End ground rent evictions, O'Malley says

State Of The State

February 01, 2007|By June Arney and Fred Schulte | June Arney and Fred Schulte,sun reporters

In his strongest comments yet on a central issue of ground rent reform, Gov. Martin O'Malley called yesterday for an end to the "cruel and antiquated practice of using ground rents to evict families from their homes."

His appeal for action - included in his State of the State address - gave a high-profile boost to those seeking to prohibit the most devastating action that can befall homeowners who owe ground rent.

"Having the administration on board is huge, period," said Sen. Brian E. Frosh, chairman of the Senate Judicial Proceedings Committee. "It's a strong commitment."

An emergency bill to ban new ground rents is gaining widespread support in the General Assembly. Legislators are responding to an investigative series in The Sun in December that documented how a few of the largest ground rent owners in Baltimore have used arcane state laws to seize homes or charge homeowners thousands of dollars in fees over delinquent bills as small as $24.

O'Malley spokesman Rick Abbruzzese said that apart from the emergency legislation the governor's office is supporting, the governor is "very interested" in working with the General Assembly on other reform proposals being hammered out by legislators.

"We need to find a way to revamp the system so that people don't get evicted because of one small ground rent," Abbruzzese said. "That's fundamentally unfair."

Still, it remains to be seen how the coming legislation will be received.

"It's impossible to predict before you see the forces at work," Frosh said. "I think the ground rent landlords are in retreat. My guess is that the guys who have exploited this are going to come in and try to hold onto some vestige of this."

R. Marc Goldberg, a ground rent owner who has acted as a spokesman for the industry, could not be reached for comment yesterday. Gary Alexander, a lobbyist for ground rent owners, said he was reserving judgment until he sees specifics of what the governor is proposing.

Carolyn Cook, deputy executive vice president for the Greater Baltimore Board of Realtors, said the group agrees it is unfair for people to lose their property for failing to pay overdue ground rent. The Realtors want to prohibit home seizures, she said, but protect a ground rent owner's legal status as holder of a "priority" lien against a property.

"We're very interested in modernizing the system so it reflects the modern reality," Cook said. "We work hard to put people in homes. We don't want to see people lose them over a small unpaid ground rent."

Kathleen S. Skullney, staff attorney with Legal Aid Bureau Inc. in Baltimore, said she was pleased with O'Malley's statement.

"As lawyers representing the victims of this practice, we are really glad that it is finally recognized for what it is, simply an unconscionable taking of property," she said.

But Katherine Kelly Howard, general counsel for Regional Management Inc., which manages ground rents and residential properties in Baltimore and Baltimore County, termed O'Malley's comments "unfortunate."

She also said The Sun series had "created a climate in which a very complicated issue isn't likely to get a reasonable review."

She testified Tuesday in Annapolis before Frosh's committee, calling for the formation of a task force of interested parties to recommend reforms.

O'Malley has spoken out about ground rent before.

"You know," he said in January, "people shouldn't lose their homes over failure to pay some $24 ground rent that they forgot about or weren't notified about. I think the time is right for some reform on that. ... Ground rents can be a pesky impediment to redeveloping our older areas and cities."

june.arney@baltsun.com fred.schulte@baltsun.com

Sun reporter Laura Smitherman contributed to this article. To read previous articles, go to baltimoresun.com/groundrent

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