HELP I have 6 days until I get sued!!
Hello BP,
After beginning my buy and hold investing strategy a little over a year ago, I am just starting to realize some of the problems and pitfalls that I was too careless or inexperienced to even think of. I submit to you all just one of the roadblocks I have encountered throughout my short investing career in the hopes that I can get some advice on how this should be handled.
Today I received a collection letter from an attorney representing a ground rent owner in baltimore city. I had been aware of ground rent in baltimore city but naively assumed that upon closing on the property Oct 2014, the title company would relay the information to the lender and my mortgage payment would include ground rent to be escrowed( just like taxes and insurance every month). What a big mistake I made.
The collection letter includes an itemized list of the claims to be paid. These claims are as follows.
"1) ground rent installments due through June 2015: $96"
"2). Fees and expenses per former ejectment
provisions (Real property article, Annotated Code of Maryland-
including but not limited to title charges, judgment
reports, certified mail, and attorneys fees. $500"
"Total amount owed: $596"
The letter goes on to say that if I fail to pay these debts "within 10 days from the date of this letter [June 15 2015].....my client has instructed me to institute a ground rent ejectment suit". My take away from this letter is that I need to pay these guys right now....... or ELSE!
I have no problems paying the ground rent of $96, but my gut feeling is that $500 dollars in fees is a little over the top. Is this real life? Anyways, I would greatly appreciate any advice or similar experiences others have had with ground rents. Should I just pay the debt and chalk this whole thing up to a lesson learned? I've emailed my title attorney the letter and asked if my title insurance might cover this; no response yet [ seems odd that the letter would be sent so that it arrives on a Friday after business hours] and I'm not holding my breathe that I will be covered. I don't know if there is any recourse in my situation, but I will make darn sure that I never miss a ground rent payment on this property or any of my others.
Thank you for reading and thanks for any advice. Sorry if this ended up just being a vent session but I am still pretty overwhelmed at how fast this situation seemed to escalate.