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 understand if a residential or commercial property undergoes ground lease? What if I can not call the ground lease holder? What occurs if I stop working to pay ground lease? What does it suggest to redeem ground rent? Just how much does it cost to redeem ground lease?

What is Ground Rent?

In certain circumstances, a property owner owns the house they reside in however not the land your home rests on. Someone else (the ground lease holder) owns the land and leases the land to the house owner. Under Maryland law, a ground lease holder is entitled to lease payments from the owner of the home that is located on their land. These payments are called ground rent.

Ground rent is most typical in the Greater-Baltimore property market however exists throughout Maryland. Ground lease payments typically vary from $50 to $150 annually and are usually paid semi-annually (twice a year). The language of the ground lease will set out the conditions of payment. A ground rent lease is normally for 99 years and renews forever.

Ground lease deals are various from regular landlord and tenant relationships. This is due to the fact that the ground lease owner has no right to reclaim any residential or commercial property unless the tenant does not pay rent. That is, the ground lease holder doesn't have a reversionary right to the residential or commercial property or any structures constructed on it unless the house owner stops working to make the needed payments. If the leaseholder is existing with their ground rent payments, the residential or commercial property stays under their control.

The homeowner is accountable for maintenance of the land and any improvements on the land, consisting of improvements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The house owner has the authority to modify, renovate, and rebuild the residential or commercial property as they want, however they need to make sure that their actions maintain the value of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole responsibility of the homeowner to procure and make payment on any utilities 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 listed for sale, the residential or commercial property description should list whether the residential or commercial property has any relevant ground rent. If the residential or commercial property is listed as "Fee Simple," the listing consists of both the home and the residential or commercial property (ground) in the purchase price - there is no ground lease. If there is a sign of "Ground Rent" in a listing, it shows that a cost needs to be paid to the owner of the ground on which the residential or commercial property sits.

If you own a home, or are looking to purchase a home, you can figure out if a residential or commercial property goes through payment of a ground rent by looking at the deed. Ground rent deeds are filed in the land records of the Circuit Court in the county where the residential or commercial property is situated. Oftentimes, a deed for multiple ground rents owned by one owner will be composed. Land records can be discovered on the site mdlandrec.net.

Maryland law needs 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 not sure that your residential or commercial property has a ground lease, you can view the registration status through SDAT's Real Residential or commercial property Search. (When seeing the residential or commercial property record, click "View Ground Rent Redemption")

If a ground lease is signed up for your residential or commercial property, you are obliged to pay the ground lease to the ground lease holder. You ought to get in touch with the owner listed on the registration kind relating to payment of the ground rent or to notify the owner that you want to redeem your ground rent. It is likewise your responsibility to inform the ground lease holder if you change your address or transfer ownership of the residential or commercial property. If you are a ground lease occupant (homeowner) or leaseholder and you have a question, it is a great concept to call an attorney.

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