Ten Tips for Landlords and Tenants
I am a litigator, so I deal with disputes between individuals on a daily basis. I’ve been litigating various types of landlord-tenant disputes in Maryland for over twelve years now. You do anything for that long and you begin to see patterns develop. The purpose of this article is to give readers a general overview of some issues that repeatedly occur in my practice when it comes to residential leases and some tips on how to follow the law so that you don’t end up on the wrong side of a dispute. If you have more specific questions that are not answered by this article, please send us an email or call to speak with one of our experienced landlord-tenant attorneys today. Please note that this article is designed to address issues dealing with residential leases only. While there may be some overlap with commercial leases, you should contact an attorney about specific questions. Feel free to email me at RSteinmetz@BaldwinBriscoe.com if you would like to discuss a specific concern.
1. Understand the Maryland law on Security Deposits
The basic provision of Maryland Law addressing the Landlord’s responsibilities with respect to security deposits arises out of Section 8-203 of the Real Property article of the Maryland Code. This section defines a security deposit as “any payment of money, including payment of the last month’s rent, in advance of the time it is due, given to a landlord, by a tenant, in order to protect the landlord against nonpayment of rent, damage duet o breach of lease, or damage to the leased premises, common areas, major appliances, and furnishings.”
Maryland law prohibits a landlord from charging a tenant or a prospective tenant asecurity deposit that exceeds two month’s rent. Moreover, it provides harsh penalties if a landlord does charge a security deposit in excess of that allowed by law. The statute allows the tenant to sue the landlord and recover threefold the amount charged that exceeds the permissible amount, plus attorney’s fees.
Maryland also requires that the landlord provide a security deposit receipt. Most residential leases will have a security deposit receipt right in the lease. This is a good idea because it makes it virtually impossible for the landlord to forget to comply with this requirement and makes it easy for the landlord to prove compliance if the parties end up in court.
The landlord must keep the security deposit in a financial institution that is FDIC insured. The landlord must deposit the security deposit within thirty (30) days of receipt and may keep one account for multiple properties. If the landlord chooses, the landlord can invest the security deposit funds into federally insured certificates of deposits (CDs).
If the landlord sells the property during the term of the lease, the landlord remains personally obligated to return the security deposit at the termination of the tenancy. Further, the landlord’s creditors are not permitted to attach or garnish security deposits held by the landlord.
Security deposits accrue simple interest at the rate of three percent (3%) per annum. The landlord is obligated to return the security deposit to the tenant, less any damages rightfully withheld, within forty-five (45) days following the termination of the tenancy. In many cases, the landlord’s financial institution may not pay three percent interest, so the landlord will have to make up the difference out of his own pocket. Whether or not the landlord returns any portion of the security deposit, the landlord is further obligated to provide a written list to the tenant of the damages, together with a statement of costs that were actually incurred, within forty-five (45) days. If the landlord does not comply the landlord forfeits the right to withhold any portion of the security deposit. As long as the letter is postmarked by the forty-fifth day, the landlord will be in compliance with the notice requirement.
If the landlord fails to return a security deposit, or a portion thereof, to which the tenant is entitled, the tenant may bring an action in court to recover the security deposit funds. The law further allows the tenant to recover treble damages, attorney’s fees, and court costs. Whether a court will or will not award all of these types of damages is entirely within the judge’s discretion.
A landlord may retain a security deposit to cover future rent where a tenant breaches and leaves before the end of the lease term. In that event, however, the landlord must return to the tenant any future amount that is actually received in rent by the landlord during the original term of the lease.
The requirements that the landlord provide a written list of damages and return the unused portion of the security deposit with interest, within forty-five days do not apply when a tenant is evicted from or abandons the rental property prior to the termination of the lease. In those cases, the tenant may request the return of the security deposit by sending a written request by first class mail to the landlord. If the tenant exercises this option, then the landlord must provide a written list of damages as described above.
The security deposit requirements may not be waived by agreement of the landlord and the tenant. If the parties attempt to waive these provisions, the courts will not give effect to the waiver clause.
2. What is and isn’t permitted in a Residential Lease
We’ve learned above, that security deposits in excess of two-month’s rent are not permitted in a residential lease. In addition to this requirement, the law also provides that the lease shall include a statement that the lease will be made available, in a condition permitting habitation, with reasonable safety, if that is the agreement, or if that is not the agreement, a statement of the agreement concerning the condition of the premises.
