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Understanding Ground Rent In Maryland
Aracely Hannah heeft deze pagina aangepast 2 weken geleden
- Real Estate and Other Housing
- Homeownership
- Understanding Ground Rent in Maryland
Understanding Ground Rent in Maryland
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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 stop working to pay ground rent? What does it indicate to redeem ground lease? How much does it cost to redeem ground rent?
What is Ground Rent?
In certain situations, a house owner owns your home they live in but not the land the house rests on. Another person (the ground lease holder) owns the land and rents the land to the homeowner. Under Maryland law, a ground lease holder is entitled to rent payments from the owner of the home that lies on their land. These payments are called ground lease.
Ground rent is most common in the Greater-Baltimore property market but exists throughout Maryland. Ground rent payments generally vary from $50 to $150 per year and are normally paid semi-annually (two times a year). The language of the ground lease will set out the terms of payment. A ground rent lease is usually for 99 years and renews forever.
Ground lease offers are various from normal proprietor and tenant relationships. This is because the ground lease owner has no right to take back any residential or commercial property unless the occupant 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 constructed on it unless the homeowner fails to make the required payments. If the leaseholder is current with their ground rent payments, the residential or commercial property stays under their control.
The homeowner is accountable for maintenance of the land and any enhancements on the land, consisting of improvements made to the home itself (Kolker v. Biggs, 203 Md. 137, 141 (1953 )). The house owner has the authority to change, remodel, and reconstruct the residential or commercial property as they want, but they must ensure that their actions protect the value of the land (Crowe v. Wilson, 65 Md. 479, 484 (1886 )). Additionally, it is the sole obligation of the house owner to acquire and pay on any utilities that service the residential or commercial property.
How do I know if a residential or commercial property is subject to ground lease?
When a residential or commercial property is noted for sale, the residential or commercial property description must list whether the residential or commercial property has any relevant ground lease. If the residential or commercial property is noted as “Fee Simple,” the listing consists of both your house and the residential or commercial property (ground) in the purchase rate - there is no ground lease. If there is an indicator of “Ground Rent” in a listing, it suggests that a cost 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 buy a home, you can determine if a residential or commercial property goes through payment of a ground rent by looking at the deed. Ground rent deeds are submitted in the land records of the Circuit Court in the county where the residential or commercial property lies. In most cases, a deed for numerous ground rents owned by one owner will be written. Land records can be discovered on the website mdlandrec.net.
Maryland law requires that holders sign up ground rent leases on the Maryland State Department of Assessments and Taxation’s (SDAT) Ground Rent Registry. If you are unsure that your residential or commercial property has a ground rent, 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 lease to the ground lease holder. You ought to get in touch with the owner listed on the registration kind concerning payment of the ground lease or to notify the owner that you wish to redeem your ground lease. It is also your responsibility to inform the ground lease holder if you alter your address or transfer ownership of the residential or commercial property. If you are a ground rent occupant (property owner) or leaseholder and you have a question, it is a great idea to call a lawyer.
Read the law: Md. Code, Real Residential Or Commercial Property § 8-703
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