MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
FROM: Grace Nakamura, Working Associate, Real Estate Practice Group, Calderwood & Harkness LLP
TO: Douglas Fairchild, Responsible Partner; Cynthia Ho, Lead Associate; Angela Fontaine, Billing Partner
CC: Theresa M. Calloway, General Counsel, Fairwater Real Estate Investment Trust
DATE: December 12, 2025
RE: Title Commitment Review — Harbor Point Towers Development Site, 1500–1580 Wills Street, Baltimore, MD 21231 (Block 7419, Lots 1–6, Baltimore City)
CLIENT: Fairwater Real Estate Investment Trust
MATTER: Harbor Point Development JV, LLC — Institutional JV Development
TITLE COMMITMENT NO.: TWI-2025-048731
EFFECTIVE DATE OF COMMITMENT: December 9, 2025
TITLE INSURER: Tidewater Insurance Group, Inc., 9100 Greenspring Avenue, Lutherville, MD 21093
I. EXECUTIVE SUMMARY
This memorandum presents our review and analysis of the title commitment (the "Commitment") issued on December 9, 2025, by Tidewater Insurance Group, Inc. ("Tidewater") under Commitment No. TWI-2025-048731 for the approximately 8.2-acre waterfront development site located at 1500–1580 Wills Street, Baltimore, Maryland 21231, identified as Block 7419, Lots 1–6, in the records of Baltimore City (the "Property"). This review has been prepared in connection with the pending acquisition and development of the Property as more fully described herein.
Transaction Background. As the team is aware, Fairwater Real Estate Investment Trust ("Fairwater") is forming a joint venture with Prescott Capital Partners, LP ("Prescott") through Harbor Point Development JV, LLC, a Delaware limited liability company ("HP JV" or the "JV"), to acquire the Property from Harbor East Land Holdings, LLC, a Maryland limited liability company ("HELH"), of which Vincent A. DeLuca is the sole member. The negotiated purchase price is Fifty-Four Million Dollars ($54,000,000). The total capitalization of the joint venture is approximately Two Hundred Forty Million Dollars ($240,000,000), and the planned development — "Harbor Point Towers" — consists of two twenty-eight (28)-story residential towers comprising approximately 610 residential units together with approximately 45,000 square feet of ground-floor retail space. The total estimated project cost is Five Hundred Seventy-Six Million Dollars ($576,000,000).
Policy Structure. The Commitment contemplates the issuance of an ALTA Owner's Policy (2006 form, as amended) in the initial amount of $54,000,000 to HP JV at land acquisition, with the expectation that endorsements will be issued to increase coverage to $576,000,000 upon project completion through a pending disbursement mechanism coordinated with the construction loan draw schedule. The Commitment will also serve as the basis for the lender's title insurance policy required by Meridian National Bank, N.A. ("Meridian") in connection with its $336,000,000 construction loan facility, the closing of which is currently targeted for February 15, 2026.
Target Closing Dates. The land acquisition closing is targeted for January 30, 2026. The construction loan closing with Meridian is targeted for February 15, 2026.
Overall Assessment. Based on our review, title to the Property is insurable. However, several Schedule B exceptions require curative action, negotiated endorsements, or further investigation prior to the land closing. None of the identified issues appear to be fatal to the transaction, but certain items — particularly the utility easement encroachment on Lot 3, the outstanding deed of trust in favor of Crowne Albany Savings Bank, and the need for a thorough review of the recorded Declaration of Covenants, Conditions, and Restrictions — must be addressed promptly to maintain the current closing timeline.
Key Action Items. The following items require immediate attention and are discussed in detail in the body of this memorandum:
1. Existing Deed of Trust (Crowne Albany Savings Bank): Must be released and satisfied of record simultaneously with or prior to closing. Payoff letter required.
2. Utility Easement Encroachment (Lot 3): The electric utility easement recorded against Lot 3 appears to encroach into the planned building footprint of Tower A. Relocation or affirmative endorsement coverage is required prior to construction loan closing.
3. Outstanding Municipal Liens: All real property taxes and assessments must be confirmed current through the closing date and prorated per the terms of the Purchase and Sale Agreement.
4. CC&Rs Review: The recorded Declaration of Covenants, Conditions, and Restrictions must be obtained and analyzed for potential use conflicts with the planned mixed-use residential and retail development.
5. Survey Coordination: The ALTA/NSPS survey delivered December 3, 2025, by Calvert Surveying & Engineering, Inc. must be confirmed as certified to Tidewater and cross-referenced against all Schedule B easement exceptions.
6. Entity Authority Documentation: Formation documents, good standing certificates, and authorizing resolutions for the JV and its members must be assembled and delivered.
The specific recommendations for each item are set forth in detail in Sections IV through VIII below.
II. DESCRIPTION OF THE PROPERTY
A. Legal Description
The Property consists of six (6) contiguous lots identified as Block 7419, Lots 1 through 6, inclusive, in the Land Records of Baltimore City, Maryland. The street address is 1500–1580 Wills Street, Baltimore, Maryland 21231. The total acreage of the Property, as confirmed by the ALTA/NSPS Land Title Survey dated December 3, 2025, prepared by Calvert Surveying & Engineering, Inc. (the "Survey"), is approximately 8.2 acres.
The six lots were historically assembled by prior owners over a period spanning from 2003 to 2016 and together constitute a unified development parcel. The legal description set forth in Schedule A of the Commitment describes the Property by metes and bounds, referencing the Baltimore City land records for the boundaries of each constituent lot. A review of the metes and bounds description in the Commitment reveals that it is consistent in all material respects with the Survey, though certain bearing calls in the Commitment description use a slightly different reference meridian than that employed by Calvert Surveying.
