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Ground Rents and the U.S. Constitution

Posted by Jim Walsh on Wednesday, September 29, 2010

The Baltimore Sun reminds its readers in today’s edition that ground rents that are not registered with the State of Maryland will soon be extinguished. Ground rent owners must register in person by Wednesday, 9/29/10, or postmark their application before Thursday, 9/30/10.

As the Sun reports: “Ground rent dates to Colonial times in Maryland and was used by rowhouse developers in the 20th century as a way to make purchases more affordable. But a Sun series in 2006 found that a handful of investors seized hundreds of homes over unpaid bills, reselling them and legally keeping the proceeds. Some of the homeowners said they never received the bills. Intent on reform, the General Assembly passed laws that prohibited such ‘ejectments,’ barred new ground rents and required registration of existing ones.”

Technically, the holder of the ground rent actually owns the property, and leased the property (in perpetuity) to the occupants commonly thought of as the owners of the property for what now seems to be a nominal amount. The typical ground rent in the Baltimore area calls for payments of less than $100 per year payable in semi-annual installments. If the semi-annual rent was not paid, the ground rent owner could go through a legal process to eject the “tenants”, which made the ground rent safe because it operated as a kind of “super mortgage”, being even ahead of the “tenants'” mortgage lender. The typical ground rent could be redeemed at a 6% capitalization rate, i.e., the tenant of a $90/year ground rent could get rid of it by paying the ground rent owner $1,500 ($90/6%).

I personally have never been a big fan of ground rents. A number of my clients own one or a handful of ground rents. Although they offer an attractive yield in today’s market, they are a pain to deal with. Unless the homeowner was willing to redeem the ground rent, the only way to get rid of them was to sell them to investors who would buy them at a substantial discount (maybe $750 for our sample ground rent). A handful of investors bought up hundreds or even thousands of ground rents in the Baltimore area, and brought the full force of contract law down on some delinquent homeowners, charging excessive fees for ground rent payments that were somewhat late, and ultimately even regaining outright ownership of some properties when the “tenant” did not cure the defect in the mandated time.

The General Assembly responded to the Sun’s series by passing legislation that (1) prohibited the creation of new ground rents, (2) eliminated completely the ground rent owner’s right to a eject a delinquent tenant, and (3) required that all existing ground rents in Maryland be registered in a central registry by 9/30/10 or be forever extinguished. I don’t dispute that there were abuses that should have been addressed, but as in often the case the politicians in Annapolis over-reacted. I see no problem with the prohibition against new ground rents, but I do have a problem with the General Assembly completely taking away the ground rent owners’ ability to enforce their rights.

As I recall, there is this inconvenient thing called the U.S. constitution that prohibits any state from passing any “Law impairing the Obligation of Contracts” (Article I, section 10), which is exactly what Maryland has done. In addition, the Fifth Amendment (among its other prohibitions) provides that no person shall be deprived of “life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.” It sure looks to me that the Maryland General Assembly has taken away property from ground rent owners without any trial or compensation. For the owner of a single ground rent that might be worth only $750 to begin with, it doesn’t make sense to spend tens of thousands of dollar to fight this fight on principle. And the ground rent owners who own enough ground rents to make such a fight worthwhile are the unsympathetic characters whose abuses were exposed by the Sun. It looks like another bite at our Constitutional rights.


Posted in Jim Walsh, Maryland, The US Constitution | 2 Comments »

There’s Something Going On

Posted by Jim Walsh on Thursday, September 16, 2010

The past 36 hours or so (i.e., since the night of the primary election) have convinced me that there is a seismic shift going on politically the likes of which I’ve never seen before.

First, an anecdotal observation. This morning I drove from home (in Woodbine) to meet a client at Leisure World (a large age-restricted development in Silver Spring). On the way down Georgia Avenue, and then across Norbeck Road heading back to my office in Columbia, I noticed a handful of Ehrlich signs here and there. But I did not see a single O’Malley sign in my travels to and from Montgomery County, which is one of the bluest counties in this most blue of states. Even driving through the liberal hotbed that is Columbia, I see a roughly even split of O’Malley and Ehrlich signs. This is only anecdotal, but I am convinced that there is practically no enthusiasm this year for O’Malley.

