- October 08, 2010
- All Maryland Issuing Offices
- Maryland Ground Rents
STEWART TITLE GUARANTY CO. WILL REQUIRE THAT ALL POLICY ISSUING AGENTS CONTINUE TO COLLECT UNPAID GROUND RENT AT SETTLEMENT EVEN IF IT IS NOT REGISTERED
Please accept this bulletin as an update regarding the underwriting of title insurance policies where the property is subject to a ground rent.
In 2007 the Maryland General Assembly passed several new laws that affect the enforceability, extinguishment and redeemability of certain ground rents in Maryland. The majority of the new laws took effect on July 1, 2007. However, as part of the package of laws affecting ground rents, the State Department of Assessments and Taxation (SDAT) was required to establish an online registry of properties subject to a ground rent. Under the Maryland Annotated Code, Real Property Article (RP) §8-707, ground rent holders with redeemable leases are required to register their properties by September 30, 2010. If a ground rent holder of a redeemable lease fails to register by this date, the ground rent holder's reversionary interest is extinguished and the ground rent is no longer payable. The law calls for a two (2) year disability period where the ground rent can be reinstated under certain circumstances
Despite this new legislation, there is a pending lawsuit filed in Baltimore City Circuit Court challenging the constitutionality of the new law (see Charles Muskin vs State Department of Assessments And Taxation Case Number 24C10004437).
Therefore, until further notice, Stewart will continue to require that you insure all properties subject to a ground rent (whether redeemable or irredeemable) as leasehold unless the ground rent has been redeemed and you have procured a valid redemption deed from the ground rent (fee) owner in recordable form. Additionally, you are required to continue to collect three (3) years annual rent, plus $500.00 and hold in escrow if you are unable to locate the actual ground rent owner. In certain circumstances, you may use the SDAT online registry to locate the ground rent holder if your sellers/borrowers are unable to provide you with the contact information for the ground rent owner: http://sdatcert3.resiusa.org/rp_rewrite. Interested parties can type in addresses and see if there's a link to "ground rent registration."
Finally, until further notice, we will not accept a Certificate of Extinguishment filed in the land records as proof that the ground has been redeemed.
If you have any questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.