A written lease must also provide for whether the landlord or the tenant will be responsible for providing heat, gas, electricity, water, and repair of the premises.
Written leases may not include a provision whereby the tenant agrees to the entry of a confessed judgment for monies owed. A confessed judgment is a procedural tool that allows the plaintiff to obtain amoney judgment against a defendant without a trial. They are typically used in promissory notes.
A written lease may not require a tenant to forgo a right or remedy that is otherwise available by statute to the tenant. Some of these rights and remedies are described throughout this article.
A written lease may not provide for a late-payment penalty of more than five percent (5%)of the amount outstanding.
A written lease may not require a tenant to waive his or her right to a jury trial.
A written lease may not require a tenant to consent to a period for the landlord’s notice to quit which is shorter than provided by law. The parties may agree, however, to a longer period.
A written lease may not allows the landlord to take possession of the rented property, or the tenant’s belongings, without going through the legal eviction process, unless the tenant has abandoned the property.
A written lease may not include a clause that exculpates or requires the tenant to indemnify the landlord from liability to the tenant or a third party based on the negligent conduct of the landlord on the premises, or injury sustained on a portion of the property that is not exclusively controlled by the tenant.
Finally, a written lease may not allow a landlord to terminate the lease solely because the tenant has joined or formed an organization of tenants with the purpose of collectively negotiating with the landlord. If a landlord includes any of the prohibited provisions within a lease, the provision itself is void and unenforceable. In most cases, the remainder of the lease is still valid and enforceable.
A verbal or oral lease is permitted in Maryland. While a verbal lease in no way diminishes the rights of the parties, they can make it difficult to prove what the terms of the agreement are when that agreement is in dispute. If the terms of the tenancy are going to be for more than a year, the lease must be in writing under the Maryland Statute of Frauds.
3. Maintenance and Repair of Rental Properties
When a tenant rents a property, certain maintenance and repair issues will almost always arise at some point during or at the termination of the lease. These issues typically include repainting, replacement of carpet, repair of appliances, and many other things that will have to be done to restore the property back to the condition in which the tenant received the property, so that the tenant can continue to use the property, or to prepare the property to be leased to a new tenant.
Landlords and tenants will often approach a lawyer with questions about what their rights and responsibilities are with respect to damage and repair of the property and of course they often ask who is responsible for paying for the damage. The answer to that question depends on whether the damage is what is called “ordinary wear and tear” or whether the damage rises above this level.
Ordinary wear and tear means the deterioration of the property that occurs without negligence, recklessness or abuse of the premises, furnishings or appliances on the property by the tenant, the tenant’s family or others on the property with the tenant’s consent. Essentially it is what occurs when some part of the structure simply wears out with age. As you can imagine, there is considerable discretion given to the court as to whether damage falls under the rubric of ordinary wear and tear. It is advisable, for this reason, for both the landlord and tenant to take photos of the property both at the beginning and end of a lease term to show the condition of the property at both times.
At the termination of a lease, the landlord is obligated to return the tenant’s security deposit, plus interest, but may withhold from that deposit money to pay for damages to the premises. The landlord may not, however, withhold money to pay for damages that constitute“ordinary wear and tear”.
The tenant has the right to be present for the landlord’s inspection of the property at the termination of the lease. If the tenant wishes to exercise that right, the tenant must send a notice to the landlord, by certified mail, telling the landlord when they are moving and giving the landlord their new address. Upon receipt of this notice, the landlord must notify the tenant, by certified mail, of the date and time of the inspection. The landlord must notify the tenant of this right at the time that the lease is entered into. If the landlord fails to do this, the landlord forfeits its right to withhold any portion of the security deposit.
4. Taking Possession at the Beginning of the Lease
Residential leases contain an implied covenant of quiet enjoyment. This means that the tenant has the right to peaceably and quietly enter into the leased premises at the beginning of the lease. While this may seem obvious, there are circumstances which sometimes come up where this doesn’t happen. Usually the issue arises when a prior tenant has failed to vacate the property as agreed, or there is a problem with the condition of the property which makes it unsafe for the new tenant to move in. As stated, the covenant is implied in every residential lease. This means that the tenant is protected whether or not the lease has such a written provision.
