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Understanding Ground Rent In Maryland
janettesheffie edited this page 3 weeks ago
- 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 goes through ground lease? What if I can not call the ground lease holder? What takes place 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 certain circumstances, a homeowner owns your house they live in however not the land the house sits on. Somebody 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 is located on their land. These payments are referred to as ground lease.
Ground lease is most typical in the Greater-Baltimore realty market but exists throughout Maryland. Ground lease payments generally range from $50 to $150 annually and are usually paid semi-annually (two times 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 renews indefinitely.
Ground lease offers are different from regular proprietor and renter relationships. This is since the ground lease owner has no right to take back any residential or commercial property unless the tenant does not pay lease. That is, the ground lease holder does not have a reversionary right to the residential or commercial property or any structures built on it unless the property owner stops working to make the needed payments. If the leaseholder is present with their ground rent payments, the residential or commercial property remains under their control.
The house owner is responsible for upkeep of the land and any improvements on the land, consisting of enhancements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The homeowner has the authority to change, redesign, and reconstruct the residential or commercial property as they wish, however they must make sure that their actions preserve the value of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole duty of the homeowner to procure and pay on any energies that service the residential or commercial property.
How do I understand if a residential or commercial property is subject to ground rent?
When a residential or commercial property is noted for sale, the residential or commercial property description should note whether the residential or commercial property has any suitable ground rent. If the residential or commercial property is noted as "Fee Simple," the listing includes both your house and the residential or commercial property (ground) in the purchase rate - there is no ground rent. If there is a sign of "Ground Rent" in a listing, it indicates 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 wanting to purchase a home, you can figure out if a residential or commercial property undergoes 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. In a lot of cases, a deed for numerous ground leas owned by one owner will be composed. Land records can be found 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 uncertain that your residential or commercial property has a ground rent, you can view 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 bound to pay the ground rent to the ground lease holder. You need to get in touch with the owner listed on the registration kind concerning payment of the ground rent or to notify 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 renter (homeowner) or leaseholder and you have a concern, it is a good concept to get in touch with a lawyer.
Read the law: Md. Code, Real Residential Or Commercial Property § 8-703