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Understanding Ground Rent In Maryland
Bud Freedman editou esta página 3 meses atrás
- 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 know if a residential or commercial property undergoes ground rent? What if I can not contact the ground lease holder? What happens if I fail to pay ground rent? What does it indicate to redeem ground rent? How much does it cost to redeem ground lease?
What is Ground Rent?
In specific scenarios, a homeowner owns your home they reside in however not the land your home sits on. Someone else (the ground lease holder) owns the land and rents the land to the homeowner. Under Maryland law, a ground lease holder is entitled to lease payments from the owner of the home that lies on their land. These payments are referred to as ground lease.
Ground rent is most common in the Greater-Baltimore real estate market but exists throughout Maryland. Ground lease payments usually vary from $50 to $150 annually and are normally paid semi-annually (two times a year). The language of the ground lease will set out the terms and conditions of payment. A ground rent lease is generally for 99 years and restores indefinitely.
Ground lease deals are different from regular landlord and renter relationships. This is due to the fact that the ground lease owner has no right to take back any residential or commercial property unless the tenant does not pay rent. That is, the ground lease holder does not have a reversionary right to the residential or commercial property or any structures constructed on it unless the homeowner stops working to make the needed payments. If the leaseholder is present with their ground lease payments, the residential or commercial property remains under their control.
The homeowner is responsible for upkeep of the land and any enhancements on the land, including enhancements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The property owner has the authority to alter, redesign, and rebuild the residential or commercial property as they wish, however they need to ensure that their actions preserve the value of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole obligation of the homeowner to acquire and pay on any utilities that service the residential or commercial property.
How do I know if a residential or commercial property undergoes ground rent?
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 suitable ground lease. If the residential or commercial property is listed as “Fee Simple,” the listing includes both the house and the residential or commercial property (ground) in the purchase cost - there is no ground lease. If there is an of “Ground Rent” in a listing, it shows that a fee must 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 acquire a home, you can determine if a residential or commercial property goes through payment of a ground lease by looking 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 located. In most cases, a deed for multiple ground rents owned by one owner will be composed. Land records can be discovered on the website mdlandrec.net.
Maryland law needs that ground lease holders sign up ground rent 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 see the registration status through SDAT’s Real Residential or commercial property Search. (When viewing the residential or commercial property record, click on “View Ground Rent Redemption”)
If a ground lease is registered for your residential or commercial property, you are obliged to pay the ground rent to the ground lease holder. You ought to contact the owner noted on the registration kind concerning payment of the ground lease or to inform the owner that you wish to redeem your ground lease. It is likewise your obligation 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 tenant (property owner) or leaseholder and you have a concern, it is an excellent concept to contact a lawyer.
Read the law: Md. Code, Real Residential Or Commercial Property § 8-703
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