Legal action may be needed to recover ground rent

MAILBAG

March 16, 2003

Dear Mr. Azrael:

My widowed grandmother had received ground rent payments for the property of a house she used to live in many years ago. Until recently, there had never been a problem receiving the payments, even with the house having many different owners over the years.

Unfortunately, it seems that the last time ownership changed, the new mortgage company somehow didn't follow through with making the ground-rent payments.

We have tried writing letters to the owner, explaining that ground rent is owed on the property, and that they should forward the letter to their mortgage company. We never received a reply. We even have tried stopping by to speak to the current resident, but it seems that no one is ever home.

They have an unlisted phone number, so we cannot call them.

We called a title company, and they said they could do a title search but there was no guarantee they would be able to identify the mortgage company.

Any suggestions for how we could get this resolved?

At this point, $540 is owed in back ground rents, and the ground rent is due twice a year in payments of $60.

Brandon Williams

Parkville

Dear Mr. Williams:

Maryland law provides an effective remedy for nonpayment of ground rent.

The remedy is called "ejectment." It applies in a case when a 99-year ground lease that is renewable forever is at least six months in arrears and the lease instrument gives the ground rent owner the right to re-enter for nonpayment of rent.

The ground rent owner must first send the leasehold owner (tenant) a bill for the ground rent due. The bill must be sent by certified mail, return receipt requested, to the tenant's last known address. If the ground rent remains unpaid for 30 days after the notice was sent, the ground rent owner may bring a legal action for possession of the property, including any building constructed on the property.

The tenant must be named as a defendant in the lawsuit, and others having an interest in the property, such as mortgage holders and lien holders, also should be named. Appropriate efforts must be made to serve the papers on the defendants.

If the tenant cannot be personally served and there is no tenant in actual possession of the property, a property posting may be made. If no defendant responds to the lawsuit and pays the back ground rent and (if authorized by the ground lease) attorney's fees, the court will enter a judgment awarding possession of the property to the ground-rent owner, who is entitled to execute on the judgment by entering the property and evicting occupants.

The tenant or others claiming an interest in the leasehold still have an opportunity to avoid losing the property. They have six calendar months after execution of the judgment for possession to commence a court proceeding to obtain relief from the judgment and to pay the ground rent, arrears and all costs awarded against them.

Within the six-month period, a mortgage holder also can defeat the ejectment by paying all costs and damages sustained by the ground-rent owner and by performing all covenants and agreements that are to be performed by the tenant under the ground lease.

For further information on your rights of ejectment, I suggest you consult your attorney, since strict compliance with Maryland statutes is required to gain possession of the property.

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