Second, this morning I read that the latest poll done in the Ohio governor’s race has John Kasich (R) up 17 points over Ted Strickland (D). For those of you not familiar with the politics of my home state, the stunning thing about this poll is that Strickland is the INCUMBENT who was leading Kasich by 5 points in the polls in late June. Strickland is not mired in any scandal, and he has not made any significant campaign gaffe. The worst thing that Strickland has done so far in this campaign is a YouTube video clip showing him in a Howard Dean type tirade about how Republicans hate America. But that clip was not major news and the tirade occurred only about 10 days ago, when Strickland was already trailing badly in the polls. Across the Great Lakes states, it looks like governorships of Michigan, Pennsylvania, Ohio and Illinois are going to flip from Democratic to Republican.

Third, Christine O’Donnell defeated ex-Governor and current Congressman Mike Castle in the Delaware primary for the Senate seat previously held by VP Joe Biden. Normally an insurgent can beat a party favorite only when there is an very low turnout in the primary, and the insurgent’s villagers with torches and pitchforks are the only ones who show up at the polls. What was especially interesting about O’Donnell’s victory is that the turnout in Delaware was three times the average primary turnout.

All the pundits immediately said that the Delaware voters were crazy and the Republicans had just lost their chance at picking up that Senate seat, and hurt their chances to gain the majority in the Senate, citing polls showing Democratic nominee (New Castle County executive) Chris Coons with a 16 point lead over O’Donnell. Karl Rove promptly bashed O’Donnell for her past financial problems and quirks. Even before O’Donnell concluded her victory speech Tuesday night, the Republican Senatorial Committee said it would not be supporting her in the general election. Castle, in his concession speech, did not congratulate O’Donnell or even mention her by name (reminiscent of Maryland’s own sore loser Wayne Gilchrest in 2008). Why the outrage at O’Donnell, particularly from Republicans? What happened to Ronald Reagan’s 11th Commandment “Thou shalt not speak ill of a fellow Republican.”?

Some Republicans dislike the Tea Party movement for its impact on the Delaware, and Alaska, and Nevada primaries. They like the enthusiasm that the Tea Party has generated for conservative candidates, but resent those same Tea Party-ers for upsetting the apple cart for some party insiders. Those Republicans are trying to have their cake and eat it too. You can’t expect a group to be enthusiastic about the political process unless that group can have an impact.

There were online reports that Karl Rove was working behind the scenes for the Castle campaign, so maybe he was just ticked off that his horse got beat. Even so, Rove is a political professional and his blast was a head scratcher. For those fans of conspiracy theories, I read one comment suggesting that Rove had done O’Donnell a huge favor. Now she was the underdog again, berated and dismissed by fellow Republicans. She was immediately transformed from a kooky fringe candidate to a sympathetic rallying point for conservatives across the country. On the day after the primary election, O’Donnell collected $750,000 in donations. By noon Thursday, she was up to $1,000,000. At the very least, she will have enough money to range a credible campaign, and the Democrats will still have to spend a significant amount of money in Delaware that they could have used elsewhere. Two days after the election, Coons’ lead over O’Donnell was down to 11 points. Now Delaware may be a blue state, but Chris Coons is no Joe Biden. He does not engender enthusiastic support. I think the momentum is shifting back to O’Donnell. I fully expect that any poll done the week of 9/19 will have her down by no more than 8 points. At the very least, O’Donnell is still going to make a race of it.

Let me try to connect some dots.
(1) There is no enthusiasm among Democrats.
(2) Republicans and independents are more likely to vote this year and they are angry. Ohio is the ultimate swing state, going back and forth between Republicans and Democrats. If an incumbent Ohio governor with no scandal or major gaffe is down 17 points, I’m extrapolating that Republicans have maybe a 12-15 point advantage over their base line of support this year.
(3) Christine O’Donnell is attracting money and support at an unprecedented rate.