Recommendation: We recommend that, upon issuance of the final owner's policy, Tidewater substitute the surveyor's metes and bounds description prepared by Calvert Surveying & Engineering, Inc. for the legal description currently set forth in the Commitment. This substitution will ensure consistency between the policy, the Survey, and the deed of conveyance. We have communicated this request informally to Tidewater's title officer and understand that Tidewater will accept the surveyor's description provided that it is accompanied by a surveyor's certification in the form required by Tidewater. We will follow up with Calvert Surveying to confirm availability of the required certification.
B. Current Fee Owner
The Commitment identifies the current fee owner of all six lots comprising the Property as:
Harbor East Land Holdings, LLC, a Maryland limited liability company
Sole Member: Vincent A. DeLuca
Address: c/o Vincent A. DeLuca, 700 Aliceanna Street, Suite 100, Baltimore, Maryland 21202
The vesting instruments for each of the six constituent lots, as reflected in the Commitment, are as follows:
We have not independently performed a full chain-of-title examination for each lot beyond the vesting instruments identified in the Commitment. The title insurer's examination is presumed to cover the standard sixty-year search period under Maryland practice. However, given the lot assembly history and the multiple grantor entities involved, we recommend confirming with Tidewater that a full and complete chain-of-title search was performed for each lot individually and that no gaps, breaks, or defects in the chain were identified.
Additionally, we note that Vincent A. DeLuca, as the sole member of HELH, will need to execute or authorize the execution of the deed and all ancillary closing documents on behalf of HELH. We recommend obtaining a certified copy of HELH's Articles of Organization (as filed with the Maryland State Department of Assessments and Taxation ("SDAT")) and Operating Agreement to confirm that Mr. DeLuca has the sole authority to act on behalf of HELH in connection with the conveyance of the Property. An authorizing resolution executed by Mr. DeLuca in his capacity as sole member should also be obtained. These items are also listed as requirements under Schedule B-I of the Commitment, as discussed in Section IV below.
C. Proposed Insured
The Commitment identifies the proposed insured as follows:
Owner's Policy: Harbor Point Development JV, LLC, a Delaware limited liability company
Proposed Policy Amount: $54,000,000 (at acquisition), to be increased to $576,000,000 upon project completion via pending disbursement endorsement
Lender's Policy (separate): Meridian National Bank, N.A., as lender under the $336,000,000 construction loan facility (to be addressed in connection with the construction loan closing, currently targeted for February 15, 2026)
The owner's policy will be issued to HP JV as the acquiring entity. The Commitment does not currently reference the lender's policy, which will be the subject of a separate commitment or an amendment to this Commitment, to be coordinated with Meridian's counsel. We anticipate that Tidewater will issue the lender's policy as an endorsement to or in connection with the owner's policy, reflecting the construction loan deed of trust to be recorded at the construction loan closing.
III. SCHEDULE A ANALYSIS
A. Commitment Terms
The principal terms of the Commitment, as reflected in Schedule A, are as follows:
Effective Date: December 9, 2025
Commitment Number: TWI-2025-048731
File Reference: Tidewater File No. BAL-2025-14792
Amount of Insurance: $54,000,000.00 (Owner's Policy)
Type of Policy: ALTA Owner's Policy of Title Insurance (2006 form, as amended June 17, 2006, and as further amended)
Proposed Insured: Harbor Point Development JV, LLC, a Delaware limited liability company
Estate or Interest to be Insured: Fee Simple
The Commitment expires by its terms six months from the effective date (i.e., June 9, 2026), subject to extension by Tidewater upon request and payment of any applicable extension fees. Given the land closing target of January 30, 2026, the Commitment should remain in effect throughout the anticipated closing timeline. However, if any delays arise that push the closing beyond early June 2026, we will need to request an extension from Tidewater.
B. Vesting
Schedule A of the Commitment confirms that fee simple title to all six lots comprising the Property is currently vested in Harbor East Land Holdings, LLC. We have reviewed the vesting instruments referenced in the Commitment (as set forth in the table in Section II.B above) and confirmed that each lot was conveyed to HELH by special warranty deed. No gaps in the vesting chain have been identified for any of the six lots based on the information in the Commitment.
As noted above, the lot assembly occurred over a thirteen-year period (2003 to 2016) involving three different grantor entities. We recommend that Tidewater confirm the following with respect to the lot assembly history:
(a) That each grantor in the chain had the authority to convey at the time of conveyance;
(b) That no intervening liens, judgments, or encumbrances attached to any lot during the assembly period that have not been released of record;
(c) That the special warranty covenants in each vesting deed have not been breached by any acts of the respective grantors; and
(d) That HELH has held continuous, uninterrupted title to all six lots since the date of acquisition of the final lot (Lot 6, acquired January 29, 2016).
With respect to entity authority, we note that HELH is a Maryland limited liability company with Vincent A. DeLuca as its sole member. The Commitment requires, as a condition to issuance, delivery of HELH's Articles of Organization, Operating Agreement, certificate of good standing from the Maryland SDAT, and an authorizing resolution from Mr. DeLuca. These requirements are discussed further in Section IV.C below. We recommend that seller's counsel be asked to produce these documents promptly so that they can be reviewed and approved well in advance of the closing date.
C. Premium and Endorsement Costs
The Commitment references the standard Maryland title insurance rate schedule promulgated by the Maryland Insurance Administration. For an owner's policy in the initial amount of $54,000,000, the base premium will be calculated in accordance with the rate schedule applicable to policies in that amount range. Given that the owner's policy amount will ultimately be increased to $576,000,000 through pending disbursement endorsements, we should confirm with Tidewater the methodology for calculating the additional premium due at each policy increase.
