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Maryland Real Estate Q&A Discussion Forum
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Updated about 6 years ago on . Most recent reply

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81
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Ari Bachrach
  • Rental Property Investor
  • Silver Spring, MD
58
Votes |
81
Posts

How to redeem ground rent

Ari Bachrach
  • Rental Property Investor
  • Silver Spring, MD
Posted

I've been looking into the ground rent system recently. (If you've never heard of it, google it. It's a fascinating and completely messed up system that's leftover from Maryland's colonial days and is in serious need of reform). I'm considering a property that's subject to ground rent, but I would only do it if I knew I could redeem the ground rent. I can't figure out exactly how to price that out though. The Maryland SDAT has all sorts of data on what forms to fill out and such, but I can't figure out how to calculate the cost of redeeming the ground rent. Is it up to the land owner to charge whatever they want, or is there some formula set by the state? Does the landowner have to sell to me? What if they don't want the ground rent redeemed?

Most Popular Reply

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643
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407
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Rich Baer
  • Real Estate Investment Attorney
  • Kingsville, MD
407
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643
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Rich Baer
  • Real Estate Investment Attorney
  • Kingsville, MD
Replied

@Ari Bachrach

$120 ground rent is redeemed for $2000.

$60 ground rent for $1000

Take the ground rent amount and divide by .06.

If the ground rent was created in the late1800's or before, the ground rent holder can charge a premium.

They have to sell the ground rent to you.

Really not a big deal.

Nobody cares when buying a property if it subject to a ground rent.

Relax. 

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