Ground Rent

Ground rent owners are required to register their ground rents in a database maintained by the Maryland Department of Assessment and Taxation. Homeowners can use this database to locate their current ground rent owner.

If you buy a property that is noted as having ground rent, but you can’t find the ground owner, your mortgage company may still want to escrow a ground rent fee. The most back ground rent that can be collected is three years.

This means, if you’ve lived in house for ten years, and suddenly a ground rent landlord appears and demands payment, they can only collect three years of back ground rent and then ask you to pay the annual fee moving forward.

While the landlord can only collect three years of back ground rent, you can face substantial charges on top of the overdue ground rent  if you ignore demands for payment. Ground rent holders can bill up to $500 before filing suit for non-payment, $700 in attorney’s fees in connection with a suit, $300 for a title search, plus other costs, all of which can add up to thousands of dollars. If ever you find yourself in ground rent dispute, remember, it is the landlord’s responsibility to prove they hold the title to the property.

If you fail to pay the ground rent on time, you may be required to pay additional fees and costs. In rare cases, the ground lease holder may also file an action in court to take possession of the property unless the past-due balance is paid.

Please note that under Maryland law, a ground lease holder may demand not more than 3 years of past due ground rent, and there are limits on how much a ground lease holder may be reimbursed for fees and costs. If you fail to pay the ground rent on time, you should contact a lawyer for advice.

Ground rent owners must provide homeowners with all of the information necessary for the homeowner to purchase the ground rent. These notices must accompany each, and every, ground rent bill. Additionally, homebuyers must be notified that they can redeem their ground rent as part of the initial financing or refinancing of their property.

The owner of a ground rent created after April 8, 1884 must sell you the ground rent at an amount fixed by Maryland law if you want to buy it. A purchase price is determined by taking the annual ground rent fee and dividing it by a range of .04–.12; the standard rates of redemption, depending on the year the lease was created.

There will also be legal fees and taxes involved in filing these papers that you will be responsible for paying. The purchase of ground rent is a private financial transaction, and as with most financial transactions it is recommended that an attorney or title company be involved to assist with the research, paperwork, and required filings. Live Baltimore’s partners are familiar with the ground rent redemption process.

If you want to redeem your ground rent and cannot locate the owner, the State of Maryland offers an opportunity to redeem the lease through the Department of Assessment and Taxation, where there has been no communication from the landlord for three years. Call the Maryland Residential Ground Rent Redemption Program at 410-767-1353 or redeem your ground rent by submitting your application online.

The Maryland Department of Housing and Community Development now has special loan financing available for income-eligible homeowners to redeem ground rent. The income limits are based on household size and cannot exceed 80 percent of the statewide median income. To find out if you qualify, call 410-767-1151 or submit your online Redemption Loan application.