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 goes through ground rent? What if I can not get in touch with the ground lease holder? What takes place if I stop working to pay ground rent? What does it suggest to redeem ground rent? Just how much does it cost to redeem ground lease?

What is Ground Rent?

In particular situations, a house owner owns your home they reside in but not the land your house rests on. Somebody else (the ground lease holder) owns the land and rents the land to the house owner. Under Maryland law, a ground lease holder is entitled to rent payments from the owner of the home that lies on their land. These payments are known as ground rent.

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

Ground rent offers are various from regular property manager and renter relationships. This is since 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 built on it unless the homeowner fails to make the needed payments. If the leaseholder is existing with their ground lease payments, the residential or commercial property remains under their control.

The house owner is accountable for upkeep of the land and any enhancements on the land, consisting of enhancements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The property owner has the authority to change, remodel, and reconstruct the residential or commercial property as they wish, but they must ensure that their actions protect the worth of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole obligation of the homeowner to acquire 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 need to note whether the residential or commercial property has any appropriate ground lease. If the residential or commercial property is listed as "Fee Simple," the listing includes both your house and the residential or commercial property (ground) in the purchase rate - there is no ground lease. If there is an indicator of "Ground Rent" in a listing, it indicates that a charge must 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 purchase a home, you can identify if a residential or commercial property goes through payment of a ground lease by taking a look at the deed. Ground lease deeds are submitted in the land records of the Circuit Court in the county where the residential or commercial property is situated. Oftentimes, a deed for numerous ground leas owned by one owner will be composed. Land records can be discovered 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 uncertain that your residential or commercial property has a ground lease, you can see 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 signed up for your residential or commercial property, you are obligated to pay the ground lease to the ground lease holder. You should contact the owner listed on the registration form concerning payment of the ground lease or to notify the owner that you would like to redeem your ground rent. It is also your responsibility to notify the ground lease holder if you alter your address or transfer ownership of the residential or commercial property. If you are a ground rent renter (homeowner) or leaseholder and you have a question, it is a great concept to contact a lawyer.

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