It is a 99 year renewable forever lease on the ground. It is like a permanent interest only mortgage on the ground that never pays down. You can redeem it for 16 times the annual rent plus title company charges for preparing and filing the new deed. It is based on 6% interest. When interest rates are low, like today , some people redeem when they buy the house. If rates are high they go with the lower ground rent. Many gound rents have been lost and people don't pay them anymore. Worst case is that the ground rent holder can collect three year back ground rent. But if your ground rent is active you must pay it in two semi annual installments. It is supposed to be registered with the state. If you don't pay the ground rent you can be subject to an ejectment and lose the house. But there are lots of safeguards now after some abuses a few years back. Maryland ground rents have no effect on mortgage financing because FHA, VA and all banks allow them
Advance Realty Timonium
Short Sale Specialist.
Ground rent was very common in San Francisco during and following the gold rush of 1848.
RE/MAX Realty Group
That is a good question. Some homes purchased allow you to also own the land. Some houses come with ground rent, meaning you have a rental fee for the land the house is built on This fee is in addition to your mortgage. At times, you can buyout the ground rent so you can own the land. You may want to ask if it's possible for the property you are considering. Good luck!
Ariana Loucas, RE/MAX