The tenant has two remedies available where the landlord fails to comply with the covenant of quiet enjoyment. The first is that the tenant may abate the rent until there is compliance. The second is that the tenant may terminate the lease based on the landlord’s failure to deliver the premises as agreed. Once the landlord delivers possession of the premises to the tenant, the tenant may not exercise either option.
If the landlord fails to comply with the covenant of quiet enjoyment and the tenant terminates the lease, the landlord must return to the tenant all rent and the security deposit that has been paid. In addition the landlord is liable for damages from the date that the tenant gives notice that it cannot enter the leased premises. This could, for example, include hotel bills and expenses for renting a storage unit as well as additional moving expenses, like the need to rent a moving truck or hire a moving company for a second time.
A landlord may not be able to honor the covenant of quiet enjoyment where the prior tenant has failed to vacate as agreed or pursuant to valid notice. In this case, the landlord should file a tenant holding over action as described below, and can join the new tenant as a party to that action.
5. The Eviction Process
A tenant may be evicted, that is forcibly removed, from the leased property under certain circumstances. When a landlord is seeking to evict a tenant, the process is started by filing the proper eviction papers with the District Court. The court provides standard forms for each type of eviction which are available through the clerk’s office. Which form you need depends on the reason for the eviction. There are three types of evictions in Maryland:
a. Failure to Pay Rent
Probably most common of the three types of evictions is the Failure to Pay Rent. The landlord begins the process by filing a complaint form, provided by the court clerk that lists the name and address of the landlord and the tenant, the property that is being leased, the amount of rent that is owed and other basic information. The landlord or their attorney signs and dates the form and files it with the clerk along with the appropriate fees. The court charges a fee, currently $12.00 at the time the complaint is filed. In addition, the court collects a service fee that goes to the sheriff. The service fee is $5.00 for each tenant of record.
Once the complaint form has been filed and the fees have been paid, the court will assign a trial date. This date is stamped onto the complaint form and copies are provided to the landlord and the tenant. The tenant is served by delivering a copy of the complaint to the property and posting it in a conspicuous manner as well as mailing a copy of the complaint to the tenant. The court handles service on these complaints so the landlord does not need to hire a process server like they would in a normal civil lawsuit.
On the trial date, the court calls all of the landlord-tenant cases. Often there are other types of trials, such as criminal cases, civil cases, and domestic violence cases scheduled for the same time and courtroom. When the clerk or judge calls the case, the landlord and tenant step into the well and state their positions. The landlord states the amount of rent that is due and outstanding and the tenant states whether they agree or disagree. If there is agreement, the court will enter a judgment for the landlord. If there is disagreement, the court will hear evidence from both parties concerning the amount of rent due and will enter a judgment if the landlord proves by a preponderance of the evidence that there is rent due and owing. In most cases,the court will enter a judgment for possession of the premises only. This means that the landlord has the right to reclaim the property unless the tenant pays, but not the rights normally associated with a money judgment. The court can, if there is personal service, and the landlord requests, enter a money judgment against the tenant for the rent due.
There are very few defenses available in a failure to pay rent case. Normally, the only successful defenses are that the rent was previously paid, that the landlord has miscalculated or misstated the amount of rent due, that the defendant is not a party to the lease, or there is a rent-escrow issue. Rent Escrow issues are discussed later in this article. If a tenant’s defense is that the rent has already been paid, or has been miscalculated both the landlord and the tenant should be prepared to show their evidence to the judge to resolve the dispute.
Be sure to scroll down to learn what happens after your hearing!
b. Breach of Lease
A breach of lease occurs when the tenant does something that is prohibited from by the lease or fails to do something that is required by the lease. In most cases, the landlord must give the tenant 30 days written notice to vacate the premises and an opportunity to cure the defect giving rise to the breach before legal action can be taken to evict the tenant. If, however, the action or inaction of the tenant is causing clear and imminent danger to themselves, the landlord, other tenants, or the property, the landlord must only give 14 days written notice to cure.
At the expiration of the notice period, if the tenant fails to cure the defect or vacate the premises, the landlord may file a written complaint with the District Court seeking possession of the premises. If the landlord files the complaint too early, that is before the notice period runs, the landlord will not be able prove it gave proper notice and will lose in court. Like the Failure to Pay Rent complaint, the court arranges for service and notice to the tenant and schedules a hearing date.
