Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-10
AS TO GROUND RENTS
AN oLD-TIME CUSTOM THAT Is
DISAPPEARING.

An interesting feature Of the real estate
market in several of the large cities of the
country Is the desire to get rid of ground
rents. In Pittsburg, says the Press of that
city, this peculiar phase of land ownership
never have been many of these rents in
force in this section. There are. however,
still few on some of the downtown ave-
nues and within the past fifteen years a
good many have been extinguished.
Real estate dealers everywhere fight shy
of them as much as possible, and it is al
most impossible to find an eastern trust
company that will accept a mortgage on, a
property on which there is a ground rent.
since the existence of this rent puts the
trust company in second place in the mat
ter Of realizing on the property.
In Philadelphia and Baltimore ground
rents are still numerous, and it was this
fact that seriously handicapped the prog
reSs of rebuilding Baltimore after the fire.
In fact. they did very materially aid in
preventing the widening Of many of the
streets in the burned district. In Philadel-
phia last week there was an unusually
large sale of ground rents at auction, dis
tinct feature being the high prices secured
for them, although they were already re-
deemable. One of them furnishing an an
nual rental Of $24 on principal OF 800
was sold for 1850, at which price it yields
3 69-1O0 per cent. Others sold at about par.
That any sold at a premium is unusual.
The principal can be paid on at any time,
in which case the premium paid would be
lost.
Origin Of Ground Rents.
But It often happens that when property
carrying a ground rent Is wanted very
badly a big premium is asked; and 1t is re-
called that when Diamond street, In this
city, was being improved the syndicate
having the matter in hand paid stiff pre-
miums for certain ground rents, which they
wanted to extinguish.
These sales call attention once more to
one of the ancient ways the venerated
fathers OF Pennsylvania had Of investing
their funds-the sale of real estate, reserv-
ing ground rent or annual payment to the
holder of the same, Ibis heirs or assigns
forever" They were made payable in varf-
GUS ways-Spanish pistoles, Indian arrows,
annually, or the greatest number in Span
ish milled dollars-then in high repute as a
Many deeds also stipulated these Spanish
dollars shall weigh 1T dwt. gr Of fine
silver" The yearly charge was computed
at the rate of per cent.
Law Against Them.
In some of the old sections of Philadel-
phia it is the exception when a house has
not a ground rent upon It. They have
proved an obstacle to sales, and in making
mortgages upon property. as is well known.
and as early as 1850 there was legislation
on the subject In the act of 1850. April q.
P. L. $40. is found the provision:
From and after the passage of this act
whenever a deed or other instrument Of
writing conveying realty shall be made
wherein shall be contained reservation Of
ground rent to become perpetual upon fail
ure of the purchaser to comply with the
IN, ont of,,a1
nant or condition shall be so construed as
to make the said ground rent a perpetual
incumbrance, but it shall be lawful for the
purchaser thereof at any time after said
ground rent shall have fallen due to pay
the full amount of same. and such payment
shall be a complete discharge from the in
cuMbrance aforesaid"
Ground rents were also drawn In which a
term OF years was given, generally ten
during which the ground rent could be paid
off and extinguished, but If option was not
exercised it became irredeemable.
Old Gold Dollars.
For many years current funds were ac-
cepted for payment without regard to the
specially named coin. During the civil war
however holders looked into their securi-
ties, and as silver was at a high premium.
demanded payment In whatever was named
In the ground rent deed. The Spanish
milled dollars, of any weight, full or light
at that time were not to be obtained at any
price. Suits were brought, and the courts
decided that, where the special money
named in the deeds could not be obtained,
they should be paid In gold. After this
was done gold was quoted as high as 200
and as late as 1877 it was still at a frac-
t1onal premium.
After the resumption Of specie payments
current funds were again accepted until
the depreciation Of silver occurred, when
Spanish milled dollars suddenly appeared
In the hands OF brokers and were offered
as low as 60 per cent Of their face value
Then the spirit of retaliation occurred to
many owners of properties burdened by ir-
redeemable ground rents. They bought the
deprecated dollars and offered them at the
interest periods. They were refused, but
the tender was sustained by courts and
eminent lawyers When such payment was
made those who received them were COM
PEELED to sell to brokers at from 45 per cent
to IS per cent discount.
More Legislation.
In 1885 further legislation was passed
making II impossible to create an irredeem-
able ground rent BY act Of 1885, June a.
P. L. 1871, It Is provided:
From and after the passage of this act
no irredeemable or non-extinguishabl
ground rent shall be charged upon or re-
served out Of any land within this COM
monwealth, nor shall any omission to pro-
vide for the redemption OF any ground rent
or rent charge, ETC., in any deed hereafter
to be made charging or reserving ground
rent be in any wise construed or interpreted
to make such ground rent irredeemable or
prevent the extinguishment thereof
Such legal action, however. would not be
retroactive, and old ground rents continued
to advance in value until in some instances
they changed hands (either as an invest
ment or to extinguish them) at 100 per
cent premium, making the principal return
to the holder double the amount reserved
when the ground rent was created and In
terest only per cent.
Interfered With Sales.
Small ground rents Of this class often in