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Baltimore rental property management 101: To remain compliant, always know what the laws say

If you are new to property management in the State of Maryland, you may (or may not!) know there aren’t a single set of laws governing your roles and responsibilities towards your tenants. A triage of Federal, State, and local municipality laws influence what property owners and managers can and can’t do.

And, to add to that mix, in some instances, local laws might trump State laws, making Baltimore rental property management slightly more challenging for newbies. Yet, that’s even more reason why everyone – regardless whether you are a veteran property manager, or a newly-minted owner-manager – must know what the law allows.

Baltimore City Department of Housing & Community Development highlights various aspects of owner and tenant responsibilities. In this post, we’ll touch upon certain aspects of those laws, and cover other lesser-known angles that impact property owners’ and managers’ roles and responsibilities.

Most property owners, especially first-time rental property investors, often don’t grasp the subtilities of the laws that govern their actions viz. rental or lease relationships. The direct consequence of such oversight is a legal infringement. For instance, the currently enforced “Late Fees for Past Due Rent” laws, enacted by the Baltimore City Council on March 22, 2021, change how landlords charge late rent payment fees.

Some such laws become effective immediately, while others only take effect after some notice period; and still others may be retroactive – covering periods several months before the law is signed. In addition to penalties, fees and fines, failure to understand and comply with the nuances, letter, and spirit of the law, may result in permanently distorting the landlord’s record.

To avoid these setbacks, it’s advisable that rental property owners only work with experienced companies practicing rental property management in Baltimore. That’s because these professionals work with the laws on an daily basis.

Here’s a preview of some of these laws:

1) THE LAW GOVERNING LEASE and RENTAL AGREEMENTS

The lease and/or rental agreement determines the legal relationships between landlords and tenants. As such, it’s important to understand what each type of relationship entails. Leases are typically year-long agreements, while rentals may be month-to-month.  Almost all states (including Maryland) recognize an automatic month-to-month arrangement upon expiry of an initial lease.

The mechanics of how Leases transition into Rentals, however, may not be as straightforward – and that’s where an experienced Baltimore rental property management company can help. In some instances, continuing to accept month-to-month payments, at the end of a lease, constitutes auto renewal of the lease. That might not be the case nation-wide.

2) THE LAW GOVERNING THE RIGHT TO ENTRY

Unlike some states, Maryland’s landlord-tenant regulations do not contain state-wide legislation governing entry notification. However, the lack of such provisions does not mean suitable arrangements governing a landlord’s right to enter a unit can’t (or shouldn’t) exist. Such provisions typically exist in lease agreements. To be enforceable, both parties to the agreement – tenants and the landlord (and/or a company providing rental property management in Baltimore) - must agree to any such stipulations.There is once caveat to the above: In case of an emergency, landlords have the absolute right to enter a rental unit without notice.

3) THE LAW GOVERNING FAIR HOUSING PRACTICES

This is one important instance where federal Fair Housing Act (FHA) provisions trump any other terms and conditions negotiated locally, or deemed incorporated in lease or rental agreements. Under these provisions, that are also applicable in Maryland, rental and leasing provisions may not discriminate against lessees/renters based on:

• Race
• Color
• National Origin
• Religion
• Sex
• Familial Status
• Disability

Most new property owners may interpret these laws as “common sense”, however, they aren’t equally applicable to all rental housing units across Baltimore. While the fair housing act applies to most housing properties, there are certain exemptions. For instance, owner-occupied residences with less than 4 units, and single-family properties rented without using an agent, are some examples of FHA-exempt properties.

4) THE LAW GOVERNING SECURITY DEPOSITS

When a new tenant moves into a rental unit, Maryland laws allow property owners (or their legal agents) to collect an amount as security deposit. That refundable fee may then be applied against property damage, if any, when the tenant vacates the property. However, there are specific procedures laid out, under Maryland’s rental property laws, for dealing with security deposits, including:

• Companies involved in rental property management in Baltimore, on behalf of a property owner, may charge up to 2-months rent as security deposit
• If there’s more than $50 held, for a period exceeding 6-months, the amount starts accruing interest
• Under the State’s law, property owners must refund such money, including interest and minus charges for damages, within 45-days of the date of request for refund

To be on the right side of these laws, owners and property managers must provide tenants specific details, in writing, of their rights surrounding the requirement for paying a security deposit, as well as how it will be held, what it might be used for, and how renters can claim for a refund.

5) THE LAW GOVERNING CHANGES TO LOCKS

Because the law does not stipulate rules governing this action, a tenant in Maryland has the right to change locks on their units without prior notice or permission of the landlord. However, those laws do explicitly bar landlords from changing locks to a tenant’s unit with the express purpose of “engineering” an eviction.

To force/encourage eviction, the law also forbids landlords and/or property managers from reducing, diminishing, or suspending essential services to a tenant. Such services might include electricity, gas, heat, lighting, water, and other essential furnishings or components of the unit. Laws governing this act, called “constructive eviction” are covered by Article 4, sub-section 9-15 of the Code of Public Local Laws of Baltimore City.

6) THE LAW GOVERNING PETS ON YOUR PROPERTY

This is a very sensitive subject, because there are no specific laws in Maryland governing whether, when, and what pets may be allowed in rental units. Landlords have discretion on whether to allow pets on their premises, however, the courts do expect property owners to provide valid reason for disallowing pets.

Another complication to this aspect of the law, which few newbie landlords or property owners may know about, is that the law distinguishes between “pets” and “Service animals” (also called emotional support animals). If you work with a reputable Baltimore rental property management company, their experts will ensure you comply with the provisions of the FHA, which stipulates the requirement to accommodate pets – but only if a tenant meets specific screening criteria. Further, Maryland’s highest court ruled that pit bulls are dangerous animals, and landlords and tenants are jointly and personally liable for any damage/injury caused by such animals on their property. Even there, a property manager/owner does not have the right to summarily evict a pit bull owner. Due process must follow, including a 14-day notice period. Some Counties, such as Montgomery, have clearly stated the intent and purpose of a “pet deposit”, enabling landlords and property managers to apply a suitable amount – as part of the security deposit – against pet-caused damages to the property.

As you’ll no doubt appreciate, the laws around various facets of rental property management are complex. What makes matters more complicated is the fact that some of these laws don’t follow the “one size fits all” model. There may be local variations to these laws, or subtle amendments that apply to each municipal rental property situation. Owning rental property is a lot less stressful when you have the services of professional rental property management in Baltimore to support you. They have intimate knowledge of all aspects of the rental laws and, in most instances, remain plugged-in to upcoming legislative updates and changes with potential impact on their clients.

There are also a slew of other disclosures that Maryland property laws mandate upon property owners and managers. These include:

• Disclosing the presence of lead-based paints in properties constructed prior to 1978
• The right for tenants to perform an initial (prior to move-in) inspection; and the landlords right to conduct a final (prior to tenant exiting the unit) inspection of the property
• Providing tenants an itemized list of any deductions or charges against their security deposit balances · Mandatory notice to tenants when a property/part of it is on a floodplain

So, what does this mean for you, as a rental property owner?

Well, firstly, it means they worry about legal compliance – so you don’t have to. More importantly though, working within the law requires spending a lot of time and effort on documentation, paperwork and processes and procedure. One reason that many investors opt to own rental property is so they can focus on living their lives while assuring themselves of a regular income stream. Hiring the services of a professional Baltimore rental property management company helps you realize those objectives.