At the hearing, the judge will determine whether the tenant in fact breached the lease and if the breach was substantial. If the court determines that there was a breach and it was substantial, then the court will give a judgment to the landlord for possession of the premises. A landlord may accept rent that is paid after giving notice of a breach of lease, but before a tenant is evicted without adversely affecting their case.
c. Tenant Holding Over
A Tenant Holding Over action is instituted when the landlord desires to force a tenant out of the property at the end of the lease and the tenant refuses to leave. When the landlord desires to obtain possession of the property at the expiration of the lease, the landlord must give the tenant one month’s written notice to the tenant of their intent. If the tenant gives verbal notice to the landlord, the landlord may can also recover possession, but it is usually difficult to prove that notice was given under these circumstances. Where verbal notice is given by the tenant, the landlord is advised to follow up with written confirmation.
When acomplaint is filed, the sheriff will deliver a summons to the tenant to appear in court at a hearing to show cause why restitution should not be made to the landlord. At the hearing, the judge will determine whether there is a valid lease, if so, when it expires, and whether the landlord gave proper written notice to end the tenancy. If the court determines that those requirements are met, it will enter a judgment in favor of the landlord for possession of the property.
In addition to obtaining a judgment for possession of the property, the landlord can also get a money judgment in a Tenant Holding Over action for actual damages caused a result of the tenant holding over. In order to obtain a money judgment, the landlord must first have personal service on the tenant. Personal service means that the tenant was handed a copy of the summons, usually by the sheriff, or signed for the summons where it was delivered by certified mail, return receipt requested. Landlord-tenant summons are almost always served by the sheriff. Personal service is not guaranteed, however, as it is not necessary to obtain an eviction. An eviction may be had, although no money judgment may be given, where the landlord posts the summons on the property and sends a copy of the summons to the tenant via first-class mail. Although other types of damages may be obtained, at a minimum, the landlord may obtain the apportioned rent for the period of holdover at the rate that is stated in the lease. In cases where the landlord has failed to obtain personal service over the tenant, the landlord may bring a separate case to obtain a money judgment. Special rules apply for a nonresidential tenant who is served with a summons. A nonresidential tenant may appear and defend in an eviction proceeding without subjecting themselves to a potential money judgment in the action, if the tenant asserts that the appearance is for the purpose of defending an in rem action prior to the time that evidence is taken by the court.
Like in a breach of lease case, a landlord may accept rent paid by the tenant after notice is given concerning a hold-over, without adversely affecting their case. The acceptance of the rent does not act as a waiver of the hold-over or the notice to quit, unless the parties so agree in writing. If the tenant remains on the property as a hold-over tenant, and the landlord consents, the tenant will then become a periodic tenant, either week-to-week or month-to-month, based on when the rent was payable under the terms of the original lease.
d. Wrongful Detainer
A wrongful detainer action is brought where the person occupying the property has no legal right to be there. This might happen where someone refuses to leave a property after the property is sold or deeded to a new person. It could also occur when someone enter the property without the permission of the true owner and moves in. This does not apply, however when the foreclosing lender or purchaser seeks to evict the owner of the property. There is a separate procedure that applies in those circumstances which is beyond the scope of this article.
e. What Happens After the Hearing?
In any of these cases, failure to pay rent, breach of lease, tenant holding over, or wrongful detainer, the court makes a determination whether the landlord or property owner is entitled to immediate possession of the property. If the landlord proves it is, by presenting testimony and evidence on the relevant issues, the court will grant a judgment for possession of the property to the landlord or owner.
In landlord-tenant cases, there is a relatively short period for appeal. The time period is four days for failure to pay rent cases and ten days for the other types of cases described in this article. The landlord or owner cannot taken any action until the appeal period has run. Once the time for appeal has expired, the landlord may file a Petition for a Warrant of Restitution with the district court.
When the Petition for Warrant of Restitution is filed, it is reviewed by a judge and the judge will sign an Order directing the sheriff’s office to restore the property to its lawful owner. The judge will also specify whether or not the tenant or occupant has a right of redemption. The right of redemption is determined at the time of the hearing. In Maryland, a tenant who is facing eviction for failure to pay rent has a right to redeem the property and avoid an eviction by paying the amount of rent determined by the court to be due and owing, together with any court costs, prior to the date and time of the eviction. A tenant facing eviction for breach of lease or holding over has no such right.