In addition to the base policy premium, we anticipate significant endorsement premiums for the following endorsements (discussed in detail in Section VI below): survey (ALTA 25), zoning (ALTA 3.1), access (ALTA 17 and 17.2), contiguity (ALTA 19 and 19.1), restrictions/encroachments/minerals (ALTA 9.7), pending disbursement, non-imputation, tax parcel, and the easement damage/enforced removal endorsement (ALTA 28). We recommend obtaining a comprehensive endorsement premium quotation from Tidewater and including the estimated costs in the closing cost allocation memorandum being prepared for the JV.
The lender's policy premium for the Meridian construction loan policy ($336,000,000) will be calculated separately, typically at a reduced "simultaneous issue" rate if the lender's policy is issued simultaneously with the owner's policy or within a specified period thereafter. We will coordinate with Tidewater on the simultaneous issue discount availability given the anticipated gap between the land closing (January 30, 2026) and the construction loan closing (February 15, 2026).
IV. SCHEDULE B — REQUIREMENTS (CONDITIONS TO ISSUANCE)
Schedule B, Part I of the Commitment sets forth the requirements that must be satisfied as conditions precedent to the issuance of the owner's policy. Each requirement is analyzed below.
A. Requirement 1: Deed of Conveyance
Requirement. Execution and recording of a deed of conveyance from Harbor East Land Holdings, LLC to Harbor Point Development JV, LLC, conveying fee simple title to the Property.
Analysis. Section 6.2(a) of the Purchase and Sale Agreement (the "PSA") between Fairwater and HELH requires the seller to deliver a special warranty deed at closing. The PSA is being assigned to HP JV pursuant to the Assignment and Assumption of Purchase and Sale Agreement, which is currently being finalized. The deed should be in the form of a Maryland statutory special warranty deed, containing the standard covenant that the grantor has not encumbered the property by any act of the grantor or anyone claiming by, through, or under the grantor, except as set forth in the deed.
Recommendation. We recommend that the deed form be prepared by our office and circulated to seller's counsel for approval no later than January 10, 2026. The deed must comply with the requirements of the Maryland Real Property Article, Title 4 (Recordation of Instruments), including proper acknowledgment by an authorized representative of HELH, the inclusion of the consideration recital (or, if a nominal recital is used, a separate affidavit of consideration for transfer tax purposes), and a certification that the instrument is prepared by or under the supervision of an attorney admitted to practice in Maryland. We will confirm that the deed form includes the standard covenant against the grantor's acts and does not contain any reservation or exception beyond the permitted exceptions set forth in the PSA.
The deed must also include the tax account numbers for all six lots on Block 7419 to satisfy Baltimore City recording requirements.
B. Requirement 2: Transfer and Recordation Taxes
Requirement. Payment of all applicable state and local transfer taxes and recordation taxes upon recording of the deed.
Analysis. The following taxes will apply to the recording of the deed conveying the Property:
(a) Maryland State Transfer Tax: 0.5% of the consideration ($54,000,000 × 0.005 = $270,000)
(b) Baltimore City Transfer Tax: 1.5% of the consideration ($54,000,000 × 0.015 = $810,000)
(c) Maryland State Recordation Tax: $7.00 per $1,000 of consideration ($54,000,000 × $7.00/$1,000 = $378,000)
(d) Baltimore City Local Recordation Tax: The current Baltimore City local recordation tax rate is $5.00 per $1,000 of consideration ($54,000,000 × $5.00/$1,000 = $270,000)
The estimated total transfer and recordation taxes are approximately $1,728,000. Under the PSA, transfer taxes are to be split equally between buyer and seller, while recordation taxes are to be paid by the buyer. This allocation should be confirmed with the transaction team and reflected in the closing settlement statement. We note that no exemption from transfer or recordation taxes appears to be available for this transaction, as the conveyance is an arm's-length sale of improved real property (or, more precisely, vacant land with development entitlements in place).
Recommendation. We recommend confirming the tax allocation provisions of the PSA and preparing the estimated closing cost schedule accordingly. The settlement agent should be instructed to collect and remit all transfer and recordation taxes at the time of recording, as required by Maryland law. The deed should include a recital of the full consideration to ensure proper calculation of the taxes.
C. Requirement 3: Entity Authority Documentation
Requirement. Delivery of entity formation documents, authority documentation, and good standing certificates for both the seller (HELH) and the buyer (HP JV).
Analysis. This requirement is standard and applies to both sides of the transaction, as set forth below.
Seller (Harbor East Land Holdings, LLC):
(a) Certified copy of the Articles of Organization of HELH, as filed with the Maryland SDAT;
(b) Certified copy of the Operating Agreement of HELH (or a certification that the Operating Agreement has not been amended since its initial adoption);
(c) Certificate of Good Standing from the Maryland SDAT, dated within thirty (30) days of the closing date;
(d) Authorizing resolution of Vincent A. DeLuca, as sole member of HELH, authorizing the sale and conveyance of the Property and the execution and delivery of all closing documents on behalf of HELH; and
(e) A certification from Mr. DeLuca confirming that he is the sole member of HELH and that no other person or entity has any membership interest in or authority over HELH.
Buyer (Harbor Point Development JV, LLC):
(a) Certified copy of the Certificate of Formation of HP JV, as filed with the Delaware Secretary of State;
(b) Certified copy of the Operating Agreement of HP JV, together with the First Amendment thereto reflecting the admission of both members (Fairwater HP Manager, LLC and Prescott HP Investor, LLC);
(c) Certificate of Good Standing from the Delaware Secretary of State, dated within thirty (30) days of the closing date;
(d) Foreign LLC qualification filing with the Maryland SDAT (confirming that HP JV is registered to do business in Maryland);
(e) Certificate of Good Standing from the Maryland SDAT for HP JV as a foreign LLC qualified to do business in Maryland;
(f) Authorizing resolutions of each member of HP JV (Fairwater HP Manager, LLC and Prescott HP Investor, LLC) authorizing the acquisition of the Property and the execution and delivery of all closing documents on behalf of HP JV; and
(g) Evidence that HP JV has obtained its federal employer identification number (EIN). We understand that the EIN application (Form SS-4) has been filed and the assigned EIN is 84-6213950. We recommend confirming receipt of the IRS EIN confirmation letter prior to closing.
