Ground rent bills assailed

Measures to alter system, end ejectment called unconstitutional

General Assembly

March 05, 2007|By June Arney | June Arney,SUN REPORTER

Ground rent owners and some legal scholars contend that a number of proposed bills to change the state's ground rent system are unconstitutional.

They have focused their criticism in Annapolis on measures that would wipe out ground rents if their owners don't list them in a public registry within three years and forbid rent owners from seizing people's homes because of unpaid ground rent.

The constitutional challenges have lengthened the conversation - adding hours to hearings in both chambers. But some of the lawmakers who have pushed hardest for change say they have not slowed reform momentum or relegated the bills to the world of "summer study" - where legislators refer thorny issues they have not been able to agree on during their 90-day session.

Still, the debate has given opponents of changes in the centuries-old property-ownership system something substantive to argue, and it has forced supporters to concede that some proposals might need tweaking.

"There is some work we need to do on this package, but overall it's very well thought out," Joseph C. Bryce, top policy and legislative aide to Gov. Martin O'Malley, said while testifying last week on behalf of the governor's office.

The two bills being debated on constitutional grounds are part of a package of more than a half-dozen measures being considered in the House and Senate. O'Malley supports the reform package. The General Assembly has already approved an emergency bill that bans the creation of new ground rents.

"It does not seem to be a defect in the legislative package," said Del. Samuel I. Rosenberg, a Baltimore Democrat who is co-sponsoring ground rent bills. "The General Assembly has the power to substitute one remedy for another, provided that the individual that has been wronged still gets payment."

The ground rent proposals followed an investigative series by The Sun last year that documented how a few of Baltimore City's largest rent owners have used state laws rooted in Colonial practices to seize hundreds of homes and charge homeowners thousands of dollars in fees over delinquent bills as small as $24. The stories also documented that homeowners sometimes are hit with fees or lawsuits even when they were not billed or couldn't find their ground rent owners.

An estimated 80,000 Baltimore City homeowners must pay rent on the ground beneath their homes, and ground rents also exist in parts of Baltimore and Anne Arundel counties.

The office of Douglas F. Gansler, the new Maryland attorney general, has taken the position that extinguishing a ground rent lease if it isn't registered is constitutional. He has not yet addressed Senate Bill 396, the proposal to abolish ejectments, according to a spokeswoman.

Garrett Power, a professor at the University of Maryland School of Law who is an expert on ground rent, said in an interview that he "would argue loud and hard that [a registry] is clearly constitutional." But he said the other bill, to end ejectments and allow rent owners only to place a lien on the property, has serious constitutional issues.

"What the founding fathers were worried about were bills like SB 396," he said.

Byron L. Warnken, a professor at the University of Baltimore School of Law, testified before the Senate Judicial Proceedings Committee last week that eliminating the right to seize a house for nonpayment of ground rent would effectively wipe out the ground rent owner's ownership rights.

"The right of re-entry [to the property] is forever gone," Warnken testified.

The Ground Rent Owners Coalition, which represents about 20 of the largest ground rent owners, contends that the threat of ejectment is the only weapon they have to make homeowners pay their rent. "Tenants are no longer likely to pay ground rents unless they are good people who naturally pay their bills. However, there are many tenants who will not pay ground rent voluntarily," the group said in a statement.

"The bottom line is you don't need to throw out a perfectly good procedure because the end result is not palatable for those very few cases we've heard about," R. Marc Goldberg, an attorney who owns ground rents and acts as a coalition spokesman, testified in the Senate hearing last week. "The issue I have with the bill is it takes something I own and turns it into something I didn't bargain for. The idea is to get the ground rent paid, and having this remedy gets ground rent paid."

Opponents propose a moratorium on ejectments for a year while lawmakers study the matter. But that idea seems to have garnered little traction in Annapolis.

"What's the middle ground?" Sen. Lisa A. Gladden, a Democrat from Baltimore and sponsor of several reform bills, asked during a hearing last week. "It's clearly not a moratorium for a year, because then it's going to be 2008 or 2009" before changes are made.

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