Every year, new laws are passed that affect rental property owners and managers. Unless you want to get sued for breaking the law, get fined for some infraction, or get embarrassed when you lose an argument or money because a tenant knows more than you, keeping informed about these changes is important. For over 100 years, rental property buyers and sellers have relied on the Ben Frederick team for quality apartment property real estate services. For the past 40 years, Ben Fredrick has been involved in monitoring and negotiating legislation affecting our industry as an active member of the Legislative Committees of the Greater Baltimore Board of Realtors, The Property Owners Association of Greater Baltimore, and the Maryland Multi-housing Association.
Tenant Protection Act
April 12th marked the end of the Maryland General Assembly’s 2022 legislative session, in which, 2520 bills were introduced. The Tenant Protection Act of 2022 changes the requirements when a landlord passes through utility costs to tenants, how security deposit forfeitures are handled, requires a landlord to allow tenant organizations to meet in community spaces, and allows the tenant to cancel their lease without penalty if he or she is a victim of abuse.
The utility section of senate bill number six requires a landlord who uses a ratio utility billing system to provide:
- A statement that the tenant will be billed by the landlord for allocated utilities and identifies each such utility.
- A description of the method used to allocate the cost to the tenant.
- A statement that any dispute relating to the computation is between the landlord and the tenant.
- That is the average monthly bill for all dwelling units in the property for the previous calendar year.
- A statement that the tenant has a right to inspect the records retained by the landlord upon written request.
- Disclosures of any additional charges or administrative fees for which the tenant will be responsible. The lease should reference this new law and also provide that this portion of the lease is unenforceable if the landlord fails to provide the above-noted information. On written requests by the tenant, the landlord is obligated to allow the tenant to inspect the landlord’s records that document a bill for utilities.
The next section of the Tenant Protection Act deals with security deposits. When it comes time for a tenant to move out if any portion of the deposit is withheld for payment of utilities, repairs or damages. The landlord must include an itemized statement of the actual cost incurred and unpaid by the tenant, including supporting documentation that identifies the materials or services for which the tenant is charged. If any of these costs are estimated the landlord must notify the tenant when the repairs have been actually completed and provide a final invoice itemizing the cost of such repairs. If the actual cost is less than the estimated cost, the landlord must refund the difference within 30 days of the repairs being completed.
Next, the Tenant Protection Act of 2022 allows tenant organizations to assemble and hold meetings in apartment properties that have a community room, meeting room, or assembly room that is generally available for tenant use. The landlord must provide free access to this room for one tenant meeting organization per month. The landlord may charge a reasonable room rental fee if the tenant organization uses the room more than once per month. Finally, the Tenant Protection Act of 2022 allows a tenant who has been a victim of abuse, as defined by a physician, a psychologist, social worker, or case worker of any health or social services agency to determine his or her lease and be responsible for rent only for 30 days after providing the notice, provided that the tenant is vacated as a result of being a victim of abuse. If the tenant fails to vacate after having provided the notice, the tenant is responsible for the full rent for the remainder of the lease.
Lead Certification
House Bill 174 is a huge victory for tenant lobbyists. After 20 years of opposing this measure, the validity of a Lead Inspection Certificate may now be an issue of fact at a trial. If a lead certificate is required and is not provided or not available, a judge may rule in favor of the tenant. Landlords are advised to be diligent and comply with the provisions of the Lead Poisoning Prevention Program, being certain to keep a good filing system for lead inspection certificates.
Pandemic Law
House Bill 521 is a COVID-19 pandemic-related law that applies to tenants on whom a landlord filed a failure to pay rent notice, or an eviction notice between March 2020 and January 2022 where the tenant eventually paid the rent before eviction. This new law allows the tenant to file a petition in rent court to have their records shielded such that the case will not appear on the public records. The shielding of records is only available to tenants who experienced a loss of income due to the COVID-19 pandemic.
Live Eviction Requirements
Next, House Bill 932 requires landlords to accept, at a live eviction, a check if the check is from a political subdivision or a government entity as a payment for the rent in order to avoid eviction. Normally and otherwise, the landlord is advised to demand cash or certified funds from the tenant if the tenant pays at an eviction or immediately prior to a live eviction.
Funding For Tenants’ Rights Lawyers
Last year, legislation passed granting tenants a right to counsel. In other words, the right to have an attorney represent them. If they could not afford an attorney, the state would provide a free attorney, however, no funding was passed for the government to provide free lawyers to tenants. So, in 2022, House Bill 571, requires the governor to fund 14 million dollars a year to provide lawyers for tenants using money from the state’s unclaimed property fund. This bill takes effect July 1st and ends December 31st, 2024. Afterward, the attorney general is required to use money received from the Consumer Protection Division cases to fund free attorneys for tenants.
Eviction Data Collection
House Bill 824 requires the judiciary to collect, compare and compile eviction data each month to be published in the Department of Housing and Community Development website. The data is to be made available to state agencies, counties, and academic institutions upon request.
Lead Paint
Here is an update on lead-based paint. The amount of lead in the blood of a child that triggers a lead poisoning case and also triggers case management, notification of lead hazards, and remediation of lead hazards such as a modified risk reduction in rental properties were previously set by law by the Maryland legislature. In 1994, for example, that level was 25 micrograms per deciliter and has been lowered over the years to its current level of 10. In 2022, the Maryland legislature decided to defer to the CDC for this level. So, now the law states that whatever the CDC determines is the action level that will be applied to rental properties in Maryland.
Other Legislation
Two other notable developments, not directly related to rental real estate are 12 weeks of paid leave for employees and a climate bill that affects large buildings. For paid leave, the state is required to set up an insurance program, permitting employees to take up to 12 weeks of partially paid leave to deal with family matters such as the birth of a child, care for an unwell loved one, or military deployment. The state will establish an insurance pool with both workers and employers contributing a small amount. The program covers full-time, part-time, private, and public sector employees. Employers with 15 or fewer employees will not be required to contribute to the program but their employees can benefit.
The “Climate Solutions Now” legislation is a huge bill that requires large buildings to have net zero carbon emissions by the year 2040.
We hope that this update of the changes in the laws affecting rental property owners helps you stay ahead of the curve and implement business strategies and practices to maintain profitability while complying with all applicable laws. We at Ben Frederick Realty enjoy working with our clients and want all of them to be hugely successful in acquiring properties, disposing real estate, and imagining property operations. Contact the team at Ben Frederick to get started today.
