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Ground Rents are unique to the Baltimore Real Estate Market and often time seem mysterious and confusing to my clients.  Ben Frederick Realty Inc. specializes in helping people buy and sell apartment buildings and investment real estate in Baltimore, Maryland.  This information is provided as a service to my clients.  

Two news paper articles about ground rents are available to help you understand this feature that is unique to Baltimore Real Estate:  Article 1;  Article 2  Major changes to Ground Rent laws became effective in 2003.  

The owner of a property subject to a Ground Rent can buy-out the ground rent.  If you offer to redeem the ground rent at the statutory redemption rate, the landlord must sell it to you.  

The Statutory Redemption Rate varies depending on the date the ground rent was created.  Some ground rents are not redeemable. 

The following only applies to residential ground rent leases with a term of 99 years.  It does not apply to ground leases on commercial property or commercial-multi-family property, including co-ops.

Original Lease Date Multiply the Annual Rent * by or divide the Annual Rent * by For Example
April 8, 1884 to April 5, 1888 25 0.04 $96 * 25 = $2,400
$96 / 0.04 = $2,400
After July 1, 1982 8.33 0.12 $96 * 8.33 = $800
$96 / 0/12 = $800
If the ground rent was created at any other time 16.66 0.06 $96 * 16.11 = $1,600
$96 / 0.06 = $1,600

* Rents are sometimes quoted as an ANNUAL and sometimes as a SEMI-ANNUAL price.  Make sure you calculate based on the ANNUAL rent, not the semi-annual rent.

You can force redemption of a Ground Rent only after it has seasoned:

Original Lease Date Redeemable After:
July 1, 1971 or later The Ground Rent must be in existence for at least 3 years before you can force redemption.
July 1, 1969 to July 1, 1971 or July 1, 1982 or later The Ground Rent must be in existence for at least 5 years before you can force redemption.
Before July 1, 1969 The Ground Rent can be redeemed at any time
 

 

Copyright © 2006 Ben Frederick Realty, Inc
Last modified: 08/04/06
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