Ground Rent Law and Legal Definition

Ground rent is a regular payment required under a lease from the owner of leasehold property, payable to the freeholder. A ground rent is created when a freehold piece of land or a building is sold on a long lease. It is a perpetual consideration paid for the use and occupation of real property to the individual who has transferred such property, and subsequently to his or her descendants or someone to whom the interest is conveyed. The concept of a ground rent arrangement is English in origin. Its original purpose was an attempt by feudal tenants to put themselves in the role of lords over lower tenants. In the U.S., ground rent in this sense is found chiefly in Pennsylvania and Maryland. Under Maryland law, if the renter does not pay, the ground owner can go to court and have a lien placed against the house. An emergency bill was presented by Democratic Maryland Governor Martin O'Malley to completely ban new ground rents in Maryland in 2007.

In Pennsylvania, this term is used to signify a perpetual rent issuing out of some real estate. This rent is redeemable where there is a covenant in the deed to the effect that before the expiration of a period therein named, it may be redeemed by the payment of a certain sum of money; or it is irredeemable, when there is no such agreement; and, in the latter case, it cannot be redeemed without the consent of both parties.