Under state law, most people who are required to pay ground rent can
redeem -- or buy out -- their leases. The rent holder must honor such a
request.
Redeeming makes economic sense only if the homeowner plans to own the
house for a long time, though it also buys the security of never having
to face an ejectment lawsuit if a payment doesn't get made.
The person paying the rent must send both a certified letter and a
first-class letter to the ground lease holder's last known address. The
mortgage company should have the address if it pays the ground rent out
of an escrow account. It should be listed on a bill if the homeowner is
billed directly. As a fallback, the name and address of the ground rent
owner's registered agent -- if it is a corporation -- can be found on
the Maryland Department of Assessments and Taxation Web site.
Leases negotiated between April 5, 1888, and July 1, 1982, can be
redeemed by paying 16.66 times the annual rent. Buying out a $96-a-year
rent, for example, would cost about $1,600. A ground rent payer usually
needs a lawyer to do a deed transfer, which could cost an additional
several hundred dollars.
There are exceptions:
Only leases written before July 1, 1969, are redeemable at any
time. After that date, leases must be in effect for either three or
five years, depending on when they were executed, before they can be
redeemed. For example, someone buying a property today with a newly
established ground rent on it would have to pay rent for three years
before redeeming it.
Leases negotiated before April 8, 1884, generally are not
redeemable unless there is a redemption provision written into the
lease. One exception is on properties that have been condemned by
Baltimore.
A homeowner who has not received a bill or any other communication from
the ground rent holder in three years, and does not get a response from
the holder within 30 days after asking to redeem the lease, may apply
to the state Department of Assessments and Taxation for the redemption.
Information and the required forms may be found on the Internet.
The homeowner must apply for the buyout in person at the department's
charter division office on Preston Street in Baltimore. He or she must
provide documentation that the ground rent holder received proper
notification. The department then posts a notice on its Web site that
it has received an application to redeem the ground rent. That notice
must stay up for 90 days.
After 90 days, if there is still no response, the homeowner can
complete the buyout by supplying an affidavit saying there has been no
communication from the ground rent holder in three years, and paying
the redemption amount plus overdue rent, up to three years' worth. The
money is held in a separate state fund; the ground rent holder has up
to 20 years to claim it. If he does not, then the state keeps the
money.