Recommendation. We recommend that all entity authority documents be assembled and circulated to Tidewater no later than January 17, 2026, to allow Tidewater's underwriting department sufficient time to review and approve the authority documentation in advance of the land closing. Seller's counsel should be prompted to deliver HELH's Operating Agreement promptly; given that Mr. DeLuca is the sole member, the Operating Agreement should be straightforward, but we must confirm that no consent or approval of any third party is required for the conveyance. With respect to HP JV, we should coordinate with the JV formation team at Calderwood & Harkness to ensure that the Certificate of Formation, Operating Agreement, and all amendments have been fully executed and filed in their respective jurisdictions.
D. Requirement 4: Lien Search and Satisfaction
Requirement. Delivery of current UCC, judgment, and tax lien searches and confirmation that all outstanding liens, judgments, and encumbrances are satisfied or released of record prior to or simultaneously with closing.
Analysis. The Commitment requires the following searches to be completed and submitted to Tidewater:
(a) UCC Searches: Searches against HELH in the Maryland SDAT filing office (as the debtor's state of organization) and against Vincent A. DeLuca individually in Maryland;
(b) Judgment Searches: Searches against HELH and Vincent A. DeLuca in the Baltimore City Circuit Court and the United States District Court for the District of Maryland;
(c) Federal Tax Lien Searches: Searches against HELH and Vincent A. DeLuca for any federal tax liens filed in Baltimore City or in the U.S. District Court for the District of Maryland; and
(d) State Tax Lien Searches: Searches against HELH for any Maryland state tax liens.
We have requested that Tidewater provide copies of all search results as they become available. The Commitment does not disclose any outstanding judgments or UCC filings against HELH or Mr. DeLuca at this time, but the searches may not have been completed as of the effective date. We anticipate that Tidewater will update the search results as part of its pre-closing bring-down procedures.
Recommendation. We recommend confirming with Tidewater that all required searches have been ordered and requesting copies of the results as soon as they are available. If any UCC filings, judgments, or tax liens are identified, they must be released or satisfied prior to or simultaneously with closing. Any UCC filings against HELH that encumber the Property as fixtures should be addressed by UCC-3 termination statements at closing. We should also run a search against HP JV as the acquiring entity to confirm that no liens or judgments have been filed against the JV in the brief period since its formation, although this is unlikely given that the JV is newly formed.
E. Requirement 5: Real Property Tax Status
Requirement. Confirmation that all Baltimore City real property taxes and assessments for Block 7419, Lots 1–6, are current through the date of closing.
Analysis. Baltimore City real property taxes are assessed and billed on an annual basis, with the fiscal year running from July 1 through June 30. The current fiscal year (FY 2025–2026) tax bills would have been issued in July 2025, with the first semi-annual installment due on September 30, 2025, and the second semi-annual installment due on December 31, 2025. As of the effective date of the Commitment (December 9, 2025), the second installment for FY 2025–2026 has not yet come due.
We should confirm that the first semi-annual installment has been paid by HELH and that there are no delinquent taxes or assessments from prior fiscal years. Any special assessments, special benefit assessments, or tax increment financing (TIF) charges applicable to the Property should also be identified and confirmed current.
Recommendation. We recommend obtaining a tax status report from the Baltimore City Office of Finance for each of the six lots on Block 7419, confirming that all taxes and assessments are current through the closing date. Under the PSA, real property taxes are to be prorated between the seller and the buyer as of the date of land closing (January 30, 2026), with the seller responsible for taxes attributable to the period prior to closing and the buyer responsible for taxes attributable to the period from and after closing. The settlement statement should reflect the appropriate proration credit.
F. Requirement 6: FIRPTA Certificate / Maryland Withholding
Requirement. Delivery of a non-foreign person affidavit under the Foreign Investment in Real Property Tax Act ("FIRPTA") and compliance with Maryland income tax withholding requirements.
Analysis. Under Section 1445 of the Internal Revenue Code, the buyer of real property from a foreign person is required to withhold ten percent (10%) of the amount realized on the disposition. To avoid withholding, the seller must provide a certification that it is not a "foreign person" as defined in Section 1445(f)(3). HELH, as a Maryland LLC, should be able to provide this certification, but the affidavit must be properly executed by an authorized representative of HELH (i.e., Mr. DeLuca as sole member) and must include HELH's taxpayer identification number.
Additionally, under Maryland Tax-General Article § 10-912, a buyer of Maryland real property is required to withhold a portion of the purchase price for payment of the seller's Maryland income tax liability unless the seller provides an exemption certificate. The standard exemption certificates apply where the seller is a Maryland resident individual or a Maryland entity. HELH, as a Maryland LLC, should qualify for the exemption from withholding, but we should confirm that the appropriate exemption certificate will be delivered at closing.
Recommendation. Seller's counsel should be requested to prepare and deliver the FIRPTA non-foreign person affidavit and the Maryland income tax withholding exemption certificate, each in the form required by Tidewater and the settlement agent, no later than January 24, 2026.
G. Requirement 7: ALTA Survey
Requirement. Delivery of a current ALTA/NSPS Land Title Survey certified to Tidewater Insurance Group, Inc.
