32 A.3d 174
Md. Ct. Spec. App.2011Background
- GBMC owned land adjacent to its hospital campus and financed a new medical office building and parking garage via a Ground Lease with BHI LLC and an Improvements Lease back to GBMC.
- BHI LLC held title to the improvements during the leaseback; GBMC remained the record owner of the land and, per the leases, GBMC would later retain ownership after term expiration.
- Financing was structured to avoid GBMC debt on its financial statements; funds were provided by Legg Mason Mortgage Capital Corporation, with a Construction Escrow and Security Agreement.
- GBMC and BHI LLC executed unrecorded agreements and recorded a Memorandum of Lease, a Ground Lease, an Improvements Lease, a Reciprocal Parking Easement, and a Leasehold Deed of Trust (the latter recorded), creating a complex ownership/possession framework.
- SDAT’s records and a land-records printout listed GBMC as owner of the land and Improvements; the Supervisor argued BHI LLC owned the Improvements for tax purposes under various unrecorded and recorded documents.
- The Maryland Tax Court held GBMC was the record owner of the Improvements for real property tax purposes and thus entitled to a charitable exemption; the Supervisor sought judicial review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GBMC or BHI LLC owned the Improvements for tax purposes | GBMC contends record title controls ownership; lease documents do not transfer title. | Supervisor argues BHI LLC owns the Improvements under recorded/unrecorded instruments and TP 6-102(d)(3) exception. | GBMC owns the Improvements; record title controls for tax purposes. |
Key Cases Cited
- Mayor & City Council of Baltimore v. Boitnott, 356 Md. 605 (1999) (owner means legal title for real property taxation)
- Johns Hopkins Univ. v. Bd. of County Comm’rs of Montgomery County, 185 Md. 614 (1946) (record owner governs real property tax assessments)
- Meade Heights, Inc. v. Tax Comm’n, 202 Md. 20 (1953) (Meade Heights tax on leasehold under government lease; relevance to ownership concept)
- Springhill Lake Investors Ltd. P’ship v. Prince George’s County, 114 Md.App. 420 (Md. App. 1997) (deeds of trust and title concepts; lessee-tax implications)
- Allentown Plaza Assocs. v. Suburban Propane Gas Corp., 43 Md.App. 337 (1979) (improvements fixed to land pass with land title)