Earlier this week Reven Housing REIT announced it was no longer a Colorado company. It had become, like so many other REITs before it, a Maryland corporation.
The move is hardly a surprise. Most REITs are registered in Maryland because of the state’s comprehensive legal framework written specifically for REITs. Almost all of the time, such as with Reven, a conversion to Maryland is of little notice. In other cases, such as the year-long struggle by two shareholders for control of Commonwealth REIT, the state’s laws come under the spotlight as investors and REIT managers scrutinize them to see what is permitted and what is not.
Maryland was the first “to put out the welcome mat for REITs and has it out to this day,” John Mallin, a real estate partner with the law firm McCarter & English, told GlobeSt.com. In 1962 Maryland became the first state to pass legislation that enabled and recognized REITs, only two years after the federal government did, giving it a leg up on other states in attracting REITs, he explains.