In most cases buying a home means purchasing the land and the improvements – basically the house. But that’s not always the case. The owner of a mobile home, for instance, typically owns the structure and sets it down on a site in a mobile home park rented from a landlord. That can also be the case with a conventional house in Maryland, particularly in Baltimore where many homes are subject to “ground rent.”

Ground rent came about as a way to make housing more affordable. The buyer purchased the structure but leased the land from a landlord called the “ground rent owner.” The rent is typically from $50 to $150 per year and is usually paid with two semi-annual installments.

A problem can arise for the homeowner that forgets to pay the ground rent. In that case, the ground rent owner can foreclose on the property, taking back control of the land and the house on it. The good news is that the homeowner may have the ability to redeem the ground rent by paying the landlord a lump sum of money. The website for the Maryland Department of Assessments and Taxation has instructions and an application for the redemption process.

The bottom line is that Maryland purchasers should ask questions and investigate. Ask your agent whether a property you like is described on the multiple listing service (MLS) as a fee simple ownership interest, which means the buyer would purchase the land and all improvements, or whether it is only a purchase of the improvements subject to ground rent. If a ground lease is involved, check the Maryland Land Records site to review the ground lease terms, including whether the lease is renewable or redeemable, and for how much. Find out who owns the earth beneath your feet.

Baltimore (credit: Bruce Emmerling)