Ground rent that's past due has 3-year limit


March 15, 1998

Dear Mr. Azrael:

Approximately 27 years ago we purchased a house that had "ground rent." We made a monthly payment to the bank and they in turn paid taxes, interest, principle and "ground rent." About four years ago, the mortgage was sold to a bank in North Carolina and I discovered they were no longer making "ground rent" payments.

The "ground rent" is 6 percent of $4,000 or $240 per year and has not been paid in four or five years. The bank told me that I was only responsible for three years' rent or $720.

Can you verify the truth of this, or advise what is my situation? I have since paid off the mortgage but am concerned about "ground rent" liability. I do not know who owns the land the "ground rent" is paid to.

Daniel P. Dunlap

Severna Park

Dear Mr. Dunlap:

If and when the owner of the ground rent demands payment, you will be responsible only for three years of ground rent. Collection of ground rent beyond three years will be barred by the statute of limitations. Upon the sale of your home you may be required to place $720 in escrow with the settlement agent for three years in case a claim for past-due ground rent is made against the purchaser of your home.

A title search would reveal the record owner of the ground rent on your home. But there is no obligation on your part to alert the ground rent holder that rent is past due.

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Pub Date: 3/15/98

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