Redeeming (Paying Off) Your Ground Rent
Most every homeowner with ground rent, is able to eliminate their ground rent by redeeming their ground lease. The cost to redeem the ground lease is set by law and is as follows:
EXAMPLE: So the cost to redeem a ground lease created in 1956, with a ground rent of $120 per year, would be calculated as $120 divided by 0.06 which equals $2,000. The total redemption cost would be $2,000 plus any ground rent currently due, plus the cost of recording the deed ($500-$750).
Beginning The Redemption – Contact The Owner
The first step in redeeming your ground rent is to contact the ground lease owner. If you are unable to reach the ground lease owner (Lookup), or they are uncooperative, you can redeem through the State of Maryland, but dealing directly with the owner is the quickest and best way. Most ground lease owners are happy for the redemption. Redeeming through the State typically takes much longer and should only be used if the redemption with the owner isn’t possible.
Loan To Pay Off Your Ground Lease
To help with redemption, the State of Maryland offers a loan program, and will lend you the money to redeem the ground rent if your annual income doesn’t exceed 80% of the statewide median income, or about $76,000.
Whether you write a check, or get help from the state, once the owner of the ground lease is paid (step 1), and the deed prepared (step 2) and recorded in the land records (step 3), you then have to register the redemption (click here for the form) with the State Department of Assessment and Taxation (step 4, final step).