Buyer usually takes care of ground-rent title search

November 13, 2005

We sold our home in July and it had a ground rent worth $120 a year. The buyer gave us $2,000 to redeem the ground rent at settlement. The company handling the settlement wanted to hold $1,000 for any fees associated with searching and recording the ground rent for 60 years. An original title search for the home and recording monies totaled $230. We were also told we may have to pay an additional amount totaling $5,000 to cover expenses to pay for "fees, recording, searches" etc. We agreed to only $1,000.

We have since decided this was too much to pay and called the title company to get our funds returned. We have been told many different reasons for not being able to speak to the agent or anyone that knows about the case.

I would hate to file a small claims case or take a day off work to drive about 50 miles one way to this office to get to the bottom of this. Is there anything we can do to get our money back and do you recommend contacting state government? Are there regulations concerning these fees?

Ground rents may be sold and transferred independently of the leasehold property.

Therefore, when a ground rent is redeemed, a separate 60-year title search is often done to verify ownership. A title company is justified to charge extra for the title search, recording and related expenses involved in insuring title to the property interest owned by the holder of the ground rent. These title fees are in addition to the $2,000 paid to the ground-rent owner to redeem the ground rent.

Although there is no law regulating how much lawyers or title companies can charge for searching and examining titles to real estate, most providers have standard charges. Your settlement statement should show how much the title company charged for the title search and examination associated with the leasehold interest. Charges related to the ground rent should be similar.

You do not indicate why you are paying these title charges rather than the buyer. In Maryland, the buyer customarily pays the cost of title search and title examination. If your real estate contract did not require you to pay these charges, they normally would be the buyer's responsibility. I suggest you review your contract on this point.

I can't think of a reason why you would have to pay up to $5,000 for a simple ground rent redemption. Even $1,000 seems excessive. If the title company does not respond to your concerns, you should complain to the Maryland Insurance Administration. The number is 800-492-6116.

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