Does a title company still have to collect or escrow for ground rents because I was told that Maryland extinguished ground rents?
The Court of Appeals of Maryland recently reviewed the on-line Registry of Ground Leases system and ruled the failure to register a ground rent with the Maryland Department of Assessments & Taxation (SDAT) prior to September 30, 2010 will not result in the extinguishment of an owner’s ground rent interest. Therefore, if a leasehold property is being transferred, settlement companies will continue to locate the holder of ground rent even if the ground rent holder failed to register with SDAT. In the cases where the title company is unable to identify and locate the holder of a ground rent, closing agent will collect escrow funds from the Seller in an amount equivalent to three years ground rent plus $500.
Please note, the Maryland on-line Registry of Ground Leases still serves as a great resource to indentify and locate an owner of a ground rent. One can inquire by conducting a Real Property Data Search on SDAT and clicking on the “Ground Rent Registration” tab. A ground rent tenant still has the right under Maryland statute to redeem his or her ground rent in order to obtain fee simple title.
Please do not hesitate to call one of the attorneys at Lakeside Title Company if you have specific questions as it pertains to your settlement.