Leaders of the Greater Baltimore Board of Realtors, which for years served as an advocate for ground rent owners, are criticizing some of them for rushing to seize houses of delinquent rent-payers ahead of a recent change in state law and are proposing to help affected homeowners.
The Realtors are talking with the Community Law Center in Baltimore about using their charitable foundation to help pay for review of ejectment lawsuits to ensure that they were conducted properly and that fees are "reasonable."Ejectment was abolished by the General Assembly this year as part of an overhaul of a nearly 400-year-old system. Ground rent owners now must file a lien against the home to recover their debt, and homeowners can keep any equity remaining after the debts are repaid through a settlement or a foreclosure. Under the old law, a ground rent owner could seize a house through ejectment, resell it and keep all the proceeds.
The new laws did not take effect until July 1, however. Realtors, Law Center officials and others said they grew interested in helping homeowners after learning that 154 ejectment lawsuits were filed in Baltimore Circuit Court on the last business day before the law changed. About 300 suits -- more than were filed in many full years --were filed in June, bringing the number of active cases in Circuit Court to about 775.
"We all know that there's an exhaustive notification process and that people often do ignore notices," said Vito Simone, vice president of the Realtors group. "But some of the ground rent owners might be predatory in their practices. Are they really trying to just get paid, or are they trying to take the house?"
Added Joseph T. Landers III, executive director of the Greater Baltimore Board of Realtors, "It's one thing if someone is going to collect on a debt and collect what they're owed, but this is more like robbery. To lose all the equity they've accrued over all those years is just wrong.
"You would think that after all the fervor that came out of the General Assembly session, that people would step back and take a different approach to this."
The General Assembly's scrutiny of the ground rent system followed a series of articles in The Sun that showed how a small number of investors had used their power under the law to seize hundreds of homes in Baltimore during the past few years over back ground rents as meager as $24.
On Tuesday, tenants at 1830 E. 29th St. in Baltimore were surprised when sheriff's deputies came to transfer the property's ownership to the ground rent owner. The mother and her teenage daughter who lived there were allowed to stay, according to Sheriff's Lt. Deborah Claridy.
The department has no choice but to follow the old law, Claridy said. Six more ejectments are scheduled between now and early September, she said.
Homeowners rarely win ejectment cases and often end up paying fees of 20 to 50 times the amount of back rent owed to settle and keep their homes. An estimated 80,000 Baltimore homeowners pay rent on the land under their homes; ground rent also exists in Baltimore County and Anne Arundel County.
Ground rent owners fought the elimination of ejectment, saying many homeowners would refuse to pay their rent without the threat of losing their homes, and one has filed suit seeking to have the parts of the reform legislation declared unconstitutional.
The Realtors group traditionally lobbied for the rights of ground rent owners but shifted its stance during the recent legislative debate.
"Even though we didn't necessarily like removing one of the benefits of [property] ownership, which is what ground rent is, this is different," Landers said. "From the beginning, we were very clear that we had problems with people being stripped of all their equity."
Separately, the Community Law Center is considering offers by a mortgage lender and a real estate broker to provide loans to homeowners facing ejectment or to help them refinance or sell their homes, said Robert Strupp, director of research and policy.
That would come in addition to a new program in the state Department of Housing and Community Development that authorizes low-interest loans to homeowners to buy out their ground rent leases.
Anyone who is facing ejectment or who has lost a home recently to ejectment can call the Community Law Center at 410-366-0922.