A little help for ground-rent owners
Earlier I laid out the steps for homeowners to get the ground rent on their land officially extinguished if the ground-rent holder didn't register it by the deadline last fall. Now here's a flip side of sorts -- assistance for mom-and-pop ground-rent owners who aren't getting paid what they're due.
The help comes courtesy of Louis Wilen, a part-owner of a small number of ground rents who figured the many small-time and elderly owners of such leases aren't having an easy time deciphering the new-ish collection rules. He's sharing examples of a ground-rent invoice and an overdue notice (a heads up that a lien will be forthcoming if the rent money is not).
"The big guys who own hundreds of ground rents already know how to collect -- and the tactics that they used (as reported by the Baltimore Sun) spurred the legislature into changing the ground rent laws in 2007," he wrote me in an email. "Unfortunately, the new laws made collection much more difficult for the small guys. Hopefully, making these sample documents available will help out the little guys."
He added: "Also, anyone who uses the lien warning notice should carefully read the law (which I included with the lien warning notice) and be sure to follow the required notification procedures, which include sending the notice by certified mail, then posting it if the certified mail is not deliverable, notifying lenders (if any), etc., etc. Determining the name and address of lenders requires a title search. The process isn't terribly difficult but it isn't simple, either."
On a semi-related note: The state's highest court is mulling over a challenge to the '07 registration law, which specified that all ground rents not registered with the state before Sept. 30 of last year would cease to exist. Sun columnist Jay Hancock wrote recently that people with a small number of ground rents -- one, in some cases -- got caught by this rule because they didn't know about it.
"Maryland could have given ground rent owners plenty of incentive to register without confiscating their assets," he wrote. "Don't let landlords collect rent until they sign up, for example. Don't let them sue tenants. Don't allow ownership transfers."
Would those penalties for non-registration be better than what's in place now?
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Comments
Don't forget the second ground rent suit pending concerning the unconstitutionality of the taking of peoples' property Maryland did by enacting this clearly unconstitutional statute. Ground rents are no different than ground leases used in almost all worldwide inner city commercial development, e.g., World Trade Center, Harborplace, etc.
Posted by: jeb | June 23, 2011 11:24 AM
They didn't know they had to register to preserve their feudal rights? They didn't bother to find out, did they? The ground rent thing was in all the papers; I followed it and I've never paid nor collected ground rents in my life. Show a little interest if you want to hold on to your little privilege, OK?
Posted by: Anonymous | June 23, 2011 3:41 PM
Why do we still have ground rents anyway? The ground rents that are collected don't help the homeowner. It appears that the ground rent was made to collect revenue only. Will ground rents ever be stopped being used?
Posted by: Arnie G. | June 23, 2011 5:39 PM
Arnie, the original idea of ground rent was in part about more affordable housing. Buy the home for less than you'd pay for it in "fee simple" (that is, no ground rent), then pay a fairly small amount every year for that benefit. But ground rent has confused the heck out of a lot of people over the years and was abused by some industry players.
Posted by: Jamie Smith Hopkins | June 23, 2011 5:43 PM
Arnie G: Why do we still have taxes anyway? The taxes that are collected don't help the homeowner. It appears the taxes were made to collect revenue only. Will taxes ever be stopped being used?
Posted by: jeb fries | June 25, 2011 10:34 AM
I have a ground property that I have owned for approximately 24 years. This year I collected just a little of the ground rent because a government employee state that the law changed in 2006. I feel cheated because I was not able to obtain payment for all the years that it was due. I was told that I could only collect for 3 years. I need help to collect all the rent that is due me. I plan to write my governmental representative in the near future.
Posted by: Mary | October 26, 2011 9:15 PM
Mary, three years is correct. Here's a Q&A with a Baltimore attorney who notes the law on back ground rent: http://weblogs.baltimoresun.com/business/realestate/blog/2011/05/john_mitnick_ground_rent_qa.html
As it happens, general debt-collection cases can't be filed in court more than three years after the point of default.
Posted by: Jamie Smith Hopkins | October 26, 2011 9:27 PM