Analysis. An ALTA/NSPS Land Title Survey was completed on December 3, 2025, by Calvert Surveying & Engineering, Inc. (the "Survey"). We have reviewed a copy of the Survey and confirmed that it depicts the Property boundaries, easements, encroachments, improvements, flood zone designations, and other matters consistent with the requirements of the 2021 ALTA/NSPS Minimum Standard Detail Requirements. The Survey includes the following Table A optional items: Items 1, 2, 3, 4, 5, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 11(b), 13, 14, 16, 17, 18, 19, and 20.
However, upon review of the survey certification, we note that the certification is addressed to HP JV, Fairwater Real Estate Investment Trust, Prescott Capital Partners, LP, and Meridian National Bank, N.A. Tidewater Insurance Group, Inc. is not currently named in the survey certification. As Tidewater requires a survey certification naming it as an insured party in order to delete or modify the standard survey exception and to issue the ALTA 25 (Same as Survey) endorsement, an updated certification must be obtained from Calvert Surveying.
Recommendation. We recommend contacting Calvert Surveying & Engineering, Inc. immediately to request an updated survey certification that includes Tidewater Insurance Group, Inc. as a named certified party. This is a straightforward administrative matter and should not require a re-survey of the Property. The updated certification should be delivered to Tidewater as soon as possible, and in any event prior to January 17, 2026.
H. Other Standard Requirements
In addition to the specific requirements discussed above, the Commitment contains the following standard requirements that are customary for transactions of this type:
(a) Title Affidavit from Seller. HELH must deliver an owner's title affidavit (in the form required by Tidewater) certifying, among other things, that (i) there are no additional liens, encumbrances, or claims against the Property that are not reflected in the public records; (ii) there are no parties in possession of the Property other than HELH; (iii) there are no unrecorded agreements, options, or rights of first refusal affecting the Property; (iv) there has been no construction, demolition, or site improvement work performed on the Property within 180 days prior to closing that could give rise to mechanics' liens; and (v) HELH has not entered into any contracts for future construction or improvement work on the Property.
(b) Gap Indemnity / Bring-Down Search. Tidewater requires a bring-down search of the Baltimore City land records and the relevant judgment, lien, and UCC indices between the effective date of the Commitment (December 9, 2025) and the recording date of the deed to confirm that no intervening liens, encumbrances, or other adverse matters have been filed during the gap period. In the alternative, or in addition, Tidewater may require a gap indemnity from HP JV and/or HELH, undertaking to indemnify Tidewater against any loss arising from matters filed during the gap period. This is standard practice in Maryland and should not present any difficulties.
(c) Mechanic's Lien Affidavit. Given the development context, this requirement is of particular importance. Maryland Real Property Article § 9-102 et seq. provides that a mechanic's lien may be filed within 180 days after the work is completed. If HELH or any contractor engaged by HELH has performed any construction, demolition, excavation, grading, environmental remediation, or other site work on the Property within 180 days prior to closing, the mechanic's lien priority could relate back to the date of commencement of work, potentially priming the deed to HP JV. Accordingly, the seller's title affidavit must specifically address whether any such work has been performed. If any pre-closing site work has occurred, lien waivers must be obtained from all contractors and subcontractors.
Recommendation. We recommend that the title affidavit, gap indemnity, and mechanic's lien affidavit forms be obtained from Tidewater and circulated to seller's counsel for review and completion no later than January 17, 2026. We should emphasize to seller's counsel the importance of the mechanic's lien affidavit, particularly given that the seller owns a development site in an active waterfront development area. If any pre-closing site work is disclosed, we will need to obtain lien waivers and confirm with Tidewater that the mechanic's lien exception (Exception 6) can be deleted or modified accordingly.
V. SCHEDULE B — EXCEPTIONS FROM COVERAGE (DETAILED ANALYSIS)
Schedule B, Part II of the Commitment sets forth the exceptions from coverage that will appear in the owner's policy unless they are deleted, modified, or insured over by endorsement. Each exception is analyzed below, together with our recommendation for disposition.
A. Exception 1: Real Property Taxes and Assessments — Current and Subsequent Years
Description. This is the standard exception for real property taxes and assessments for the current fiscal year and subsequent years that are not yet due and payable as of the date of the policy. The exception reads substantially as follows:
"Taxes and assessments for the fiscal year 2025–2026 and subsequent years, which are not yet due and payable."
Analysis. This is a universal exception that appears in virtually every title insurance policy issued in Maryland and is generally non-deletable. The exception recognizes that real property taxes are assessed and billed prospectively and that the title insurer does not insure against the obligation to pay future taxes. The exception does not address delinquent taxes for prior fiscal years; any delinquent taxes would be disclosed as a separate exception or would be identified through the lien search process.
Recommendation. This is a standard exception and no curative action is required. We should confirm that all Baltimore City real property taxes and assessments are current through the closing date and that the proration of taxes at closing is handled in accordance with the PSA. No request to delete this exception is necessary.
B. Exception 2: Utility Easements of Record
Description. The Commitment lists multiple utility easements burdening portions of Block 7419, Lots 1–6, as recorded in the Baltimore City land records. The specific easements identified are as follows:
(a) BGE Overhead/Underground Electric Easement — Lot 3. An easement granted to Severin Group (now Exelon subsidiary BGE) for the installation, maintenance, and operation of overhead and underground electric transmission and distribution lines across a portion of Lot 3. Recorded in Liber 16895, Folio 233, Baltimore City Land Records, dated October 14, 2008. The easement area is described as a 30-foot-wide strip running generally northeast to southwest across the westerly portion of Lot 3.
