Rental Ground

In some cases you won’t be able to find the ground owner.  So if you buy a property that is noted as having a ground rent and cannot find the ground owner, your mortgage company will want to escrow the fee amount.  The maximum amount of years they can back track for ground rent in this situation is up to three years.  So if you’ve lived in your home for five years and have no paid any ground rent, the mortgage company will only be allowed to charge you for three years opposed to the full five.  The years following that will be paid as any other ground rental agreement would.
 

Failing to pay your ground rent will lead to serious consequences.  Prior to July 2007 a ground rent owner could take both the house and the land as payment for rent due.  This would leave the owner of the house with nothing.

In the real estate market of Baltimore, Maryland, United States, ground rent is very common. In fact, Maryland is one of few states in the United States that has a history of ground rent.


 

Today, ground rent owners are only entitled to a lien against the property for the amount of past ground rent due.  In addition they are also able to foreclose on this lien just as a bank would do if you failed to pay your mortgage.  However the homeowner will be able to keep any equity he or she has in their home rather than handing it over to the ground rent owner.
 

If you simply want to avoid all the headaches that dealing with your ground rent owner may cause you always have the option to buy the ground.  A purchase price will be determined by the annual ground rent fee divided by a range of standard rates of redemption.  Pricing will vary depending on the year the lease was created.  Nominal legal fees are also to be expected in filing the necessary papers to fulfill this procedure.
 

So whether you wish to pay for ground rent or purchase it outright, there are many options available out there to help make both situations possible for you.