Ground rent verdict was correct

October 28, 2011

Contrary to The Sun's editorial position, justice has been done in the court's decision regarding ground rents! A basic premise of our Constitution is that private property shall not be taken without just compensation.

The Sun continues to ignore the fact that although called a "rent," ground rents can best be understood as a mortgage on which the property owner pays interest only at a fixed rate semi-annually and is never obligated to pay the principal, but has the legal right to pay the principle ("redeem the rent") at any time on 30 days written notice to the ground rent owner and receive fee simple ownership.

Moreover, the ground rent represents a first lien on the property coming in front of any mortgages and is only subordinate to property taxes. Perhaps if they were known as "ground mortgages" instead of "ground rents," the owner of the house (leasehold owner) would have a better understanding of their legal obligation and exposure.

Let me give another example to clarify the situation. If oil or gold were discovered on the land, the homeowner would receive any royalties, not the ground rent owner. Isn't it strange that for some 200 years there was no real problem with ground rents? Title companies routinely noted the existence of a ground rent in their reports. Mortgage service companies routinely included ground rents along with taxes in their escrow collection to protect their interest.

Buyers were aware of the existence of a ground rent. So one must wonder, what has changed in recent years that created the problem now? Could it be sloppy work by title companies and real estate brokers and the wholesale of mortgages outside of Maryland?

Benedict Frederick Jr., Pasadena

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