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FEBRUARY, 2014 VOLUME 4

Monthly News Letter

What is Ground Rent?

Ground rent is an annual charge, usually paid semi-annually, for that is classified as “leasehold”, or in simple terms, is subject to “-of-years” for the land. Leasehold is distinguished from the common form of ownership (called “fee simple”) as follows: when someone owns leasehold property, they own the home and all of the improvements on the land, but the land remains titled in another person/entity; that other person/entity typically charges ground rent for the use and enjoyment of the land. Ground rent are very common in Baltimore City. Sellers of are required to disclose the existence of a ground rent, who is the current beneficiary of the ground rent, and the amount due. At times, purchasing a leasehold property presents a problem: the ground rent owner cannot be located or has failed to register their name and address with the State. If you want to purchase a property subject to ground rent, but are unable to find the owner, there is a solution. The statutory limit that a ground rent holder can demand past due rent is three (3) years. For example, if a buyer has lived in a property for ten (10) years and the ground rent owner surfaces and demands payment of past due rent, they are limited to three (3) years and then may ask for future payments as scheduled in the Lease. Agents… If the ground rent holder cannot be located, an escrow/title agent will usually Celebrate Valentine’s insure the transaction as long as an escrow agreement and the equivalent of three years rent placed in escrow in the event the ground rent holder surfaces. day with a Home First Another option with leasehold property is to “redeem” the ground rent. Title Group in The legislature has established two procedures that can be followed to redeem a property, and to “merge” the fee simple and leasehold chains of title: the month of February, OPTION 1: If the owner of a single family residential property who is the and receive this tenant under a ground lease on the property has had no communication from the ground rent holder for three years or more, the ground lease tenant may use the William Sonoma cook procedure prescribed by law to redeem the ground lease by making application book as your buyers with the State Department of Assessments and Taxation (“SDAT”). This process gift. takes at least 120 days to complete and begins once the Notice of Intent to Redeem is posted.

*This promotion is good while 2. Post the “Notice of Application For A Ground Rent supplies last. This offer cannot be Redemption” Where The Address of the Is used in conjunction with any other HOME FIRST TITLE GROUP promotions. Gifts will be given at Unknown This Notice must be posted in a window or closing. other conspicuous place800 on-490 the property-0570 for thirty (30) days;

1655 Crofton Blvd., Suite 201 2a. Complete an Application For Residential Crofton,Ground MD Rent 21114 Redemption; 800-490-0570 www.HomeFirstTitleGroup.com Locations in MD – DC & VA 3. Visit SDAT at 301 W. Preston St., Room 801,

Baltimore, MD 21201 and bring the Notice of Application For A Ground Rent Redemption Where The Address of FEBRUARY 2014 VOLUME 4 PAGE 2

Ground Rent Continued *FREE HOME

WARRANTY Here are the steps: 1. Determine if a ground rent redemption filing has been made for a specific property; On your first deal with Home First Title Group. 2. Post the “Notice of Application For A Ground Rent Redemption” Where The Mention this ad Address of the Landlord Is Unknown This Notice must be posted in a window or other conspicuous place on the property for thirty (30) days; Settle with Home First Title 2a. Complete an Application For Residential Ground Rent Redemption; Group and receive a FREE 3. Visit SDAT at 301 W. Preston St., Room 801, Baltimore, MD 21201 and bring the Home Warranty or $300 Notice of Application For A Ground Rent Redemption Where The Address of the off your settlement costs, Landlord Is Unknown, Application For Residential Ground Rent Redemption, a copy of the homeowner’s to the property, and a check for the processing fee in the amount of seventy dollars ($70); www.HomeFirstTitleGroup.

4. After ninety (90) days, return to SDAT with a certified check or money order for com the total redemption amount, and the Affidavit of Certificate of Redemption to receive the Certificate of Redemption. What real estate company did

Date of Original Lease "Marge Simpson" July 1, 1982 - Present Day 12% work for? April 6, 1888 - June 30, 1982 6% April 8, 1884 to April 5, 1888 6% Be the first to answer this Trivia April 9, 1884 Variable and possibly non-redeemable question, and receive a $25 gift card hand delivered by Simply go to our website and click For example, suppose the annual ground rent is $180.00 and created by a lease dated on the “Ask an Attorney” button April 1st, 1889. Using the above chart, $180.00/.06 = $3,000.00 The State of and submit your answer. Maryland passed the Residential Ground Rent Redemption law, effective January 1, 2004, enabling the owner of a single family residential property who is the tenant under a ground lease on that property to redeem the lease where there has been no communication from the landlord for three years . Happy Birthday

As always, we suggest that you speak to an attorney to assist you in navigating the laws concerning ground rent redemption. Feel free to hit the “Ask an Attorney” button Dawn Waters on our website; www.homefirsttitlegroup.com if you have any questions. February 12th We are here to help!

Home First Title Group As always, we suggest that you speak to an800 attorney-490-0570 to assist you in navigating the laws concerning www.HomeFirstTitleGroup.com ground rent redemption. Feel free to hit the “Ask an attorney” button on our website; http://home1sttitle.net/ if you have any questions. We are here to help! A House is made of Bricks & Beams

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