What to do about an extinguished ground rent
Sept. 29 was a key day for owners and payers of ground rent, that unusual Baltimore system that separates ownership of homes from the land below them. If the ground-rent investors registered by that date, they get to keep collecting their twice-yearly fees. If they didn't, then the homeowners no longer have to pay -- because the ground rent officially ceased to exist.
But it's taken time for the state to process the thousands of last-minute registrations. That's left some homeowners in a state of suspense, wondering whether they still owe ground rent. If you check a residential property on the state's lookup site with a registered and processed ground rent, you'll see a link to "ground rent registration" near the top right corner. No link, on the other hand, could either mean there's no ground rent or it's still being processed.
There's not a lot in that last group, as it happens. The state Department of Assessments and Taxation said last week that it's going back and forth with ground-rent owners on about 45 applications, trying to correct what it believes are inaccuracies in the information provided. Once that's done, it'll post a message to that effect so homeowners know.
But Robert Young, acting deputy director of the agency, said homeowners don't have to wait any longer to get the ball rolling on the next step -- requesting a "letter of extinguishment" to make it official.
If there's no "ground rent registration" link on the lookup page for your property, "then you can write us a letter saying, 'I want a certificate of extinguishment,'" Young said.
After staffers check to make sure your property isn't among the 45 that are still up in the air, they will send a certificate your way. It will specify that the ground rent on your property was extinguished Sept. 29.
Don't just stick it in a drawer, though. Take that document to your local clerk of the Circuit Court -- if you live in Baltimore, in other words, to the Baltimore Circuit Court. "Say, 'I want to record this in the land records,'" Young said. "Then it will be part of the deed."
Later, if you're selling your home, the company doing a title search will see that you own it "in fee simple," meaning ground and building alike.
Young says to mail the requests to the Maryland Department of Assessments and Taxation, Ground Rent Section, 301 W. Preston St., Room 808, Baltimore MD 21201. (I see "Room 801" specified on the state's site, so I'm trying to find out whether one is preferred over the other. Including the words "Ground Rent" is probably the key thing. UPDATE: Either is fine, Young confirmed.)
All told, nearly 85,000 ground rents were registered, which is what the state was estimating a few months back. Thousands, possibly tens of thousands, ceased to exist after they weren't registered. (A state estimate a few years back put the total at about 115,000.)
One ground-rent owner sued, calling unconstitutional the law that makes property disappear if you don't register it. Others are challenging changes to how ground-rent owners can collect delinquent amounts owed, saying it made their property worthless. That second suit is headed for trial.
One reader, seeing the lawsuit story, asked a question about ground rent that might have occurred to some other folks, too: Why do homeowners have to pay property tax on land that someone else owns?
Because the law says so, according to Young.
"You're the one with the use and enjoyment of that land," he said. "So the idea is, you need to pay the property taxes."