What to do about unpaid ground rents

Dear Mr. Azrael:

I am the owner of a number of ground rents - about $5,000 worth I have been unable to collect.


No attorney seems to want to bother with the collections. I have been advised that after a three-year period, nothing can be done even though I have sent bills to the homes where the money is owed.

Does this mean these ground rents are now worthless and the people living on those properties are free of the debt?


Dear Reader:

Waiting too long to file suit to collect a past due ground rent - or any other debt - may be damaging to your financial health.

The general statute of limitations for bringing an action for money owed is three years. This limitation period applies to legal actions to collect ground rent.

So, a lawsuit to collect ground rent, which has been past due for more than three years, will be subject to the defense of "limitations."

Ground rent that has accrued during the three years preceding filing suit can be collected. And if the defendant does not raise the defense of the statute of limitations, a court could award judgment for ground rent due prior to the three-year period.

The fact that ground rent is past due does not make the ground rents worthless. Their value is based on the future payment of the annual rent.

If the building on the property is occupied and in decent condition, the ground rent is well secured. If the ground rent is not paid, the owner can institute an ejectment proceeding and recover ownership of the entire property, including the buildings and other improvements.