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What is Ground Rent?
Ground rent is a form of real estate ownership where the land is owned by one entity, but the real propert located on the land is owned by another entity. With a property carrying a ground rent, the homeowner is responsible for payment of a small sum of money each year to the owner of the ground rent. Ground rent properties are very common in Baltimore City.

How can I tell if my property is fee simple or ground rent?
Sellers of real property are required to disclose the existence of a ground rent and the actual amount of the ground rent. Properties that do not carry a ground rent are classified as fee simple.

Researching the Ground Rent Owner or Amount
Ground rents are typically discovered during a detailed title search by a title company. Individuals can research a property's ground rent at the Clarence Mitchell court house in Baltimore City by checking with the recorder of deeds. Ground rents date back to the 1800's and the city has very poor record keeping, so locating ground rent information can sometimes be difficult.

How Much is My Ground Rent?
The ground rent amount is stated in the original property lease. The amount may not be changed. The payment is typically made biannually.

Can the Ground Rent Amount Be Raised?
The ground rent owner may not raise the ground rent or change the redemption rate.

What if I cannot find the Ground Rent Owner?
If you purchase a property that is noted as having a ground rent, but are unable to locate any details regarding the ground rent amount or owner. The limit for back ground rent that can be collected is 3 years. If a buyer has lived in a property for 10 years and the ground rent owner demands payment of ground rent, the ground rent owner can only collect 3 years of past due ground rent and then may ask for future payments.

What happens if I do not pay the ground rent?
The ground rent owner after proper notice may attempt to claim the real property through legal action if ground rent is not paid for an extended period of time.

Redeeming a Ground Rent
A ground rent owner is required by law to sell or redeem the ground rent to the real property owner when requested. The purchase price for the Ground Rent is determined by taking the annual ground rent fee and multiplying it by the redemption rate (typically .04 - .12 depending on the year the lease was created)


Date of Original Lease
July 1, 1982 - Present Day
April 6, 1888 - June 30, 1982
April 8, 1884 to April 5, 1888
April 9, 1884
 

Capitalization Rate
12%
6%
6%
Variable and possibly non-redeemable


Suppose the annual ground rent is $180.00 and created by a lease dated April 1st, 1889. Using the above chart, $180.00/.06 = $3,000.00 The State of Maryland passed the Residential Ground Rent Redemption law, effective January 1, 2004, enabling the owner of a single family residential property who is the tenant under a ground lease on that property to redeem the lease where there has been no communication from the landlord for three years. More Information on this stature- http://www.dat.state.md.us/sdatweb/ground_rent.html.