Ground Rent Redemption - Time limit?

Question

Last February, I refinanced my rentals in order to buy-out my ex. One of the properties has ground rent on it which I've never paid since the owner is missing/not active. My lender required me to start the process to redeem the ground rent during this refi process. However, almost 10 months later, there has no been no progress in getting the redemption completed.

At closing, I paid $2,075 to SDAT and $100 to Director of Finance in regards to ground rent (redemption). This title company has been horrible when it comes to communication, but their last update to me was basically that they still haven't found (or had a reply from) the ground rent owner. I'm frustrated with the title company mostly because they ignore my emails and requests for corrections. For example, they had the wrong mailing address attached to my rentals' online records despite the correct info being on the paperwork. For months, no correction. I ended up correcting it all myself via a simple form I found online.

Today, I've emailed SDAT asking them the following:

• 1. Is there a time limit that the ground rent owners have to reply?
• 2. What do we do if we never can find and/or hear from the ground rent owners?
• 3. Can I cancel the redemption process?

I got an auto-reply saying to expect a response within 10 business days. In the meantime, does anyone have insight? I don't even understand why my lender wanted me to start this process when it's clearly not that big of an issue still being incomplete 10 months later. If this is going nowhere, I'd like my escrow money back.

Tom Gimer · Answer

@Nicole A. My bet is your lender required their interest be insured as fee simple in order to close the refinance. This is quite common, unfortunately. Regarding attempting to cancel the redemption, I strongly suggest you let the SDAT process run its course or you'll cause issues regarding the insured deed of trust and thus the refinance itself. FYI this always takes more than 6 months (more like 1 year) with the required waiting period + processing time. IMO, there is actually nothing to cancel if funds were in fact remitted to SDAT.

Sounds like the title company rep doesn't understand that you're no longer attempting to deal with and redeem directly from ground rent owner. The owner's identity and whereabouts are irrelevant if you elected to use the SDAT process. This is how ground rents are redeemed when the GR owner is unknown and/or hasn't made any recent collection attempts.

Tom Gimer · Answer

There would still be some funds in escrow at the title company -- funds needed to record the certificate of redemption (once issued) in the Land Records. But the statutory redemption amount plus 3 years of ground rent plus the SDAT processing fee would have been paid when the application was submitted to SDAT. Good luck, keep us posted.

Sara Frank · Answer

Contact your title company they will tell you your options and walk you through redemption process if youre eligible

Tim Jacob · Answer

These can be a real pain.  Sometimes its difficult like others have said in regards to the bird dogging and the fact many holders of ground rent are in deed deceased.  One thing I would make sure of is in case a new person/ company assumes the new ownership of it through right of survivorship or something else be sure to have the address you get your company billing stuff at on the SDAT form or someone you really trust.  If they start asking for the ground rent and it remains unpaid they can literally start foreclosure on your property.  They can do this over the diminutive annual or semi annual amount of $100 or less.  If the lawyers get involved the fees will be spiked up to close to the full redemption amount. Same thing can happen with not paying environmental fines in Baltimore City which can be not cutting your grass and start at $50.  Those fines can be even worse.

Nicole A. · Answer

Okay, thanks for the info. I was under the impression that the roughly $2,000 was in escrow because that is what the title company said (vs it already being spent with SDAT). And I'm fairly certain it's not on me to figure this out given the title company said they're doing it. Perhaps it's different for Caroline in Cali?

Being that I'm getting close to the one year point, I just expected more answers and communication from my title company attorney handling this, but he rarely communicates with me. I'm playing email/phone tag with the Ground Rent office in Baltimore now. I emailed them and they responded already saying to give them a call to discuss. The number provided seems to go to a specific person's line.

I'll post here again once I learn more and speak with them. Nothing is more frustrating than unfinished business that feels like is just falling through the cracks due to refusal to communicate.

Russell Brazil · Answer

You can redeem ground rent at any time. Title company can take care of it.

Caroline Gerardo · Answer

1. no time limit there could be heirs and probate or sold...

2. Due diligence is on you to find them or family heirs

3. cancel yes but they already did their work and Maryland is not giving you the money back

Since you say you never paid the person or entity I assume they died. It is your duty to clear the debt not the title company's job. You provide a good address and email, they request payoff. The title company doesn't "bird dog it down".

Did you look up obituaries? Did you hire someone to skip trace them? Did you go to their last address and ask the neighbors? Or pay a private detective to find them to clear the lease. With ground rent you only own the structure which is like a mobile home/ vehicle, not real estate. If you incented or offered payment to an expert to do this on your behalf like an attorney, I'm guessing you would be farther along.

Is the title company offering them money on your behalf or just asking them to go get papers notarized as a favor to you? Think about it backwards. If heirs or elderly person gets such a request, without payment offered, they ignore.

Ground Rent Redemption - Time limit?

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