Last day to register Maryland ground rents

State law calls for unregistered ground rents to disappear

September 28, 2010|By Jamie Smith Hopkins, The Baltimore Sun

Ground rents that are not registered with the state by today will cease to exist under state law, one of the changes prompted by a Baltimore Sun investigation into the centuries-old system.

The state estimates that investors hold ground leases on about 115,000 properties in Maryland, mostly in Baltimore, entitling them to collect small rents on the land from the homeowners. More than 65,000 have been registered since the state Department of Assessments and Taxation began taking applications in 2007. Ground rent owners must register in person todayf or postmark their application before Thursday.

Ground rent dates to Colonial times in Maryland and was used by rowhouse developers in the 20th century as a way to make purchases more affordable. But a Sun series in 2006 found that a handful of investors seized hundreds of homes over unpaid bills, reselling them and legally keeping the proceeds. Some of the homeowners said they never received the bills.

Intent on reform, the General Assembly passed laws that prohibited such "ejectments," barred new ground rents and required registration of existing ones. The registry form is online at dat.state.md.us/sdatweb/Register_groundrent.htm.

But a lawsuit challenging the registry law leaves the fate of unregistered ground rents in doubt.

"The statute requires that ground-rent owners register ground rents that are already recorded in the land records, and if we don't, we lose our rights," said plaintiff Charles J. Muskin, a trustee for his grandfather's estate, which includes about 300 ground rents. "We find that offensive and counter to constitutional law."

Muskin, an Anne Arundel County Circuit Court master, said the registry requires information that most ground-rent owners wouldn't know, such as the deed reference and the date the lease was created. Hiring a land record researcher to find it increases the costs in addition to the registry fee, he said. The state is charging $10 for the first ground rent and $5 for all others registered in the past 12 months.

The point of the law is give homeowners — along with buyers, title companies and others involved in sale transactions — a point of contact for ground-rent owners, said Matt Fader, an assistant attorney general in Maryland. Title companies say those owners are sometimes impossible to track down because the deeds can have outdated contact information or nothing but a name.

"The state's position is that the registry act is constitutional," Fader said.

jamie.smith.hopkins@baltsun.com

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