Customary But Improper Legal Fee Charges

In a decision reversing the Circuit Court and Court of Special Appeals, the Maryland Court of Appeals reached a decision with respect to legal fees charged in foreclosure sales:

We hold that , in the absence of specific authority in the contract of indebtedness or contained in statute or court rule, it is an impermissible abuse of discretion for trustees or the lenders who ‘bid in’ properties to include the demand for additional legal fees for the benefit of the Trustees in the advertisement of sale, or in any other way, in that it is contrary to the duty of trustees to maximize the proceeds of the sales, and, moreover, is not in conformance with state or local rules and… is against public policy.

The court noted that the practice of charging for such fees was, prior to its decision, the customary practice in Maryland foreclosure sales. (Mike Frisch)