For those of you not based in one of the few states in which ground rent is applicable you will likely not have a clue what I am talking about here, but the gist of this is that I thought that as of September 30, 2010, if the ground rent owner has not filed their information relating to ground rents that they own with our local state department of assessments and taxation (SDAT) their ground rent will be extinguished and the property would then revert to a fee simple ownership.
For those of us here in Maryland that would mean that we would no longer have to take an escrow from the seller equal to ground rent payments for 3 years as well as a $500.00 legal fee escrow; so for example, if the ground rent is $120.00/year, we have to hold $860.00 from the seller at closing, IF the seller is unable to provide us the name and address of the ground rent owner so that we can determine whether or not the ground rent is paid current. AND we have to hold that escrow for 3 years.
As you might imagine, that is an accounting nightmare for those of us working in Maryland on properties that are subject to this ground rent. Every month I have to go through my escrow account to see if I am holding any monies that need to be refunded, then I have to try to find what was my seller at the time, etc...
Anyway, the statute I am referring to (Real Property Article § 3-102(a), 8-107, 8-701 to 8-709 (2007 Supplement) would mean that if the ground rent owner has not registered their ground rents then they would be subject to losing their right to file a lien, get back rents, etc.
I thought that this statute was just going to phase in but I have now been advised that the ground rent owners have filed a class action law suit alleging that the taking of their lien rights is a taking of their property and that they would be owed damages. If they are not paid damages then the situation becomes a constitutional issue- the taking of property without compensation.
So, I will stay tuned to this issue and keep you all informed.
As always, I thank you for your interest in my rants and ravings.