Ground Rent – Fee Simple – Condo

Ground Rent, Fee Simple and Condo are real estate terms that describe the type of ownership for a property.  Here is what they mean:

• Ground Rent - is where you own (or purchase) the building but you don’t own the land.  In essence you “rent” the “ground” from someone else who has title to the land.  Although this form of ownership goes back to Roman times, in the Baltimore area it was started in 1632 when Lord Baltimore charged rent to colonists who wanted to build on his land.  It is still used sometimes today to help keep the costs of home ownership down.  Most commonly seen in the city, ground rent can be found in Howard County and other local jurisdictions as well.  When a home is listed for sale, the amount of ground rent must be disclosed along with the cost to redeem the rent.  The amount of ground rent varies greatly and can be as low as $50 per year.  If the ground rent was created after April 8, 1884 it may be bought from the owner at a rate determined by the State.  After the ground rent has been redeemed, the property ownership becomes “fee simple.”
• Fee Simple - is where you own the land under your home (technically the footprint all the way down to the center of the earth and all the way out into the universe to infinity).  So, you may be thinking, “hey, if I own the space above my home then I can declare it a ‘no-fly’ zone to jets and other aircraft.”  Actually, you do own that space but it has a permanent “easement” that allows aircraft to use of the air over your home (and satellites to use it to orbit the earth, for that matter).  On the other hand, if your neighbor owns the property to either side of yours and wants to build a bridge over your house so they don’t have to walk across your yard, they can’t do that. . .unless you give them an easement to use your space, of course.
• Condo – is ownership of the common areas in a Planned Unit Development (PUD).  Sometimes condos are single level units in a multi-floor, multi-unit building.  Other times they multi-level homes that look just like townhomes.  With condo ownership, you and every other home owner in the PUD owns the common areas – walkways, grass, gardens, building exteriors, roofs, etc.  Your individual deed is only for your unit and the airspace that it occupies (even if you have the ground level unit, you don’t own the land underneath it exclusively – everyone owns it in common).  Typically with condos, there is an extra “condo fee” paid by every unit owner to cover maintenance and upkeep of the common areas as well as a master insurance policy for the entire PUD.

For general information about ground rent visit: LiveBaltimore.

Prior to 2007, ground rent was something of a mystery to many homeowners who were subject to the rent but didn’t know who to pay it to or how much to pay.  Often the homeowner wasn’t even aware that they had ground rent.   A spate of lawsuits were filed by ground rent owners who were evicting families from their homes for non payment of the rent.  In 2006, reporters from the Baltimore Sun uncovered and brought to light what had been a secretive business where nearly 4,000 lawsuits had been filed against homeowners since 2000.  To read more about their investigative reporting on the topic visit: Baltimore Sun.

Laws were put in place that required ground rent owners to file in a registry or risk losing their rights to collect ground rent.  Now able to identify the owner of their ground, homeowners can redeem their ground rent if they chose to do so.  For information on how to redeem your ground rent visit: http://www.dat.state.md.us/sdatweb/ground_rent.html