Cecil Calvert brought them over

June 06, 1999|By Charles Belfoure

A history of ground rents

The roots of the ground rent system go back to medieval England, when tenant farmers paid rent to landlords in either money or farm goods.

When Cecil Calvert, the second Lord Baltimore, received a land grant encompassing the present state of Maryland from King Charles I, it was on the condition that Calvert pay the crown a yearly ground rent of two Indian arrowheads and one-fifth of all gold and silver found in the state.

Calvert brought the ground rent system with him when he colonized Maryland in 1634. Baltimore's system started in 1742, when Thomas Harrison leased lots on his property near the present Baltimore and Gay streets.

Throughout Baltimore's history, the ground rent was a blessing for both workingman and homebuilder. It helped Baltimore have one of the highest homeownership rates in America.

A machinist in 1911 who made only $2.83 a day was able to afford a two-story rowhouse that typical- ly sold for $1,200 subject to a $50 ground rent. But if the capitalized value of the ground rent was included in the sales price, the total would be $2,033 and put the purchase out of reach.

When middle-class Baltimoreans started moving to suburbs in the early 1900s, the ground rent usually did not follow. Developed lots in places such as Walbrook, Roland Park and Arlington were always purchased in fee simple.

Few ground rents are created these days because of a 1982 law requiring redemption at an economically unattractive 12 percent. It'll probably cost about $400 in legal fees to create a rent today.

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