Owning and renting real estate can be tricky, especially if you don’t know all of the federal, state, and local laws. As such, owners and renters should become familiar with landlord-tenant laws in Maryland. Recently, there have been some changes to the laws. Here’s how the law changed, who it affects, and how to navigate landlord-tenant laws in Maryland.
Importance of Landlord-Tenant Laws
Landlord-tenant laws are important no matter which state you’re in. Keeping up to date with these laws is crucial for both landlords and tenants to avoid disputes and legal trouble. Some landlord-tenant laws are federal, some are statewide, and some are local.
Although all laws are equally important, there are a few overarching federal laws that all landlords must follow. For example, two primary federal laws include the Fair Housing Act and Fair Crediting Report Act. Here’s an overview of what these laws mean for landlords and tenants.
Fair Housing Act
Fair Housing Laws prohibit discrimination in real estate transactions, including rental properties. This law states landlords may not discriminate against tenants based on race, religion, color, national origin, sex, familial status, or disability.
These laws protect tenants from discrimination and impact how landlords can market their properties. For example, rental owners cannot market properties toward one “single person,” or it could be discrimination based on familial status.
Depending on what state you’re in, Fair Housing Laws may include additional protected classes. For instance, laws in Maryland state that landlords may not discriminate based on sexual orientation, marital status, gender identity, or source of income.
Fair Crediting Report Act
Most landlords want to verify a prospective tenant’s creditworthiness and look at their credit history a bit to see if they’d be reliable. Although it’s standard practice as part of the rental application process, the Fair Crediting Report Act requires landlords to get permission first before pulling a tenant’s credit report.
Additionally, if a landlord denies a tenant based on their credit report, landlords must provide them with the following information:
- Name, phone number, and address of the agency that generated the credit report.
- A statement that the consumer reporting agency did not make the decision to deny the tenant’s application and cannot provide further information regarding the decision.
- Inform the applicant of their right to dispute the accuracy of the report. Applicants can also request a copy of the information from the agency within 60 days.
- Provide a written letter stating their reason for rejecting the rental application, requiring a co-signer, or requesting a higher security deposit.
Landlord-Tenant Laws in Maryland
When it comes to state laws, they may differ depending on where your rental properties are located. Additionally, state and local laws typically become more involved than federal guidelines. For instance, state laws are more geared toward practical matters and tenant rights.
Landlords must understand and follow these laws at all times to run a successful rental business. So, although the laws vary from location to location, here are some of the most general landlord-tenant laws in Maryland.
- Security Deposit Laws
- Rental Agreement Laws
- Payment Laws and Laws Regarding Late Fees
- More Landlord-Tenant Laws in Maryland
Security Deposit Laws
In Maryland, security deposits aren’t required. However, we recommend that all landlords require a security deposit to protect themselves from property damages and nonpayment of rent. Security deposits in Maryland must not exceed two times the monthly rent amount, and landlords must provide a receipt for this transaction.
Once the security deposit is collected, landlords must hold it in an interest-bearing bank account dedicated only to rental security deposits. Along with that, landlords must deposit the money within 30 days in a Maryland bank account.
Within 45 days of a tenant moving out, landlords are required to return the security deposit with interest. If a landlord decides to withhold any amount of the deposit, they must provide an itemized list of damages and charges.
Rental Agreement Laws
Although there are a few requirements for rental agreements, what goes into it is mostly up to the landlord and tenant. For instance, if a landlord owns five or more rentals or the rental agreement is 12 months or longer, the landlord must provide a written lease.
If a tenant requests a copy of the lease, landlords must provide them with one. Each lease must include everything a landlord typically uses for their properties. A standard lease agreement in Maryland must include:
- A statement of the premises’ condition
- Landlord and tenant obligations regarding utilities
- A receipt for the security deposit
Payment Laws and Laws Regarding Late Fees
If a tenant makes a cash payment, the landlord must provide a receipt for the transaction. Also, landlords must record all payments, including the date and amount paid. Finally, landlords must add a section to the lease stating penalties for late payments when it comes to late fees.
Late fees cannot exceed more than 5% of the cost of one month’s rent. However, if the lease is a week-to-week rental agreement, fees cannot exceed $3 per week or $12 per month. Furthermore, Maryland has no grace period, so fees start accumulating as soon as a payment is late.
More Tenant-Landlord Laws in Maryland
- Disclosures- Like most state laws, Maryland landlords must disclose any lead paint-based hazards if the property was built before 1978.
- Notice of Entry- There is no notice of entry law in Maryland. However, most landlords give tenants 24 hours’ notice before entering the property.
- Right to Buy Rental Property- If a landlord plans to sell a single-family property, they must first offer it to the current tenant. However, the tenant must be living there for at least six months and respond to the offer within 30 days.
Which Landlord-Tenant Laws Changed in Maryland?
Maryland recently announced some significant changes to the state’s landlord-tenant laws. All landlords must become familiar with the changes to avoid legal ramifications. But what changed, and what does that mean for landlords? Let’s discuss.
As of October 1, 2021, changes were made regarding the landlord-tenant eviction process and termination of leases for residential properties. If a landlord wants to regain possession of a property under a Failure to Pay Rent filing, they must provide tenants with a ten-day notice. This notice will inform tenants that they have the right to pay the total amount owed within ten days or seek the advice of legal counsel.
The notice must be sent first class by certified mail and placed on the tenant’s door. Otherwise, landlords can send documents via email, text, or tenant portal if the tenant approves.
In addition, this amendment to Maryland Real Property Code, Section 8-401, allows tenants who make less than 50% of the median household income (for the state of Maryland) to seek legal counsel. Landlords are responsible for informing tenants of their rights, and failure to do so may result in the landlord’s filing for repossession to be dismissed.
Who’s Affected the New Laws in Maryland?
Both landlords and tenants are affected by the changes in Maryland’s eviction laws. However, landlords must adjust their lease agreements to reflect the new laws. After all, a landlord’s rental business isn’t bringing in its full income potential without on-time rental payments.
That said, landlords must adjust their leases to reflect the new law by updating lease agreements and informing tenants of their rights. Baltimore property managers are also responsible for keeping up with landlord-tenant laws to ensure compliance with each rental property.
Notice Tips for Landlords
If you’re a landlord and you think it’s time to give notice of lease termination, there are a few things to keep in mind. As of October 21, 2021, Maryland Real Property Code, Section 8-402, states that landlords must give these lengths of notices for non-renewal or termination of leases.
- Week-to-week leases = 7-day notice
- Month-to-month leases = 60-day notice
- Year-to-year leases (non-farm) = 90-day notice
- Year-to-year leases (farmland) = 180-day notice
- No lease agreement = 21-day notice
On the other hand, tenants are required to give the following lengths of notice:
- Week-to-week leases = 30-day lease
- Month-to-month leases = 30-day lease
- Year-to-year leases (non-farm) = 90-day notice
- Year-to-year leases (farmland) = 180-day notice
There are a few exceptions to this portion of the Maryland Real Property Code, Section 8-402. For example, landlords who own five or more residential rental properties are exempt from the notice requirement. Additionally, Baltimore County and Montgomery County rentals are also exempt from the condition.
Ensure Compliance with Management Professionals
Keeping up with landlord-tenant laws in Maryland, significantly when they’re changing, can put landlords in a tricky situation. However, when you hire rental property management, you can feel at peace knowing your rentals are compliant and managed adequately.
Bay Property Management Group offers comprehensive rental management services to busy landlords in Baltimore, Philadelphia, Northern Virginia, and Washington DC. Contact BMG today if you need assistance managing your rental business.