Where a tenant has had three prior judgments for failure to pay rent filed against him in the twelve months preceding the initiation of the action being assessed, the landlord may request that the right of redemption be foreclosed. If the landlord requests this and the court determines that the landlord is entitled to a foreclosure of the right of redemption, the court will, as part of its judgment foreclose the right of redemption. If this happens, the tenant no longer has the right to redeem the property by paying the outstanding rent.
A landlord or tenant may appeal from a judgment for possession of the property. In a failure to pay rent case, the appeal must be filed within four days of the judgment. In a breach of lease, tenant holding over, or wrongful detainer case, the appeal must be filed within ten days of the judgment. In most cases, an appeal will result in a new trial in the Circuit Court. In this “denovo” trial, the Circuit Court does not consider the evidence introduced in the District Court. In certain cases, such as when the amount in controversy exceeds $5,000, the Circuit Court will hear the appeal based on the evidence presented in the District Court.
A District Court judgment will not necessarily be stayed pending the outcome of the appeal. In those cases, the tenant will have to file a bond in order to stay the eviction until the appeal is decided. If the landlord is the party taking the appeal from the District Court, there is likely no judgment for possession, thus a stay is not relevant to the judgment.
6. Rent Escrow
In residential leases, the tenant has the legal right to occupy a property that is free of any serious and dangerous defects. This protection applies both to the individual unit occupied by the tenant as well as the common areas. In order to exercise this right, the tenant must show the court that the alleged defect threatens the health and safety of the tenant, and is not merely an aesthetic flaw in the property. The statute is designed to protect against fire hazards and other defects which threaten the life, health, or safety of the occupants.
Some defects which will give rise to relief in a rent escrow actions include lack of heat, light, electricity or hot or cold running water. If the tenant is without these services solely because the tenant failed to pay the utility bill, however, the tenant will not be afforded any relief. Other basis for rent escrow include lack of adequate sewage facilities, infestation of rodents, structure defects which present a threat to the safety of the residents, or other condition posing a threat to the health and safety of the occupants.
The rent escrow is not designed to cure aesthetic flaws or other defects that do not affect the health and safety of the tenants. Problems concerning the appearance of paint, old or torn rugs, small cracks in the floors, ceilings and walls, the absence of linoleum on tiles or floors, provided that they are structurally sound, or the absence of air-conditioning, are not a proper basis for relief under the rent-escrow statute. If there is lead-based paint that is cracked, chipped, or peeling, however, a rent escrow action would be appropriate.
In order for the tenant to exercise their rights under the rent escrow statute, they must first give the landlord notice, and an opportunity to cure the defect. Notice shall be given by certified mail, listing the conditions or defects. Notice may also be proven if the tenant can show that the landlord had actual notice of the conditions or defects. Finally, notice can be proven through a written condemnation or other notice from a state, county, or municipal agency asserting the conditions or defects.
Once notice is given, the landlord is afforded a reasonable opportunity to repair the condition or defect. If the landlord fails to fix the problem within a reasonable time, the tenant can file a rent escrow action and ask to pay rent into the court pending the repair of the property. The tenant may also raise the issue of rent escrow as a defense if the tenant is sued for rent by the landlord.
The rent escrow statute allows the tenant to request an injunction, asking the court to order the landlord to repair the condition or defect. The tenant may be required to pay the rent due into the court registry as a condition for relief under the statute. The court has the authority to modify the amount of rent and may do so based on the condition of the property. A tenant may not obtain relief under the rent escrow statute if they have three prior judgments for rent due and unpaid against them within a twelve-month period prior to the filing of the rent-escrow action.
A landlord may raise as a defense, that the tenant refused to allow the landlord to enter the property to fix the condition giving rise to the action. The landlord may also raise as a defense that the tenant caused the condition giving rise to the action.
In a rent escrow action, the court may order the termination of the lease and the return of the premises to the landlord, subject to the tenant’s right of redemption. It may order that the rent escrow dismissed. The court may make an adjustment or abate the rent, due to the condition of the property. It may also order the landlord to make repairs to the property. At the conclusion of the case, the court will order a disbursement of any money held by it in escrow. The distribution of that money will depend on whether the landlord has made the repairs that were ordered.
7. Terminating or Renewing the Lease
There are specific procedures by which a landlord or tenant may terminate a lease. These procedures apply whether the lease is for a specific term or at will, i.e. month to month or week to week. When the landlord desires to retake possession of the property at the end of a lease, the landlord must give notice, in writing, to the tenant one-month prior to the end of the lease term, or one-month prior to the time when the landlord desires that the tenant moves out.