Now let me go far out on a limb and make some predictions:
(1) Republicans take the House.
(2) Republicans take the Senate.
(3) Christine O’Donnell wins.

Posted in Democrats, Ehrlich, Jim Walsh, O'Malley, Republicans | 3 Comments »

Absentee Ballot Requests – A Cautionary Tale

Posted by Jim Walsh on Wednesday, September 15, 2010

My college daughter, who is now 18 and eager to vote for the first time, registered to vote this summer and requested online an absentee ballot for the primary election. After never hearing back from the Board of Elections, she called and was told that the Board had no record of her request. By this time it was too late for her to request an absentee ballot. For the general election, we will be sure to download the absentee ballot application and I will hand-deliver it to the Board of Elections.

Posted in Howard County, Jim Walsh | 1 Comment »

Howard County Board of Education Primary Results (Unofficial)

Posted by Jim Walsh on Wednesday, September 15, 2010

Vote for four:
1. Sandra French 17461
2. Frank Aquino 17363
3. Larry Walker 10569
4. Brian Meshkin 9748
5. David Proudfoot 9707
6. Cindy Vaillancourt 9412
7. Robert Ballinger 8860
8. Leslie Kornreich 8006
9. David Gertler 6525
10. David Thalmeier 5678
11. Marcelino Bedolla 4724

Posted in Education, Howard County, Howard County News, Jim Walsh | 3 Comments »

Howard County Republican Primary Results (Unofficial)

Posted by Jim Walsh on Wednesday, September 15, 2010

Senate 13 – Kyle Lorton 2853 / Jody Venkatesan 2010

House 13 (vote for 3) – Ed Priola 3518, Jeff Robinson 2778 and Loretta Gaffney 2509 / J’Neanne Theus 2022

Republican Central Committee (vote for 9)
1. Laura Kittleman 9061
2. David Bates 6944
3. Diane Butler 6424
4. Dave Myers 6144
5. David Wissing 5803
6. Loretta Shields 5646
7. Kathleen Newberry 5316
8. Janet Moye Cornick 4981
9. Karen Winterling 4836
(Only men named “David” are allowed on Central Committee.)
10. Betty Evans 4383
11. Joel Rosenberg 4121
12. Ellen Harrison 4004
13. Christopher Oxenham 3509
14. Edward (?) “Chick” Chickanis 3343

Posted in Howard County, Howard County News, Jim Walsh, Republicans | Leave a Comment »

An Open Message to the Beams and MacFarlane Campaigns

Posted by Jim Walsh on Monday, August 30, 2010

(From an e-mail sent to the Beams and MacFarlane campaigns)

As I drove to work in Columbia from western Howard County this morning (Mon., 8/30/10), I was disheartened to see that Mr. MacFarlane’s campaign has joined Dr. Beam’s in littering Homewood and Folly Quarter Roads with numerous illegally placed campaign signs. Last Monday (8/23) morning, I noticed that Dr. Beam’s campaign had placed 5 or 6 campaign signs next to stormwater management ponds and in other open spaces where there could not possibly have been any consenting homeowner. This morning, the litter was more than doubled with placement of Mr. MacFarlane’s signs in similar areas and in an even more obvious improper space, i.e., the interior of the traffic circle at Homewood Road – Folly Quarter Road – Sheppard Lane. With nine weeks left before the general election, I fear that more candidates will be emboldened to join you in trashing this corridor. I suspect that other areas that I do not regularly drive may also be suffering from overzealous misplacement of signs.

I understand that neither of you personally may have placed these signs, but their placements reflect negatively on your campaigns. Please advise your volunteers about placing signs only with property owners’ consents, and where signs are permitted. I ask you both to remove the offending signs and cease placing signs improperly.

Posted in General, Howard County, Jim Walsh | 9 Comments »

Why is the Obama Administration against Americans?

Posted by Jim Walsh on Thursday, August 19, 2010

Recent news stories illustrate how the Obama administration consistently views the world contrary to the wishes a vast majority of Americans.

