Understanding Ground Rent In Maryland

Real Estate and Other Housing
Homeownership
Understanding Ground Rent in Maryland

Understanding Ground Rent in Maryland

Topics on this page:

What is Ground Rent? How do I know if a residential or commercial property is subject to ground lease? What if I can not get in touch with the ground lease holder? What takes place if I fail to pay ground rent? What does it indicate to redeem ground rent? How much does it cost to redeem ground rent?

What is Ground Rent?

In certain situations, a house owner owns your home they live in however not the land the home sits on. Someone else (the ground lease holder) owns the land and rents the land to the homeowner. Under law, a ground lease holder is entitled to lease payments from the owner of the home that is situated on their land. These payments are referred to as ground rent.

Ground rent is most typical in the Greater-Baltimore genuine estate market but exists throughout Maryland. Ground lease payments normally vary from $50 to $150 each year and are generally paid semi-annually (two times a year). The language of the ground lease will set out the terms of payment. A ground rent lease is generally for 99 years and renews indefinitely.

Ground rent deals are various from normal property manager and tenant relationships. This is because the ground lease owner has no right to take back any residential or commercial property unless the occupant does not pay lease. That is, the ground lease holder doesn't have a reversionary right to the residential or commercial property or any structures developed on it unless the homeowner stops working to make the required payments. If the leaseholder is current with their ground lease payments, the residential or commercial property stays under their control.

The property owner is responsible for upkeep of the land and any improvements on the land, including enhancements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The property owner has the authority to modify, renovate, and reconstruct the residential or commercial property as they wish, but they should guarantee that their actions protect the value of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole duty of the house owner to procure and pay on any energies that service the residential or commercial property.

How do I understand if a residential or commercial property undergoes ground lease?

When a residential or commercial property is noted for sale, the residential or commercial property description must list whether the residential or commercial property has any suitable ground rent. If the residential or commercial property is noted as "Fee Simple," the listing includes both your home and the residential or commercial property (ground) in the purchase rate - there is no ground rent. If there is a sign of "Ground Rent" in a listing, it shows that a cost should be paid to the owner of the ground on which the residential or commercial property sits.

If you own a home, or are aiming to buy a home, you can determine if a residential or commercial property is subject to payment of a ground rent by looking at the deed. Ground rent deeds are submitted in the land records of the Circuit Court in the county where the residential or commercial property lies. In a lot of cases, a deed for numerous ground rents owned by one owner will be written. Land records can be found on the site mdlandrec.net.

Maryland law requires that ground lease holders register ground lease leases on the Maryland State Department of Assessments and Taxation's (SDAT) Ground Rent Registry. If you are unsure that your residential or commercial property has a ground rent, you can view the registration status through SDAT's Real Residential or commercial property Search. (When viewing the residential or commercial property record, click "View Ground Rent Redemption")

If a ground lease is registered for your residential or commercial property, you are bound to pay the ground lease to the ground lease holder. You should get in touch with the owner noted on the registration kind relating to payment of the ground rent or to inform the owner that you would like to redeem your ground lease. It is also your responsibility to alert the ground lease holder if you alter your address or transfer ownership of the residential or commercial property. If you are a ground lease renter (homeowner) or leaseholder and you have a concern, it is an excellent idea to get in touch with a lawyer.

Read the law: Md. Code, Real Residential Or Commercial Property § 8-703