Almost every residential lease will automatically convert to a month-to-month tenancy at the end of the initial term. By statute, if the automatic renewal period exceeds one-month, the lease must specify that in writing and the tenant must initial or otherwise acknowledge in writing that specific provision of the lease. If the lease does not contain the tenant’s written acknowledgement of an automatic renewal provision exceeding one-month, it is unenforceable.
A written lease may not require a longer notice period to be furnished by the tenant to the landlord in order to terminate the tenancy than that required of the landlord to the tenant in order to terminate the tenancy.
When notice is given to terminate, it should be specific. The party giving notice should date it, state specifically when they intend to terminate the lease and, in the case of the tenant, providing a forwarding address to the landlord. It is advisable, although not required, that the notice to vacate, or notice of intent to terminate be sent by both certified mail return receipt requested, and by first class mail. The notice could also be personally delivered. By using certified mail, however, the party creates a record proving when and how the notice was given which may be used later in court, if necessary.
There are special rules that apply for military members desiring to terminate a lease when they receive a permanent change of station, or a temporary change of station that exceeds three months duration. In addition, the landlord and tenant are free to negotiate additional clauses that would permit a premature termination of the lease, such as where the tenant obtains a job that requires her to move or the landlord desires to sell the property.
8. Special Termination Rules for Victims of Domestic Violence
Maryland has a law that allows a tenant to terminate a lease where the tenant, or another occupant of the property is a victim of domestic violence or sexual assault. In order to terminate the lease, the tenant needs to provide written notice of their intent to vacate and provide a copy of the applicable protective order or peace order to the landlord. Once the notice is provided, the tenant has thirty (30) days to vacate the property. If the tenant provides notice, but fails to vacate, then the landlord may, at its option, pursue the remedies available the remedies for a tenant-holding-over. These remedies are described earlier in this article.
If a lease is terminated with respect to a victim of domestic violence, the lease remains in effect with respect to any tenant who is a respondent in an action that results in a peace or protective order for the benefit of the victim tenant or the victim legal occupant.
9. Subletting and Amendments to the Lease
A sublet is when a tenant of a lease allows a new individual to occupy the property, either as a co-tenant or as the sole occupant of the property during the term of the tenant’s lease. There are no laws prohibiting the subletting of rental property in Maryland, however it is often prohibited under the terms of a written lease.
If a tenant sublets the property without the consent of the landlord, and subletting is prohibited by the lease, the tenant can be evicted and the lease can be terminated for breach of lease. If the landlord does not object to the sublet, the landlord may permit the sub-tenant to continue to occupy the property and may even accept rent from the sub-tenant in lieu of accepting rent from the original tenant.
When considering a sublease, it is important to keep in mind that the original tenant is not relieved of its obligations under the terms of the original lease. The landlord can pursue a claim for damages against the original tenant for any damage to the property or rent that is not paid by the subtenant. Essentially, in the case of a sublease, the original tenant acts as a guarantor of the subtenant’s performance under the lease.
An amendment to the lease occurs where the parties agree to change the terms of the lease. Although amendments are not required to be in writing, it is always advisable to prepare a written amendment so there is no confusion as to whether the amendment has in fact been agreed upon and the parties have clarity as to what the exact terms of the amendment are.
Almost any term of a lease can be changed by amendment, including, for example, the amount of rent, the date that it is due, the identity of the tenants, the identity of the landlord, the guarantors, if applicable, the description of the property that is being rented, the provisions for payment of utilities, and the list goes on and on. When the parties amend the terms of a lease, but less than all of the original parties sign the amendment, there may be a lease novation. In that case, any party to the original lease, who did not agree to the terms of the amendment are no longer bound by the lease. This is important to keep in mind when considering an amendment and evaluating the risk incurred in the future performance under the lease.
A landlord may not unilaterally change a lease during the initial term. If the landlord desires to change the lease after the initial term, it may do so by giving at least thirty (30) days notice to the tenant.
10. How do I collect money owed to me?
After a tenancy has ended, whether it be due to the natural termination of a lease, or following an eviction, or an abandonment, there is often a claim from either the landlord or the tenant that money is due and owing from the other party. This money could be for unpaid rent or damages, or in the tenant’s case, for a security deposit that has not been returned. In either event, the landlord or the tenant may desire to pursue a claim for money damages.