With regard to the Arizona immigration law, roughly 70% of Americans support the position of the State of Arizona and oppose the Justice Department lawsuit against the state’s act of self-defense. Yet, the Justice Department selectively decides to challenge under the doctrine of pre-emption a state law that actually follows federal law, yet turns a blind eye to possible pre-emption challenges to dozens of politically correct cities that declare themselves “sanctuaries” for immigrants and forbid their own police officers to enforce federal law. In my view, there can be no clearer violation of an elected official’s oath of office to uphold and defend the Constitution than to direct local police NOT to enforce federal law. (I know that lax immigration enforcement was an issue under the Bush Administration as well, but that’s not the point: it’s the Obama Justice Department that is filing suit against Arizona.)

Then there’s the Ground Zero mosque. Again, roughly 70% of the population opposes the placement of the mosque/Islamic community center two blocks from Ground Zero. We all understand that the Islamic community has a constitutional right to worship where they wish. But there’s a difference between doing something because you have a right to do so and doing something that’s right to do. Most Americans believe this is not the right thing to do.

As Ron Smith pointed out on his radio show, it’s no coincidence that the “Cordoba Islamic Center” is going up two blocks from Ground Zero. Cordoba was the site of the primary mosque during the Moorish occupation of Spain, built on the ruins of a Christian cathedral and which in turn was converted to a Christian cathedral after the Moors were expelled from Spain. Many Muslim clerics teach that Islam will return to Cordoba, and Corboba has become a Muslim metaphor for conquest of the West.

Nonetheless, President Obama needs to chime in to lecture the rest of us that Muslims have their rights and we need to be sensitive to the Islamic community. (Apparently, they need not be sensitive to us.) After the following hue and cry over the president’s remarks, he backtracked somewhat, then facing criticism from the left for his backtracking, backtracked from his backtracking.

Then there’s the whole Obama attitude that America is just the same as every other nation in the world. Gone is Ronald Reagan’s vision of America as a shining beacon on the hill standing out among the rest of the whole world. Instead we have the worldwide apology tour for all the perceived slights and grudges that the rest of the world holds. If America is not a special place, why are we a wealthy nation and yet neighboring Mexico (with plenty of resources of its own) is dirt poor? Could it be that our culture had something to do with creating that wealth? And if Mexico is the equal of the U.S., why are so many Mexicans clamoring to come here?

The overall attitude that I perceive is that President Obama has no real appreciation of American culture or greatness. He sees greatness only in how the pie is sliced so that everyone is treated “fairly.” He fails to the see the greatness in the people who make the pie in the first place.

Posted in Democrats, General, Jim Walsh | 2 Comments »

Great Scott!

Posted by Jim Walsh on Wednesday, January 20, 2010

The Democrats are reeling from the victory of Scott Brown (R) over heavily-favored Martha Coakley (D) in the special election in Massachusetts to fill Ted Kennedy’s Senate seat. Excuse me, I should have said “the people’s seat formerly filled by Ted Kennedy.”

The Democrats are grasping at straws to explain away this defeat. Unlike the GOP gubernatorial victories in Virginia and New Jersey that were dismissed as anomalies over local issues and poorly-run campaigns, the Democrats have some real spinning to do to explain how a relatively little-known Republican state senator can overcome a 30 point deficit in a month against the well-known Democratic Attorney General of the bluest of blue states.

I knew that internal polls must have shown Coakley losing when stories were posted Monday about the finger pointing that was already going on among Democrats over the Coakley campaign. Coakley WAS a poor campaigner. Her comment about how she, unlike Brown, was unwilling to greet voters outside Fenway Pary in the cold during the Bruins’ New Year’s Day hockey game reeked of arrogance. Her dismissal of former Red Sox pitcher Curt Schilling as just another Yankee fan showed her disconnection from her constituents. Less than two weeks before the election, she took time off from campaigning to hold a fund-raiser among lobbyists in Washington. Brown, by contrast, ran a smart, consistent, near-perfect campaign. That said, in normal circumstances, even with such contrasting campaign styles, there is no way that Brown could have defeated Coakley in Massachusetts. There had to be an underlying anger among voters over what’s going on in Washington.

