What does transferring your lease mean?
A legal lease transfer can be used in two situations:
- To transfer the lease to a new party entirely
- To add a new co-leaseholder to a lease or remove an existing co-leaseholder
When a lease is transferred entirely to a new party (assignee), the previous leaseholder (assignor) relinquishes all interest in and bears no further responsibility for requirements associated with the lease, as of the date of execution of the transfer by the Department. When the lease transfer process is used to add or remove a leaseholder, at least one existing leaseholder remains named on the lease after the transfer is processed. The latter case typically involves adding a family member, such a spouse or child, business partner, or business entity.
Upon lease transfer, the term of a lease does not change. The assignees named on the transfer document assume the current term of the lease. Likewise, the Department does not issue a new lease agreement in conjunction with a lease transfer. The most recently executed lease agreement or lease renewal agreement, together with any subsequent executed lease transfers, comprise the legal record of the leasehold. Therefore, the assignee should ensure that they receive a copy of all relevant lease documents from the assignor during the transfer process, and have a full understanding of the term end-date and whether a lease renewal opportunity remains.
It is also important to understand that a lease transfer is not legally completed or recognized by the State until a signed and notarized lease transfer form is executed by the department. Until that date, the current lessee remains responsible for all lease responsibilities, including reporting.
Why transfer a lease?
Ending Lease Operations
If a lease is no longer wanted, a leaseholder may surrender the lease to the department in writing, at which time it would be terminated. Alternatively, a leaseholder may request approval from the department to transfer a lease to another party for the remainder of its term.
Flexibility & Continuity
The primary leaseholder, an administrative designation for the first lessee named on a lease, MUST hold a Shellfish Aquaculture Harvester Permit (SAHP) for the purposes of managing the lease and its Registrants in accordance with
Code of Maryland Regulations (COMAR) 08.02.23.04. Co-leaseholders who intend to engage in aquaculture activities must also apply to be Permittees. Permittees are exclusively responsible to sign and submit monthly harvest reports, manage SAHP Registrants and supervise work performed on the lease area. Thus, having more than one Permittee for a lease extends additional flexibility in meeting these lease management responsibilities.
In the event of a primary lessee’s death or business dissolution, any co-lessee(s) named on the lease will assume the remainder of the current term of and all obligations associated with the lease, including but not limited to annual rent and reporting.
If no co-lessee is named, a lease will automatically revert back to the State upon a sole leaseholder's death. A shellfish lease is not inheritable and cannot be passed down to next of kin through a will or estate. The addition of one or more co-leaseholders can offer some assurance of lease continuity. Because business partnerships or family relationships may change over time, the transfer process may also be utilized to remove a co-leaseholder by notarized signature of all parties.
How to request a lease transfer:
Please print, complete, and return the
"Request to Transfer Form" to the Aquaculture Division following the instructions provided on the form. You may submit the form electronically to
aquaculture.dnr@maryland.gov, by fax to (410) 260-8310 or in hard copy to:
Maryland Department of Natural Resources
Attn: Aquaculture Division – Transfer Request
580 Taylor Ave., E-4
Annapolis, MD 21401
Upon receipt of the request, department staff will review the form for accuracy and completeness, and verify that the lease is in good standing and eligible for transfer. This verification process includes a review of the complete lease file/history and of any relevant business documentation provided with the request by the assignee.
Lease transfer requests received after October 1st may be held until annual invoicing and reporting for the calendar year has concluded.
If a transfer request is valid, the department will draft a set of personalized transfer forms based on the lease record and the information provided in the request. The department will send all forms required to complete the transfer in a single “packet” to the current primary leaseholder/assignor.
Please allow up to 4 weeks processing time to receive these documents via electronic mail from the time a complete request, including any applicable supporting business documents, is submitted. Hard copies can also be mailed upon request, but may add additional time for delivery.
A lease transfer packet may include all of the following:
- Cover letter
- Instructions for Transfer document
- Personalized lease transfer form
- Partial-year usage form (unless waived)
- Application for the Transfer a Commercial Shellfish Aquaculture Lease
- Shellfish Aquaculture Harvester Permit Application
- Harvester Education Guide
- Shellfish Aquaculture Harvester Verification and Signature Form
- Summer Landing Declaration Form
It is the assignor’s responsibility to ensure that the documents contained in the transfer packet are completed by the appropriate parties and submitted back to the department in a timely fashion.
The personalized transfer form must be returned in hard copy with all original signatures and notarization stamps/emblems together on a single copy of the document. All other forms associated with the transfer may be scanned and returned electronically, if desired. The notarized transfer form is subject to legal review prior to execution by the department.
Questions?
Please refer to the following references for additional guidance and/or answers to many commonly asked questions about shellfish lease transfers:
You may also contact Pete Grasso at 410-260-8652 or peter.grasso@maryland.gov if you have any questions regarding transfers or the status of a request.
