Do you have ground rent? Some, but not all, homeowners in the Baltimore area have ground rent. This means that the homeowner owns the structure of their house but not the land their house sits on, and the homeowner must pay rent to the owner of the land.
It is common to have questions about whether your property is subject to ground rent, what to do if communication from the owner of the ground is irregular or infrequent, and how to get rid of your ground rent. This article shares five things you should know about ground rent.
- Maryland law requires ground lease holders to register their ground rent. If the owner, or “ground lease holder,” has not followed state requirements for registering the ground rent, they are not entitled to collect any money. If you are wondering whether you need to pay ground rent, or you receive a letter from someone claiming to be the ground lease holder, the first thing to do is check whether that person or organization is registered as the ground lease holder with the State Department of Assessments and Taxation (SDAT). You can look this information up online through the SDAT Real Property Data Search, or call SDAT’s Ground Rent Department at 410-767-1151.
- If you owe ground rent, it is important to pay it. Ground rent payments are often modest compared to other expenses homeowners are responsible for, and since payments are usually made only once or twice a year, it may be easy to overlook or deprioritize the expense. However, missing ground rent payments can put you at risk of being sued for payment or foreclosure on your property. When you receive a legitimate bill for ground rent, it is important to pay the expense to maintain your housing stability. If you are actively in ground rent foreclosure proceedings in Baltimore City, please contact The SOS Fund for assistance at [email protected] or 443-810-3665.
- You are likely entitled to pay off, or “redeem,” your ground rent to get rid of it forever. Some ground lease holders filed the paperwork necessary with the state to preserve their ground rent and make it “irredeemable.” However, the majority of homeowners have the right to “redeem” their ground rent, or buy it out and get rid of it forever, turning their legal ownership of their property from a “leasehold” interest to “fee simple.” To redeem your ground rent, you can negotiate a private sale with the ground lease holder, or complete the forms and procedures set up by SDAT to redeem the ground rent with SDAT’s assistance.
There is a formula set by Maryland law to determine the maximum cost for redeeming your ground rent. You can learn more about this process by visiting the SDAT website or calling the number provided above. Whichever method is used, the process is not complete until a deed is recorded with the City or County Land Records Department that shows the ground lease holder is transferring ownership of the ground to you, the property owner.
- You do not need to do anything if your property is subject to ground rent but no one is sending you a bill. Many homeowners have a deed that says they hold a leasehold interest and must pay ground rent, but they never receive a bill from the owner of the ground. If you are in this situation, you do not need to do anything. If the owner of the ground later contacts you, indicating you owe ground rent, first check with SDAT to make sure they are entitled to collect ground rent and that it is not a scam. Then, see the next section about how much they can collect.
- If a ground lease holder contacts you after not sending bills for a long period of time, you are likely only required to make ground rent payments for the past three years. A ground lease holder cannot sleep on their right to collect ground rent from you for multiple years and then send a bill for several years’ worth of past due payments. At most, they may bill you for three years of overdue payments, if the ground rent was registered in all of those years.
If you have additional questions about ground rent at your property, contact the Maryland Department of Assessments and Taxation at 410-767-1151 or [email protected]. If you would like the assistance of an attorney to address an issue with your ground rent, you may call the Maryland Volunteer Lawyers Service to see if you qualify for assistance at 410-547-6537 between 9am and 12pm, Monday through Thursday…