Some Democratic pundits are spinning Brown’s victory not as the people’s dislike of Obamacare, but as the people’s dislike of the distraction that Obamacare has become at the expense of addressing the issues of the economy and jobs. Let them spin. The fact is Brown explicitly campaigned on the idea that he would be the 41st vote against Obamacare.

It’s too soon to assess how the Democrats will respond. Some are urging full speed ahead on Obamacare. knowing that this may be their only chance to get this monstrosity of a bill passed. But that would be asking dozens of Democrats in Congress to sacrifice their own political careers for Obama. And that violates the first principle of politicians: self-preservation.

While the Massachusetts election results bode well for Republicans, we can’t be too smug just yet. The mid-term elections are over nine months away, and that’s practically a lifetime in politics. Until the last week before the election, the Democrats were caught napping in Massachusetts. I doubt that they will be so complacent in November.

Posted in Democrats, General, Jim Walsh, Republicans | 2 Comments »

Unintended Irony in the Baltimore Sun

Posted by Jim Walsh on Monday, December 7, 2009

Fresh off the heels of the tragedy at Fort Hood, the page 1 story of the Baltimore Sun on Monday, 12/7/09 is headlined “Fear of native terror on rise; Homegrown extremists alarm White House”. The article described the growing problem of homegrown Islamic terrorists, acknowledging growing radicalization among U.S. Muslims. The commentary page (13) on the same date calls for “End racial profiling now.” I have my doubts as to whether the editors of the Sun appreciate the irony.

The Sun’s lead article doesn’t mention that the U.S. Army failed to intervene earlier in the case of accused Fort Hood shooter Maj. Nidal Malik Hassan, in large part because acquaintances who were alarmed by his increasing radicalization were discouraged, in the name of diversity, from singling out a Muslim soldier for scrutiny. Even our military now genuflects at the altar of political correctness. But let’s face it, all 19 of the 9/11 hijackers were Middle Eastern Muslim men, yet our security system is supposed to pretend that a representative sample of geriatric Icelandic tourists poses the same threat to our security as a planeload of 20-something Muslim males returning to their local mosque after an extended visit to a remote backwoods training camp.

And on Pearl Harbor Day, no less, we are expected to forget the consequences of the failure of vigilance.

Posted in Jim Walsh, Media | Leave a Comment »

Obama Panders to His Base, Plays the Race Card

Posted by Jim Walsh on Thursday, July 23, 2009

President Obama, admitting he doesn’t know all the facts of the case, nonetheless said Wednesday (7/22/09) that “the Cambridge [MA] police acted stupidly in arresting [black Harvard professor, Henry Louis Gates Jr.] when there was already proof that they were in their own home. There’s a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately. That’s just a fact.”

To recap the story, Gates lost his keys and broke into his own home. A witness saw the incident and, thinking a burglary was in progress, called police. When police arrived, Gates refused to answer the door. Police claim Gates refused to show any identification, or identify himself to the police, and was ultimately arrested for disorderly conduct. Soon after the all too predictable hue and cry over the oppression of a black man by Cambridge Police, the charges were dropped. (They probably would have been dropped, anyway.) To his credit, the police sergeant accused of racism after he arrested Gates insisted Wednesday that he won’t apologize.

Let’s look at the incident from the police point of view. Having received a call of a burglary in progress, they discover a man inside who refuses to come to the door or identify himself. Had an actually burglary been in progress and had the police simply left the premises at that point, they would have rightly been accused of being derelict in their duty, and no doubt Gates and Obama would be chastising the police for their double-standard failure to protect black people’s homes. Instead, Gates chose to make a media event over a minor confrontation, and the PC media are ever so willing to oblige him. Obama, who insisted during the campaign that we would rise above racial divisions, nonetheless reverts to the reflexive call of racism, although there is no suggestion that the police acted contrary to standard procedure. Do you think that the police would have acted any differently if a white homeowner had responded the same way?

Posted in Democrats, Jim Walsh | 1 Comment »