Ground rents have been around since the 17th century when they were established in England and introduced to the colonies. Residential ground rents are still widely used today in Hawaii, Maryland and Pennsylvania. Maryland ground rents are mainly found in Baltimore and were created to make it less expensive for people to own real property because only the structure (the house) was sold and not the land.
So, what exactly is ground rent?
Ground rent is a lease agreement whereby a homeowner owns the house, but not the land the house sits on. Thus, the homeowner must pay rent to the owner of the land.
A ground rent lease is usually for 99 years and renews indefinitely. Ground rent holders often collect small amounts of rent either annually or biannually from multiple properties, which can result in a good return on the ground rent holders’ investment.
Does my property have ground rent?
Maryland law requires that ground rent holders register ground rent leases on the Maryland State Department of Assessments and Taxation’s (SDAT) Ground Rent Registry for the rent to be legally collectible. Ground rent deeds are filed in the land records of the Circuit Court in the county where the property sits. A deed for multiple ground rents owned by one owner is the typical way that the deed will be written. If you are unsure that your property has a ground rent, you can search for a ground registration here: https://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx.
If you discover that there is no ground rent registered on your property, then there is nothing left for you to do. If you are contacted by a business claiming that you owe them ground rent payments, please contact Maryland Volunteer Lawyers Service or any other legal service agency to help you. Why? This could potentially be a scam or the ground rent holder is attempting to illegally collect monies that they are not entitled to.
If a ground rent lease is not registered, the holder cannot (1) collect ground rent; (2) bring a civil action to enforce any rights under the ground rent lease; or (3) bring an ejectment action against the homeowner.
If you discover that your property has ground rent. You should contact the owner listed on the registration form to determine how much the ground rent will be yearly or inform the owner that you would like to redeem your ground rent.
What does it mean to redeem ground rent?
To redeem ground rent is to purchase the land (or ground) your home sits on from the ground rent holder. You can redeem your ground rent if a ground rent lease was executed before April 9, 1884, and the ground rent owner recorded a Notice of Intention to Preserve Irredeemability within the last 10 years.
How much does it cost to redeem ground rent?
The cost to redeem ground rent has been set by the Maryland General Assembly. So, there should be no arbitrary cost given to you by the ground rent holder. SDAT provides a formula on the application. An example of how ground rent is calculated is provided below.
What Steps should you take to redeem ground rent?
- First, determine if the ground rent exists and whether it is redeemable/irredeemable.
- Notify the ground rent holder who will either provide you with the redemption amount and next steps or direct you to complete the application for redemption through SDAT.
- If redeeming through SDAT, mail the following items to:
SDAT Ground Rent Department
Maryland State Department of Assessments and Taxation
301 West Preston Street, Room 801
Baltimore, MD 21201-2395
Note: If you have not received a bill and/or communication in the past three years, the application is a different form still found on the main SDAT ground rent page.
- Any recorded deed, deed of assignment or other document of transfer that establishes your interest in the property
- Any recorded document that establishes the existence of the ground rent
- A check made payable to SDAT for $20 (regular processing in nine weeks) or $70 (expedited processing in five weeks)
- 100 days after you receive notice that your application was approved, mail the following to SDAT’s Ground Rent Department:
- Affidavit of Certificate of Redemption https://dat.maryland.gov/realproperty/Pages/Ground-Rent.aspx
- The lump-sum payment via certified check
- SDAT will issue you a Certificate of Redemption.
- Record the Certificate of Redemption with your county’s land records office. This is located at the Circuit Court: https://mdcourts.gov/circuit.
Aja’ Mallory is a staff attorney at the Maryland Volunteer Lawyers Service. Her practice focuses on housing and consumer issues for Marylanders of limited means.
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