Well, Governor Martin O'Malley has signed his first piece of legislation since taking office in January. According to the Baltimore Sun, O'Malley has signed the bill to disallow any new Ground Leases in the State of Maryland. The most affected would be Baltimore City, yet there are still a few in Baltimore County, Anne Arundel County, & Prince Georges County
Most of the USA doesn't even know what ground rent is, since Maryland is the last hold out State to allow for it. According to Wikipedia "ground rent is the rent at which land is let for the purpose of improvement by building; i.e., a rent charged in respect of the land only and not in respect of the buildings" As a Realtor, and a transplanted Hoosier, Ground rent was foreign to me when I moved to Baltimore County. Although I soon found that it was a household phrase here.
When Ground Rent was instituted, it was a way for someone to be able to afford a home since they would not have to pay for the ground, just a small annual rent. In its time, maybe it was a good idea but has since outlived its usefulness.
Ground leases have been around in Baltimore for centuries and I believe have been fought against about the same amount of time. Several Baltimore residents have been evicted from their home due to unpaid ground rent-some as little as $30! This is a very arcane system and I, for one, am glad to see that someone is finally getting something done about it.
The Maryland State Legislature is currently writing new legislation that could remove all ground leases within a decade. I would hope that the new legislation would force redemption at closing or when a current owner wants to refinance their mortgage.
I applaud the legislature for stepping up to the plate on this.
If you are thinking of buying or selling your home in Baltimore County, Anne Arundel County, or Harford County Maryland Check out what LuckNet Real Estate Group can do for you!
Stephen Luckett-Fairfax Realty
Comments(5)