Disposition Process

The vast majority of the parcels for sale are owned by State Highway Administration (SHA) and are govern by the Transportation Article, Section §8-309 of the Annotated Code of Maryland.
A State owned parcel may be identified by the private sector or at the staff level as a good candidate for disposition. You, as our customer, may identify such a property.
Upon inquiry, staff will examine the status of the property to determine if the property has been purchased for a future project or if there are clear and over-riding reasons for the State to retain ownership.
Properties that are candidates for disposition will undergo an internal clearance process. The parcel information will be distributed to the engineering and planning staff within the modal administration for review. The result of the review could be a decision to retain the property or to allow it to advance to the next stage for disposition.
A parcel that has been recommended for disposition by the modal administration will have two possible scenarios:

Non-stand-alone parcels can enter into a negotiated sale with an adjoining property owner for the value determined by an appraisal commissioned by the State.
Stand-alone parcel can enter into a public auction sale based on an appraisal as above.

External Clearance involves a County Clearance or State Clearinghouse Process.

The land is made available for use by the State, a county or municipality for any transportation purpose or other public purposes.

A property emerging from the County or State Clearinghouse Process must next be offered to the original owner, heirs, or assigns. This is known as Prior Owner Notice.

In some cases, the original owner, heirs, and/or assigns cannot be located, and the State shall advertise and post the property in the newspaper. By statute, the prior owner must exercise their rights within eight months after the Administrator provides the notice that the land is available.

Once the Prior Owner Notice has expired or the State has obtained a waiver from the Prior Owner, the Office of Real Estate and Economic Development will proceed to market the property for the purpose of generating interest in a forthcoming auction. This is done in a multi-faceted approach that includes: Web site advertising, direct solicitation, and signage.
The auction will be conducted on site. Requirements for participation include:

Presentation of a cashier`s check as indicated in the auction notice.
The bidder must register with the disposition agent prior to the bidding. It is advisable that bidders arrive at least 30 minutes prior to the auction to permit time to register, walk the property and/or talk with disposition agents prior to the formal auction.
The Auctioneer will discuss the site and auction process just prior to the bidding process. Questions and answers about the property will be permitted within timeframe.
The Auctioneer will begin the bidding at a value lower than an acceptable level and continue in pre-determined increments above a minimum threshold for the auction to be deemed "successful."
If the auction finishes at a value lower than the threshold, the auction will end with no bid that can be recommended for acceptance.

Auction "success" is based upon the bid price reaching a value that exceeds the threshold by a qualified bidder.
If the auction fails to meet the threshold amount OR the Modal Administrator rejects the prevailing bid, a second auction on the property will be conducted. The second auction generally takes place within six months of the first auction on same terms and in the same manner as the original sale.
If the outcome of the second auction is unsuccessful, the State may enter into a negotiated sale of the land. If the Board of Public Works approves the negotiated sale and the deed, the State may execute a deed conveying the land to the buyer.

Clearance & Disposition Process

The disposal of State-owned property is governed by Transportation Article §8-309 and State Finance & Procurement Article §10-305 of the Annotated Code of Maryland. These properties are typically acquired by SHA for a Transportation purpose such as the construction or widening of roads. The premise of the above statutes is to return unneeded land back to the tax rolls, and make that land available for County/ Municipality or public use.

The general process for disposing extra land is as follows:

Upon initial inquiry, Real Estate staff will send out an Internal Clearance to various engineering offices to determine if an extra land parcel has disposal potential. SHA will then make a determination as to whether or not to declare the parcel excess. In some cases, it may be retained for wetland mitigation or a future roadway project.
If the land Is deemed excess, it will move on to the Modal, County and State Clearinghouse processes. The Modal clearance allows MDOT's modal units to acquire for their needs, whereas County and State Clearinghouse allow the local jurisdictions an opportunity to acquire for a public purpose. An independent appraisal is usually procured at this point to determine market value.
If the property is determined to be a standalone buildable lot, it will go through an additional clearance known as Prior Owner. In this case, the former owner, heirs, or assigns (from which SHA acquired the property) have a right to re-purchase. The prior owner must exercise their rights within eight months after ORED provides notice that the land is available. Once the Notice has expired or a waiver of rights received, RES will proceed with preparing the property for a public auction.
If the appraisal determines that the property is landlocked, SHA can negotiate a sale with the adjoining owner (based on the appraised value). In the case where there are multiple adjoining owners, it would go through a sealed bid process.

By statute, adjoining owner sales require final approval by the BPW, whereas auction sales require the respective Modal Administrator's approval.

If you would like to speak directly with a team member, please visit the Contact Us page for more information.