(b) Baltimore City DPW Water and Sewer Easement — Lots 2 and 5. An easement granted to the City of Baltimore, Department of Public Works, for the installation, maintenance, and operation of water and sewer lines across portions of Lots 2 and 5. Recorded in Liber 14210, Folio 88, Baltimore City Land Records, dated April 3, 2003. The easement area is described as a 20-foot-wide strip along the northerly boundaries of Lots 2 and 5, running generally east to west.
(c) Telecommunications Easement — Lot 1. An easement granted to Tarrant Enterprises for the installation, maintenance, and operation of telecommunications cables and conduit across a portion of Lot 1. Recorded in Liber 14215, Folio 501, Baltimore City Land Records, dated May 12, 2003. The easement area is described as a 10-foot-wide strip along the easterly boundary of Lot 1.
Survey Cross-Reference. We have cross-referenced each of the above easements with the Survey delivered by Calvert Surveying on December 3, 2025. The Survey depicts the approximate location of each easement based on the recorded descriptions. The Survey confirms the following:
(i) The BGE electric easement on Lot 3 is depicted as a 30-foot-wide shaded area running northeast to southwest across the westerly portion of Lot 3. Critically, the Survey indicates that the easterly boundary of this easement area overlaps with the proposed building footprint for Tower A (the westerly residential tower) by approximately 12 to 15 feet. This overlap is noted on the Survey as a potential conflict.
(ii) The DPW water and sewer easement on Lots 2 and 5 is depicted as a 20-foot-wide shaded area along the northerly lot boundaries. Based on the Survey, this easement area does not appear to conflict with the planned building footprints for either Tower A or Tower B, but it may affect surface-level improvements such as parking areas, landscaping, and pedestrian pathways along the northern edge of the site.
(iii) The Ashgrove & Co. telecommunications easement on Lot 1 is depicted as a 10-foot-wide shaded area along the easterly boundary. This easement area does not appear to conflict with the planned building footprints but may affect the proposed ground-floor retail frontage along the eastern edge of the site.
Recommendation. This exception requires significant attention, particularly with respect to the BGE electric easement on Lot 3. Our specific recommendations are as follows:
(a) BGE Electric Easement (Lot 3) — Priority Curative Item. The overlap between the BGE easement area and the proposed Tower A building footprint presents a direct conflict that must be resolved before construction can commence. We recommend the following approach:
(i) Obtain the underlying easement instrument. We have requested a certified copy of the easement agreement from Tidewater and will also order a copy from the Baltimore City land records. We need to review the full terms of the easement, including any provisions regarding relocation, abandonment, or modification.
(ii) Engage with BGE. Fairwater's development team (Marcus D. Okonkwo, Vice President of Development) should initiate discussions with BGE regarding the feasibility of relocating the easement to an alternative alignment that does not conflict with the Tower A building footprint. Easement relocations of this type are common in urban development contexts but typically require the developer to bear the cost of relocating the utility infrastructure and to grant a replacement easement in an alternative location acceptable to BGE.
(iii) Negotiate an Easement Relocation Agreement. If BGE agrees in principle to the relocation, we should negotiate and execute an Easement Relocation Agreement documenting the terms of the relocation, including the scope of the developer's obligations, the description of the replacement easement area, the timeline for completion of the relocation work, and the release and termination of the existing easement upon completion of the relocation.
(iv) Affirmative Title Insurance Coverage. If the easement relocation cannot be completed prior to the land closing or the construction loan closing, we recommend requesting an affirmative endorsement from Tidewater (specifically, an ALTA 28 — Easement: Damage or Enforced Removal endorsement) that would provide coverage to the insured in the event that the easement holder exercises its rights under the easement in a manner that damages or requires the removal of improvements constructed within the easement area. We should also request an ALTA 28.1 endorsement if available under Maryland practice. This endorsement would provide a measure of interim protection while the relocation negotiations are ongoing.
(v) Construction Loan Coordination. This issue must be flagged as a condition to the construction loan closing with Meridian National Bank. Meridian's counsel (Kevin P. Driscoll) will almost certainly require either a completed easement relocation or affirmative title insurance coverage as a condition to funding construction draws for Tower A. We recommend discussing this issue with Mr. Driscoll promptly.
(b) DPW Water and Sewer Easement (Lots 2 and 5). We recommend obtaining a copy of the underlying easement instrument and confirming the exact location and width of the easement. While the easement does not appear to conflict with the building footprints based on the Survey, we should confirm that the easement area is consistent with the project's site plan for surface improvements. If the project's landscaping, parking, or pedestrian improvements will encroach into the easement area, we may need to negotiate a modification or obtain consent from the Baltimore City DPW.
(c) Ashgrove & Co. Telecommunications Easement (Lot 1). We recommend obtaining a copy of the underlying easement instrument and confirming that the easement area does not conflict with the planned ground-floor retail frontage along the eastern edge of the site. If the project's retail improvements will encroach into the easement area, we should determine whether Ashgrove & Co.'s consent is required and, if so, initiate discussions with Ashgrove & Co..
C. Exception 3: Existing Deed of Trust (Mortgage Lien)
Description. The Commitment discloses a deed of trust recorded against all six lots comprising the Property (Block 7419, Lots 1–6) in favor of Crowne Albany Savings Bank, securing indebtedness of Harbor East Land Holdings, LLC. The deed of trust was recorded in Liber 20980, Folio 115, Baltimore City Land Records, dated September 8, 2017. The original principal amount secured by the deed of trust is $18,500,000. The deed of trust identifies the trustees as Martin J. Kessler and Patricia R. Huang.
Analysis. This is a mandatory curative item. The existing deed of trust in favor of Crowne Albany Savings Bank represents a first-priority lien on the Property that must be released and satisfied of record prior to or simultaneously with the recording of the conveyance deed from HELH to HP JV. HP JV cannot take title to the Property subject to this deed of trust, as the PSA requires delivery of title free and clear of all mortgages, deeds of trust, and monetary liens (other than the permitted exceptions specifically enumerated in the PSA).
