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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.
Here is an article about ground
rents to help you understand this feature that is unique to
Baltimore Real Estate: Article 1;
click here for information on Ground
Rent Redemption Rates
Two
New Laws Affecting Ground Rents from the 2003 Maryland General Assembly
Limits
On A Ground Rent Owner to Charge Late Fees and Collection Costs (SB 321):
This
Bill, which passed and was signed into law, takes affect October 1, 2003.
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Limits
the amount of back rent a ground owner may recover to a maximum of 3
years |
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The
Ground Rent Owner (landlord) must provide 45 days notice to the owner of the
building (by certified mail) and to the title agent who represented the
owner (by first class mail) before taking action to repossess the
property. Notice must also be given to each mortgagee (lender). |
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In
addition to the Rent owed, the Ground Rent Owner, may not charge more than
$500 for costs related to the collection of the delinquent rent (including
title abstract fees, judgment reports, photocopying costs, and legal fees). |
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If
the Ground Rent Owner has to file Action for Ejectment, the Ground Rent
Owner is entitled to reimbursement for Filing Fees and Court Costs, process
server, title exam and abstract fees not to exceed $300, attorneys fees not
to exceed $700, and taxes interest and other penalties paid by the Ground
Rent Owner. |
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The
Ground Rent Owner must provide notice of the delinquency to the
Tenant. The notice must be in 14 point bold-face type and state the
amount of the Ground Rent Past Due, a statement that, unless the Ground Rent
is paid within 30 days, further action will be taken and the tenant will be
liable for expenses and fees incurred in connection with the collection of
the past due rent.. The notice shall be mailed first class mail to the
tenant as listed in the Department of Assessment records, and a certificate
of mailing from the post office. |
Ability
to Redeem a Ground Rent when the Ground Rent Owner (Landlord) cannot be located
(HB 1030):
| It
is often difficult to find out who the actually Ground Rent Owner is.
The General Assembly passed HB-1030, which takes affect January 1, 2004 and
outlines a procedure to obtain "fee simple" title when the Ground
Rent Owner cannot be found. This procedure only applies to "redeemable"
ground rents, which generally were made after April 9, 1884. (Most
ground rents made before April 9, 1884 are not redeemable.) |
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To obtain "fee
simple" title when you cannot find the owner of the Ground Rent, follow
these steps: |
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Give notice of intent to
redeem to the last known Ground Rent Owner at the last known address by
first class mail. Wait 30 days.
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Go
to the State Department of Assessments and Taxation (SDAT) at 301 West
Preston St, Rm 801 and pay a $50 fee.
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Document
to SDAT that notice was given as stated in step 1., above.
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SDAT
will post a "notice of redemption" on its web site. Wait 90
days.
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At
the end of 90 days, pay the Redemption Amount to SDAT (To determine the
Redemption Amount, divide the annual ground rent by 0.06; for example: $120
/ 0.06 = $2,000). the byan Over
the past month, a number of questions have come in about ground rents, one of
the most confusing and misunderstood aspects of real estate in the region.
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Pay
3 years worth of Ground Rent to SDAT.
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Provide
SDAT with an affidavit, using SDAT form, that the Ground Rent Tenant has not
received a bill for Ground Rent Due or other communication from the Landlord
during the 3 years immediately before filing for the Redemption with SDAT,
the last payment of Ground Rent was made to the Landlord identified in the
affidavit and sent to the same address as the notice in Step 1, above.
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SDAT
will issue a "Ground Rent Redemption Certificate" to the
Tenant. When the Tenant records the Certificate in the County/City
Land Records Office where the property is located, the property immediately
becomes "in fee simple" and the Ground Rent is extinguished.
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If
the Ground Rent Owner (Landlord) or any creditor of the Landlord ever
surfaces, he may file a claim with SDAT for payment of the redemption amount
and any past due ground rent (but may not claim any interest earned on these
funds while held by the State). |
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If
the Ground Rent Owner does not claim the redemption amount, the money is
forfeited to the State after a period of 20 years. |
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Forms to complete this process
can be found at
http://www.dat.state.md.us/sdatweb/ground_rent.html |
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