The use of ground rents is one that comes to us from colonial America. They are land leases for the land that homes are built on, originating from grants given to aristocrats from the English Royalty. Now some individuals are using them to take homes from others in Baltimore. And these ground rents have more power than mortgages and other debt services in their taking ability.
While such an archaic practice still goes on in many cities, and in some instances makes logical sense, the powers entrusted with the landowners are huge and should probably be revisited in the near term. To give the landowner the right to take property worth hundreds of thousands over hundreds of dollars is a travesty that should be addressed.
It is my impression that there was very little pressure to pay these ground rents in a timely manner when they were held by a small establishment of trustees and the very wealthy, but now that they have been turned into commodity that is being exploited it should be addressed.
The Baltimore Sun is running a multi-part expose on some of issues surrounding ground rents. Here are some of their findings.
• In nearly every aspect, the law favors ground rent holders. Homeowners rarely win once a lawsuit is filed. And the longer a case goes on, the more it can cost the homeowner.
• No other private debt collectors in Maryland can obtain rewards so disproportionate to what they are owed. In contrast with a foreclosure, the holder of an overdue ground rent can seize a home, sell it and keep every cent of the proceeds. To prevent a seizure, homeowners almost always have to pay fees that dwarf the amount of rent they owe.
• State law puts the onus on property owners to track down their ground rent owner and make payments, though it’s sometimes next to impossible to find that information. No registry of ground rent holders exists, and property deeds typically contain only the barest of details about them.
• Some investors seek out overdue ground rents to purchase, then file lawsuits to take the property built on the land. In some cases, the legal owners of these houses have died, and the law is not clear about whether investors must give relatives a chance to satisfy the debts and keep the homes.
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