checklists.
• Audit and updates: Review policies periodically and after major legal or business changes.
• Documentation: Centralize storage, version control, and access permissions for all policies, contracts, and notices.

Ready to reduce disputes before they start? Contact our team for a Maryland-specific plan.

Disclaimer: This blog is for general informational purposes only and is not legal advice. Maryland laws and local ordinances change and apply differently to specific facts. Consult a Maryland attorney about your situation.