Last month, the Baltimore SUN did a series of articles detailing some of the excesses that have taken root in Maryland’s archaic, feudal ground rent tradition in the years of the real estate boom. And there are excesses. Its stupid that someone can take away your house for an unpaid ground rent of $24 per year, as happened to one of the unhappy homeowners in the newspaper’s series. Several specific real estate agents took a lot of heat in the articles because acting as renovators and developers, they actually created new ground rents in the last few years. And the industry as a whole was portrayed in vaguely unflattering terms as looking out for the interests of the evil, greedy ground rent holders.
The SUN *loves* to create black and white dramas, filled with Snydely Whiplash-style villians and Polly Purebread-style victims. And as usual, the truth is more nuanced.
The real estate industry is normally slow to jump onto reform bandwagons where the rights of property owners is at stake. And whether or not you like the ground rent system, these people have legally bought the rights to collect this money and its been a part of the legal legacy of Maryland for close to 300 years. This is a good thing, since property rights are one of the mainstays of the American Constitution, right up there within the civic holy trinity of Life, Liberty and Property. (Only Jefferson added that ‘Pursuit of Happiness’ business… the rest of the Founders were more pragmatic. Property can be measured. Happiness can’t.)
Ground rent holders also came in for the waxed moustache treatment, and certainly there are a bunch of sleazy ones. But there are also normal, good people who looked at ground rents as a secure method of funding their retirements, and several large charities in the Baltimore area who, through the largesse of their supporters over the years, have had the title to ground rents donated to them and collect quite a bit of money every year from them. Only a handful of the professional sleaze buckets decided this was a legal way to rob people of their homes, but they are the ones ruining it for everyone.
Personally, I wish they would abolish the entire system. Many of the earliest ground rents cannot be traced to a specific holder anymore, and so all they do is create another legal and financial situation that buyers and sellers have to confront at settlement. Mortgage lenders who are based outside of Maryland just don’t ‘get’ ground rent, and can screw up the transfer of a property by deciding at the last minute that they don’t like what they are getting into.
The Maryland Legislature, now back in session and just brimming with infinite wisdom, has decided that ground rent reform is a top priority. The SUN is smelling Pulitzer. And the rest of us, who deal with ground rents regularly, just hope they don’t screw it up any further than it already is. Anyone care to make a wager?
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