It also can't be a property in which Vassal resides.
If the Vassal has been offered up in battle, from a Castle, or Palace or whatever, doesn't that mean he's not in the property? You're offering a ransom because of his defeat in battle...
"The Earl who must make the payment can select
any Property or Castle he possesses to Ransom, even a Castle
with another Lord in it (who is then discarded) or a Property
or Castle he knows will be destroyed as a result of this Battle.
An Earl who had 2 of his Lords captured could also use 1
captured Lord's Castle to Ransom the other, thus saving 1
Lord but dooming the other by giving away his home."