Canton Homes For Sale in Baltimore & Ground Rent
Ground rent is a common thing to see in Baltimore City homes listed for sale. What does this mean? I am often asked this question as a Realtor working with buyers. First lets answer the question “What is ground rent?” When you buy a home your purchase includes the building, or improvements to the land. You also think that you are getting the land with the building. In many cases in Baltimore, especially Ground Rent Canton Homes For Sale in Baltimore, you rent the ground. Ground rent means that you only rent the land and buy the building. This was done many years ago to make it more affordable for people to purchase a home because they did not have to buy the land. With ground rent you have a registered land owner, and the home owner rents for the land. This is usually under a few hundred dollars a year, and commonly divided into bi-annual payments. The other type of listing is Fee Simple and that means that you are buying the land and the building, no ground rent.
In 2007 the state legislature passed a law requiring the owner of ground rent leases to register with a new database maintained by the Maryland Department of Assessment and Taxation so people could find out who owns the ground rent lease. This was to be done by September 2010. This also stated that if the ground rent was not paid the ground rent lease holder could place a lien on the home for the amount of unpaid ground rent. The lease holder could then foreclose on the home, but the home owner would only lose the amount of ground rent owed. Retaining the balance of equity they have in the home.
The Baltimore, MD home buyer has 2 choices when they purchase a ground rent home. They can search the database to make sure the ground rent is registered, find who they owe the rent, and where to mail the payment. The other choice is to redeem the ground rent from the current lease holder, and get an update deed. This changes the home from a Ground Rent property to a Fee Simple property.
There is a formula that you can use to find out how much it will cast to redeem the ground rent if you so desire. This is very simple – Ground Rent ÷ 6% = Redemption Amount. Example: Ground Rent $60.00 ÷ 6% so 60 ÷ .06 = 1,000. In this example the home owner can redeem the ground rent for $1,000.00. The process can take between 90 & 120 days. The Maryland Department of Assessment and Taxation has all the required forms and more information about ground rent and how to redeem, or telephone 410-767-1151 with questions.
So as you can see ground rent is an easy concept to understand. I hope this has help your understand of what it means to look at Canton Homes For Sale in Baltimore with a Ground Rent