tldr: Unlicensed Maryland landlords are violating the law, and you can sue them, when they try to collect delinquent rent from you (even with a failure to pay rent or summary ejectment action) for any month that the landlord was unlicensed.
In 2020, our client filed a class action lawsuit against a property in Baltimore City, Maryland, and against its debt collector attorneys, for collecting and retaining rent while that property was unlicensed. In Baltimore City, and in several Maryland counties, rental dwellings must be licensed. Baltimore City has an ordinance that explicitly states that landlords may not “charge, accept, retain, or seek to collect any rental payments” while unlicensed, and for periods of time when unlicensed.
Maryland’s high court issued its ruling on July 28, 2022, that provides broad potential relief for renters across the state that are suffering from slumlord and unlicensed landlord shenanigans. The case caption: Alison Assanah-Carroll v. Law Offices of Edward J. Maher, P.C., et al., Misc. No. 11,September Term, 2021.
Although the Court ruled that consumers do not get automatic refunds just because the property is unlicensed, the Court ruled that with a showing of “actual injury or loss” relating to the unlicensed condition of the property, consumers can get damages that may include a full refund of rent paid.
Further, in a ruling of significant consequence for renters across the state of Maryland, the Court ruled that “a landlord may not file an action against a tenant to recover unpaid rent that is attributable to the period when the property was not licensed” and “where a landlord attempts to collect unpaid rent from a tenant during a period when the landlord lacked a license to engage in such activity, a tenant may have a claim under the MCDCA and the MCPA to the extent that the landlord’s unlawful collection activity caused the tenant to suffer damages, including rent payments made in response to the landlord’s attempts to collect the unpaid rent.”
Here is what this ruling means, broken down into three key points:
1- If your rental property is in good condition, and you voluntarily pay rent to your unlicensed landlord, then you cannot get that money back.
2- If your rental property is in disrepair, and you voluntarily pay rent to your unlicensed landlord, then you have a claim for damages that may include a full or partial refund.
3- Regardless of the condition of your property, if your landlord is not licensed, and you do not pay rent for the months that your landlord is not licensed, then it is illegal for your landlord to try and collect that rent. The Court made it clear that this rule applies in any Maryland county (and Baltimore City) that requires a license for rental properties. The Court’s holding only extends to months when the property was unlicensed, but if the Landlord later obtains a license, it still is not allowed to collect rent for months when the property was unlicensed.
Now that Maryland’s highest court has set the record straight on what damages our putative class can be awarded, the case is back in Maryland’s federal court. We will keep you updated!
If you live in Maryland and believe that your landlord is unlicensed, fill out the contact form below and we will schedule a free consultation!
