If you don’t know what ground rent is, then you have finally come to the right place. The interesting thing in a lot of cities is that the ground that the property sits on is not owned by you. This dates back to the mid 1800′s. My ground rent is approximately $75/year and the owner of the property can collect this money. I am in the process of finding the owner of this land and pay them accordingly. In 2004, legislation was passed to allow the homeowner to “redeem” the ground by paying a buy out fee.
Maryland will calculate a percentage based on when the ground rent for the property was first established. After doing some spelunking on the the web, I found that my ground is redeemable for $75 divided by .04. How did Maryland come up with this number? No idea. In the area, this is not a deterrent for people to buy in the city. It is assumed that ground rent will be paid. However, if the owner of the ground does not collect, for, let’s say, 5 years, only 3 years of the ground rent is payable if they don’t pay attention. As of late, they are suing the people to get the money.
I’m thinking this is ridiculous. Why should I pay someone for land that my house is sitting on? Craziness. I will do some calculations and think whether or not it is worth paying off the ground rent. The owner HAS to sell it to me. He is obligated by the state of MD to sell it to me. But is it worth it? Anyone else have to deal with this?