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Ground rent owners can get help collecting Foreclosure action may force payment


Dear Mr. Gisriel:

Where can I get the rules about ground rents. My mother owns several ground rents, but some of the house owners never pay even after I write demanding payment. What are our legal rights?

Jerry Stone Baltimore

Dear Mr. Stone:

Under Maryland law, if the ground rent payment is more than six months late, then the ground rent owner may file suit to foreclose on the house. But the owner of the house has the right to pay the overdue ground rent plus the ground rent owner's legal costs and expenses and keep the house until the a judge signs a forfeiture decree.

If a demand for payment of ground rent is not made for 20 consecutive years, then the ground rent is presumed to be eliminated.

Finally, a ground rent owner is entitled to three years' unpaid back ground rent but with no additional interest or late charges.

Legitimate collection expenses such as legal fees may be added to the back ground rent owed.

Dear Mr. Gisriel:

I own ground with rent of $90 a year. If I want to sell it, can I raise the price above par value?

Walter Eichman Baltimore

Dear Mr. Eichman:

Your $90-per-year ground rent probably has a par value of $1,500. If you sell it to a third party, you can charge anything you want -- though, at the moment, few would pay more than par. However, if the homeowner wants to buy the ground, you must sell it to him at par or less.

If you, as a landowner, create a new ground rent, then you can set any par value or interest rate you choose depending on what the market will bear. Consult a real estate attorney for more information.

Pub Date: 8/25/96

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