Ground rent case settled -- for $18,000

The Canton family nearly tossed out of its rowhouse last week over what began as a $24 ground rent bill will get to stay, but only by paying nearly $18,000 in fees and other costs.

Vernon Onheiser got into trouble after attorney Heidi S. Kenny, representing ground rent owner Neighbor Saver LLC, sued Onheiser's parents for failing to pay the bill--even though both had been dead for nearly a decade. Now Neighbor Saver has agreed to end its claim to the house.

"Heidi met with her clients who are investors in ground rent, and they decided to do this as a Christmas gift to the Onheiser family," said John H. Denick, an attorney who has also represented Neighbor Saver and spoke yesterday for Kenny.

The final bill came to $17,824.92, according to a statement drawn up by Kenny. That doesn't include $400 Onheiser will need to pay to buy out the ground rent.

"I've been crying a lot lately," a relieved Vernon Onheiser said yesterday, less than a week after he first learned he was about to lose the home in the 500 block of S. Milton Ave. that has been in his family for decades. Earlier this year, the home was valued at $161,000.

Onheiser's sister, Patricia Haggan, wrote a personal check for the amount owed, according to City Councilman James B. Kraft, who helped to negotiate the agreement.

The Onheiser case has drawn scrutiny of the little-known area of real estate law related to ground rent, and the practices and fees collected by attorneys who specialize in these cases and property foreclosures resulting from unpaid rents.

Three years of unpaid ground rent accounted for just $72 of Onheiser's total bill, for example. Most of the rest was attorneys' fees, other legal costs and interest on property taxes, which Neighbor Saver says it is entitled to collect under state law.

News of Onheiser's plight outraged Baltimore Circuit Court Clerk Frank M. Conaway, who ordered his staff this week to review all of Kenny's filings to make sure property owners were being protected. He also asked the state's lawyers' disciplinary panel to suspend her license because of her conduct in the case and at least nine others she filed to collect unpaid ground rent from deceased property owners.

Melvin Hirshman, bar counsel for the Attorney Grievance Commission, said yesterday he could not comment.

Records show that Kenny has filed nearly 1,600 lawsuits involving real estate, mostly foreclosure actions, in Baltimore over the past two years. She filed at least 300 other cases in Baltimore and Anne Arundel counties.

Conaway told The Sun yesterday that he has expanded his review of attorneys who handle ground rent, tax sale and foreclosure lawsuits in Baltimore beyond Kenny to make sure they aren't doing what he called "unscrupulous things."

That review, he said, would focus on legal tactics used by a small group of lawyers who he said "consistently sue to get a house and make loads of money." Conaway declined to identify any of the lawyers.

"A lot of people stand around and let this happen because they don't know where to turn," he said. "A lot of people lose their homes, and they don't have to."

Denick said yesterday that he did not know how Kenny could have handled the case any differently. "I am of the opinion that she did abide by the law," he said. "I think she acted properly."

"I hope that the Onheisers have a merry Christmas and a happy new year, and that they appreciate that they have the house," Denick said.

The case shows how rapidly fees can increase. Kenny's bill lists legal fees of $1,200 for herself and $3,000 for Denick, who helped to negotiate the settlement.

The bill also includes $12,854.61 that Neighbor Saver said it was owed in property taxes for 2004 and 2005. Under state law, those who buy property tax liens from the city are entitled to charge homeowners 18 percent interest, which can quickly add up. City records show that the Onheiser rowhouse's total tax bill for both years was less than $4,000. The bill submitted by Kenny doesn't say how the property tax amount was computed.

Kraft said he personally delivered the check for the bill yesterday to Kenny's Baltimore County office.

"I got involved so Mr. Onheiser and his sons would not be thrown out of their house one morning with less than 24 hours' notice," said Kraft.

Court records document that Onheiser signed at least one notice two years ago that was delivered by a process server in connection with the ground rent debt, but Onheiser has said he does not remember that.

Kraft said the family must open an estate and clear up the home's title.

"I have to give credit where credit is due," Kraft said yesterday. "Regardless of the problems that Ms. Kenny has elsewhere, she could have fought this. She could have thrown them out that morning, and she didn't. It's nice when you have a situation where people make certain representations and then they do what they say they're going to do."

Related topic galleries: Litigation, Trials, Lawyers, Foreclosures, Property Tax, Property, Court Administration

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