In Maryland, if the damages claimed are less than Thirty Thousand Dollars ($30,000.00), the landlord or tenant may bring an action in the District Court. Complaint forms are available on the Maryland Judiciary website, https://www.courts.state.md.us/district/forms/civil/dccv001f.pdf. The form is self-explanatory and can be completed online, printed and taken to the court. When filing the form, there is a filing fee of $28.00 if the claim is less than $5,000.00 and $38.00 if the claim exceeds $5,000.00. The court gets filed with the District Court Clerk’s office. They will generate a summons which then needs to be personally served on the defendant. The summons will have a court date.
When there is a written lease between the parties, the plaintiff can file their complaint under affidavit. If this is properly done, the court can enter a judgment in favor of the plaintiff, without conducting a trial, if the plaintiff attaches sufficient evidence to the complaint and submits an affidavit in support of judgment. If the defendant files a notice of intent to defend, an affidavit judgment is not available.
Where a notice of intent to defend is filed, or the complaint is not filed under affidavit, the plaintiff will have to appear and present evidence of their case. They plaintiff will testify concerning the terms of the lease and what happened. The defendant will also be given the opportunity to present evidence. Either party can call additional witnesses, and introduce documents such as contracts, correspondence and photographs, as they determine to be appropriate.
If the plaintiff proves their case, the court will enter a judgment for money damages in favor of the plaintiff, and will also award the plaintiff the court costs for filing the complaint. If the claim does not exceed $5,000.00, the small claims rules will apply. In these cases, the court does not allow pre-trial discovery and the formal rules of evidence do not apply. This means that the judge can consider things such as hearsay evidence and may not require authentication of documents.
If the claim is for more than $5,000.00, the parties will be subject to all of the formal rules of evidence. It is advisable to hire an experienced landlord-tenant attorney in these cases.
Once a judgment is entered, the defendant will probably hand over a suitcase full of cash in the courtroom. Okay, well, if that doesn’t happen, the plaintiff will have to figure out how to collect on the judgment. Often, obtaining a judgment is the easiest part of the process. Collecting on that judgment can be difficult.
Once a judgment has been entered, and thirty days have passed, the plaintiff may file a request for an oral exam. The District Court provides a form for this request. A sample of the form is available at this link: https://www.courts.state.md.us/district/forms/civil/dccv032np.pdf
Unlike the form for a complaint, however, the form for an Oral Exam cannot be printed out from your computer. It is a carbon, multi-part form, which means that you have to go to the courthouse to obtain the form, fill it out, and file it with the clerk, along with the fee. A few days after you file the request for an oral exam, the court will assign a hearing date and a judge will sign an order directing the defendant to appear in court on that date for the oral exam. You can request, and the judge will usually order that the defendant bring documents with him when he comes to court. These would include paystubs, bank statements, titles to vehicles, and other documents reflecting information pertaining to the defendant’s assets or income.
Once you have information pertaining to a defendant’s assets and income, you can then file a request for a writ of garnishment or a request for a writ of execution/levy. A garnishment request isused when seeking to attach wages or money in a bank account. A writ of execution is used to seize personal property that is owned by the defendant to sell in order to satisfy the judgment. A writ of execution may also be used to levy against and force the sale of real property.
A judgment accrues interest at the rate of 10% per annum. A special rule applies to judgments for rent of a residential property whereby the interest rate is only 6% per annum. Interest on judgments is not compounded. Proceeds are applied to costs and interest first and then to judgment principal. When payments are made on a judgment, the plaintiff has a duty to file a monthly report with the court and provide a copy to the defendant. When a judgment is paid in full, the plaintiff must file an Order of Satisfaction notifying the court that the judgment has been paid, and provide a copy to the defendant.
It is important to keep in mind that the parties to a contract have a duty to mitigate damages. This means that the landlord must act in a timely manner and take reasonable steps to re-rent the property following an eviction or abandonment. In the event that the landlord does re-rent the property, any money received from the new tenant, during the term of the initial lease, must be deducted from the landlord’s claim against the original tenant.
The attorneys at Baldwin & Briscoe have years of experience in all aspects of landlord-tenant matters. This article contains general information about the law and is not intended to be a substitute for legal advice. In order to know how the law applies to your specific situation, you should speak to an experienced attorney. Your rights and responsibilities will depend on the specific facts of your situation. Call or email us today to set up a confidential no-obligation consultation.