Baltimore City Rent Escrow Law

Baltimore City Rent Escrow Law

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Rent Escrow in Baltimore City

When a landlord delays unreasonably or refuses to repair a condition which threatens the life, health or safety of the tenant, the Rent Escrow law provides several remedies, including the payment of rent into court so that the accumulated funds may be used to pay for repairs.

Originally, the escrow procedure could only be used defensively by tenant when the landlord sought to evict him for non-payment of rent. Under current law, tenant himself may initiate the proceeding. This may relieve tenant of the psychological handicap of defending an eviction proceeding. Following is a summary of the provisions of this law.

The Rent Escrow law is intended to protect the life, health and safety of tenants, and is not to be used to have the dwelling redecorated or for the correction of minor code violations. It is not to be used by either tenant or landlord as a means of harassment.

In order for tenant to benefit as intended by this law, certain conditions must be met and a detailed procedure followed:
The condition complained of must exist on the leased premises or in the common areas. The condition must constitute, or if not promptly corrected will constitute, a fire hazard or a serious threat to the life, health or safety of the tenants. Examples of such conditions are: a) lack of heat, light, electricity, or adequate sewage disposal facilities; b) lack of hot or cold running water (except where tenant pays for water and the lack of water is a result of his failure to pay the water charge); c) presence of rats or mice (except in one-family dwellings); d) presence of lead paint on interior surfaces, where it would be a violation of the Baltimore City Code, and provided the landlord has notice of the lead painted surfaces.

The assertion of a dangerous condition, as described above, may be the basis of an action initiated by tenant for correction of the condition, or may be used by tenant as a defense to an action brought by landlord to recover rent or to recover possession of the premises for non-payment of rent.

Tenant's assertion, whether it is the basis for an action brought by tenant or is tenant's defense to an action brought by landlord, is dependent upon the following: a) Before the beginning of the action, landlord or landlord's agent received notice of the defective condition by one of the following: a letter sent by certified mail return receipt (Tenant should keep a copy of the letter and the return receipt.), or a violation or condemnation notice from the Department of Housing and Community Development or other appropriate agency actual notice; b) Landlord has refused or failed to remedy the condition within a reasonable time. What is a reasonable time is left to the discretion of the court, but a delay beyond 30 days after receiving notice is presumed to be beyond a reasonable time. The presumption may be rebutted; c) Tenant pays into the court the amount of rent due under the lease, unless or until that amount is modified by court order; d) Tenant has not had more than 5 judgments of restitution for rent due and unpaid in the year immediately prior to initiation of the action by the tenant or by the landlord. If the tenant has lives on the premises six months or less and the court has entered against the tenant three judgments of restrictions for the rent due and unpaid, the tenant shall not be entitled to make an assertion against the landlord as described in subsection "b" of this paragraph.

The landlord will prevail if he can establish one of the following
a) He did not receive proper notice; b) the condition complained of by tenant does not exist; c) the condition has been remedied; d) the condition was caused by the tenant, a member of his family, or by his or their invitee or assignee; or e) tenant has unreasonably refused entry, or has unreasonably failed to arrange to be home for entry of landlord or his agent to make repairs.

At the conclusion of the hearing
The court may make any order that the justice of the case requires. Such an order may include but is not limited to one or more of the following: a) the lease is to terminated and the premises surrendered to the landlord; b) all rent money already paid into court shall be released to the tenant or to the landlord in accordance with d., e., or as explained below; c) the tenant is to continue to pay rent into the escrow account until the complained of condition is remedied; d) the rent is reduced to an amount that fairly represents the condition of the premises. In all cases where the court decides that the tenant is entitled to relief under this Rent Escrow Law, the landlord has the burden of showing why the rent should not be reduced; e) the money accumulated in escrow is to be released to the tenant, or to the landlord, or to a contractor chosen by the landlord, in order to remedy the condition. Whichever option is chosen, the court must ensure that the money is used to make the repairs; f) the matter is referred to a municipal or State agency for investigation and report, and tenant will pay into court any rent due during that time; g) the escrow funds are to be used to pay a mortgage on the property to prevent foreclosure; or h) landlord must correct the defective condition.

Where an escrow account is established by the court
If the landlord does not make a reasonable effort to remedy the hazardous conditions within 6 months thereafter, all money accumulated in the account shall be given to the tenant. The escrow will continue, beginning upon a new 6-month period with the same conditions as before.

The initial hearing of a rent escrow case must be held within 15 calendar days of notice by the court to the parties, except that the court may order an earlier hearing where tenant alleges emergency conditions, such as lack of heat in winter, lack of adequate sewage facilities, or any other immediate threat to the health or safety of the occupants.

The court, either on its own motion or on motion of landlord or tenant, may order additional hearings in the case to determine further the rights and obligations of the parties. Distribution of the escrow money can take place only by order of the court after a hearing where both tenant and landlord were given reasonable notice, or by agreement of both tenant and landlord, or upon certification by a housing inspector that the work required to be done has been satisfactorily completed.

Whenever a hearing is required in the course of determination of the case, the court must notify all persons required to be notified by certified mail (return receipt), stating the date, time, and purpose of the hearing. Refusal or unreasonable delay by a party in accepting the notice will not prevent any remedy to which the other party is entitled.

Following a determination of the merits of the case
The tenant is protected from a rent increase, eviction, or a decrease in services which the landlord is legally required to provide, unless the court finds that the tenant made his complaint or defense not "in good faith" or that the landlord has "good cause" to evict or raise the rent. For the first 6 months, landlord has the burden of proof of tenant's lack of good faith or landlord's good cause to evict. After the 6-month period, the burden of proof is on tenant.

To make a complaint or defense "in good faith" the tenant need not win the case. He need only have a reasonable expectation that he would be successful.

"Good cause" for the landlord to evict tenant or raise the rent must include a finding of one of the following
1) The condition which was the basis of tenant's complaint or defense was caused by an act or omission of tenant or a member of his family or their invitee or assignee, and was more than ordinary wear and tear; 2) Landlord wants in good faith to regain possession of the property so that he himself can immediately live there; 3) Landlord has contracted in good faith and in writing to sell the property and the purchaser plans to live there himself immediately; 4) Landlord has experienced a substantial increase in taxes or a substantial increase in operating costs unrelated to the condition asserted under this law; 5) Landlord has made a substantial capital improvement to the premises, unrelated to the condition asserted under this law, and the improvement benefits the leased premises. The protection from an increase in rent, decrease in services, or eviction, also applies to a tenant who in good faith reports a possible housing code violation to a state or municipal agency, even if the tenant does not intend to use rent escrow procedures. In such case, the landlord is to be restrained from increasing the rent for a maximum of 6 months after determination of the case.

This portion of the law does not affect tenant's or landlord's right to terminate a written lease for one year or longer in accordance with the provisions of the lease; but the terms of the lease may not be used to defeat the intent and the provisions of the law.

If landlord intends in good faith to raze or board up the premises and intends to obtain a permit to do so, he may give the tenant a 60-day written notice to terminate the tenancy.

Any attempt to waive any provision of this law which benefits a tenant or occupant of a dwelling is against public policy and void.

This law applies also to residential property leased by a municipal or State agency.

(Public Local Laws of Baltimore City, Sec. 9-9)

Source: Baltimore Neighborhoods (BNI) - See main Landlord Tenant section for more information on BNI. Updated by the Maryland State Law Library (MSLL).

Last date legally reviewed: 10/29/08 (PLL/M.A.J.)