Ground Rent, also called a leasehold, has its roots in the United Kingdom and dates back over three hundred (300) years, but operates somewhat differently in Baltimore. While the homeowner owns the house, they are essentially paying a fee to the ground rent owner for the use of the land. This fee may range from approximately $15-$240, as stated in the ground lease, and is typically paid twice a year. Castle Title will provide the amount due and the contact information for the ground rent owner, if known, to you in your title documents.

There are two ways an amount can be determined. First, if the original lease states a redemption amount, quite simply, that is the amount required. If not, the Annotated Code of Maryland has set a capitalization rate. The capitalization rates are based on the date of the original ground rent lease, as shown below:

July 1, 1982 – Present – 12%
April 6, 1888 – June 30, 1982 – 6%
April 8, 1884 – April 5, 1888 – 4%
Prior to April 9, 1884 – Negotiable and possibly non-redeemable

To compute the redemption price, take the annual ground rent and divide by the capitalization rate. For example: If annual ground rent is $120.00 and created by a lease dated June 26th, 1949. Using the above capitalization rate, $120.00/.06 = $2,000.00.

No. The annual rent is fixed by the lease and can never change. The redemption price is fixed either by a stated amount in the lease or by Maryland law. (See above). You can, however, attempt to negotiate a redemption amount below the statutorily defined redemption amount with the ground rent holder.

The State Department of Assessments and Taxation (SDAT) – will allow you to search for your property and then choose the “Ground Rent Registration” link in the upper right corner. If you are unable to find the results or you would like more information, such as copies of the lease and registration, Castle Title can obtain a ground rent search from our abstracter for a nominal fee.