We note that the deed of trust was originally recorded in 2017 in the amount of $18,500,000. We do not know the current outstanding balance of the underlying loan, which may have been partially amortized or paid down since origination. We should also confirm whether any modifications, amendments, or supplements to the deed of trust have been recorded.
Recommendation. The following curative steps are required:
(a) Payoff Letter. Seller's counsel should be directed to obtain a payoff letter from Crowne Albany Savings Bank reflecting the outstanding balance of the loan, including accrued interest, prepayment penalties (if any), and any other amounts required to satisfy the debt in full as of the anticipated closing date (January 30, 2026). The payoff letter should be delivered to our office and to the settlement agent no later than January 17, 2026, and should be valid through a date at least ten (10) business days following the target closing date to account for any potential delay.
(b) Release/Satisfaction. Upon receipt of the payoff amount, Crowne Albany Savings Bank must deliver a recordable release of deed of trust (or certificate of satisfaction), properly executed by the trustees or by an authorized officer of the bank, releasing the Property from the lien of the deed of trust. The release should be recorded in the Baltimore City land records simultaneously with or immediately following the recording of the conveyance deed.
(c) Escrow Instructions. The Land Closing Escrow Instructions should direct the settlement agent to disburse the payoff amount directly to Crowne Albany Savings Bank from the closing proceeds (out of the $54,000,000 purchase price). The settlement agent should be instructed not to release the balance of the purchase price to the seller until the release of deed of trust has been delivered to the settlement agent for recording.
(d) Gap Coverage. If Crowne Albany Savings Bank is unable or unwilling to deliver a pre-recorded release at closing (i.e., if the release will be recorded only after the bank receives and processes the payoff funds), we should request that Tidewater provide gap coverage or an indemnity pending the recording of the release. Tidewater's standard practice in Maryland is to insure over a mortgage lien where the settlement agent holds the payoff proceeds in escrow and has received a payoff letter and a commitment from the lender to deliver a recordable release upon receipt of funds. We should confirm Tidewater's willingness to follow this procedure.
D. Exception 4: Restrictive Covenants and Conditions
Description. The Commitment discloses a Declaration of Covenants, Conditions, and Restrictions (the "CC&Rs") recorded against Block 7419 by a prior owner of the Property, in connection with the original Harbor Point master development. The CC&Rs are recorded in Liber 18422, Folio 601, Baltimore City Land Records, dated March 22, 2011. The declarant identified in the CC&Rs is Harbor Point Master Developer, LLC.
Analysis. Recorded restrictive covenants that run with the land can impose use restrictions, development limitations, architectural review requirements, and other conditions that may affect the planned development. Until we have reviewed the full text of the CC&Rs, we cannot determine whether any provisions conflict with the planned Class A mixed-use residential and retail development program for Harbor Point Towers.
Additionally, the Baltimore City PUD approval for the Property (Ordinance No. 24-0417, dated June 14, 2024) may supersede, modify, or override certain provisions of the CC&Rs to the extent that the PUD establishes the governing zoning and development standards for the Property. However, PUD approvals typically do not automatically extinguish private restrictive covenants; the covenants remain enforceable as private land use restrictions unless they are specifically released, modified, or terminated by the declarant or by judicial action.
Recommendation. The following curative steps are recommended:
(a) Obtain Full Copy of CC&Rs. We have requested a certified copy of the CC&Rs from Tidewater and will also order a copy from the Baltimore City land records. Once received, we will conduct a thorough review of all provisions, with particular attention to: (i) use restrictions that may prohibit or limit residential or retail uses; (ii) building height, density, or setback restrictions that may conflict with the 28-story tower program; (iii) architectural review or design approval requirements that may require consent from the declarant or an architectural review committee; (iv) assessment or dues obligations that may constitute a lien on the Property; and (v) reversion, forfeiture, or right of re-entry provisions that could be triggered by non-compliance with the covenants.
(b) Assess PUD Interaction. We will coordinate with the Zoning and Entitlements Memorandum being prepared separately by our office to determine whether Ordinance No. 24-0417 specifically addresses or modifies the CC&Rs. If the PUD approval contemplates a development program that is inconsistent with any CC&R provisions, we will need to determine whether the CC&R provisions are enforceable notwithstanding the PUD approval.
(c) Release or Modification. If any CC&R provisions are identified that conflict with the planned development, we will need to negotiate a release or modification of the offending provisions with the declarant (Harbor Point Master Developer, LLC) or its successor in interest. Seller's counsel should be asked to confirm the current status of the declarant entity and to identify the appropriate contact for negotiation of any release or modification.
(d) Restrictive Covenant Endorsement. Regardless of the outcome of the CC&R review, we recommend requesting a restrictive covenant endorsement from Tidewater — specifically, an ALTA 9.7 (Restrictions, Encroachments, Minerals) endorsement — confirming that the planned use of the Property (Class A residential and ground-floor retail) does not violate the recorded CC&Rs. This endorsement would provide the JV and its members with title insurance protection in the event that a third party asserts a claim based on the CC&Rs. We should discuss with Tidewater whether it is willing to issue this endorsement and, if so, whether it will require additional underwriting information or legal analysis to support the endorsement.
E. Exception 5: Rights of Parties in Possession
Description. This is the standard survey exception for "rights of parties in possession not shown by the public records."
Analysis. This exception is commonly included in title commitments to except from coverage any claims that may be asserted by persons who are in physical possession of the property but whose possessory interests are not reflected in the recorded land records. This could include tenants under unrecorded leases, licensees, trespassers, or adverse possessors. The exception is typically deletable upon delivery of an ALTA survey and a seller's affidavit of possession.
Recommendation. We recommend the following:
(a) Seller's Affidavit. Obtain a sworn affidavit from HELH (executed by Vincent A. DeLuca as sole member) confirming that: (i) HELH is the sole party in possession of the Property; (ii) there are no tenants, licensees, occupants, or other parties in possession of any portion of the Property; (iii) HELH has not entered into any leases, license agreements, or occupancy agreements affecting the Property; and (iv) HELH is not aware of any adverse claims of possession.
(b) Survey Cross-Reference. Review the Survey for any evidence of occupancy, fencing, improvements, or other physical indications of possession by parties other than HELH. The Survey does not appear to depict any such conditions, but we will confirm with Calvert Surveying.
(c) Deletion or Modification of Exception. Upon delivery of the seller's affidavit and confirmation from the Survey, request that Tidewater delete this exception or narrow it to read: "Rights of parties in possession as shown on the survey dated December 3, 2025, by Calvert Surveying & Engineering, Inc." If Tidewater is unwilling to fully delete the exception, the narrowed language should be acceptable.
F. Exception 6: Mechanics' and Materialmen's Liens
Description. This is the standard exception for "liens or claims of liens for labor or materials that may not yet be filed of record."
Analysis. Under the Maryland mechanic's lien statute (Maryland Real Property Article § 9-102 et seq.), a contractor, subcontractor, or materialman who provides labor or materials for the improvement of real property may file a lien against the property within 180 days after completion of the work. Importantly, the mechanic's lien relates back to the date of commencement of construction, not the date of filing. This means that if any construction, demolition, grading, or site work was performed on the Property by or on behalf of HELH within 180 days prior to closing, a mechanic's lien could be filed after closing with a priority date that precedes the conveyance to HP JV.
This exception is of heightened importance in this transaction because: (i) the Property is a development site in an active waterfront development area, and pre-closing site work is not uncommon; and (ii) HP JV will be commencing construction of a $576,000,000 development project shortly after land closing, and any pre-existing mechanic's lien claims could create complications for the construction loan with Meridian.
Recommendation. The following steps are recommended:
(a) Seller's Mechanic's Lien Affidavit. Obtain a sworn affidavit from HELH (executed by Vincent A. DeLuca) specifically certifying that: (i) no construction, demolition, excavation, grading, environmental remediation, or other site improvement work has been performed on the Property within 180 days prior to closing; (ii) HELH has not entered into any contracts for such work; and (iii) no claims for unpaid labor or materials have been asserted against HELH in connection with the Property.
(b) Contractor Lien Waivers. If the seller's affidavit discloses any pre-closing site work, we must obtain unconditional lien waivers from all contractors, subcontractors, and materialmen who performed work on the Property. The lien waivers must be in the form required by Tidewater and must cover all work performed through the date of closing.
(c) Deletion or Modification of Exception. Upon delivery of the seller's mechanic's lien affidavit (and contractor lien waivers, if applicable), request that Tidewater delete or modify this exception. Tidewater's standard practice in Maryland is to delete the mechanic's lien exception where the seller provides a satisfactory affidavit of no recent construction activity. If any pre-closing site work is disclosed, Tidewater may require additional documentation or may agree to modify the exception to exclude claims arising from the identified work, provided that lien waivers are obtained.
G. Exception 7: Environmental Liens and Notices
Description. The Commitment includes a general exception for "any environmental liens, notices, or deed restrictions recorded against the Property pursuant to the Maryland Environment Article or any other federal, state, or local environmental law."
Analysis. Environmental liens and institutional controls can be recorded against real property in Maryland as a result of environmental contamination, voluntary cleanup programs (VCP), or enforcement actions by the Maryland Department of the Environment (MDE). Such liens or controls may restrict the use of the property, require ongoing monitoring or remediation, or impose liability on the property owner. Recorded environmental liens or institutional controls would constitute encumbrances on title that could affect the value and development potential of the Property.
We have cross-referenced this exception with the Phase I Environmental Site Assessment (the "Phase I ESA") prepared by Bayline Environmental Consultants, LLC and dated November 25, 2025 (Exhibit C). The Phase I ESA was prepared in accordance with ASTM Standard E1527-21 and covers the entire 8.2-acre Property. Our preliminary understanding, based on a summary review of the Phase I ESA executive summary, is as follows:
(i) The Phase I ESA identified one recognized environmental condition ("REC") related to the historical use of a portion of Lot 5 as a petroleum storage facility (above-ground storage tanks) in the 1950s through 1970s. The Phase I ESA noted that the above-ground storage tanks were removed and that a No Further Requirements Determination (NFRD) was issued by MDE under the Maryland Voluntary Cleanup Program in 2009.
(ii) The Phase I ESA did not identify any controlled recognized environmental conditions ("CRECs") or historical recognized environmental conditions ("HRECs") other than the resolved petroleum storage facility matter described above.
(iii) The Phase I ESA did not identify any recorded environmental liens, notices of violation, or institutional controls in the Baltimore City land records or the MDE online databases as of the date of the report.
Recommendation. The following steps are recommended:
(a) Confirm No Recorded Environmental Liens. We should independently confirm that no environmental liens, deed restrictions, or institutional controls are recorded against any of the six lots in the Baltimore City land records. This can be accomplished through a targeted search of the land records or through Tidewater's title plant.
(b) Confirm NFRD Status. We should obtain a copy of the MDE No Further Requirements Determination issued in 2009 for Lot 5 and confirm that the NFRD remains in full force and effect and has not been revoked, modified, or conditioned. If the NFRD contains any institutional controls or land use restrictions (such as a prohibition on residential use of Lot 5 absent certain conditions), these must be analyzed in light of the planned residential development.