At Ben Frederick Realty, we believe it’s important to keep you up to date on legislative changes that concern landlords and tenants. Today, we’ll take a look at four law updates for summer 2021, and what you may need to know about them. We also created a companion video to this piece which can be viewed here.
Baltimore City Legislation
Fiirst, let’s discuss Baltimore City legislation that went into effect Tuesday, July 20th, and stays in place until January 1, 2022.
City Council Bill 21-0031, is titled “Landlord-Tenant – Lease Renewals”. It requires landlords to offer tenants the opportunity to renew their lease agreement, providing only 4 exceptions where a landlord can choose not to renew a lease at the end of its term. Before last Tuesday, a landlord had the right to not renew a lease at the end of its term for any reason, as long as the landlord wasn’t violating fair housing laws. Now, and through 181 days from the Governor lifting the State of Emergency, landlords must follow a new procedure in order to get the property back at the end of a lease term.
Landlords may now only cancel renewal for a substantial breach of the lease. The City Council states that substantial breaches are things like: pets on the premises that are not included in the lease, drug dealing, large parties/gatherings, damage to the rental unit, and more people living there than allowed on the lease. If a substantial breach has occurred, you must specify exactly what the breach is and provide the tenant with 45 days to correct the breach. If the tenant fails to cure the breach, only then may a landlord refuse to offer a lease renewal. This new law specifically states that failure to pay rent is not a substantial breach of the lease.
Outside of these substantial breaches, there are four other reasons a landlord may offer to not extend the lease.
- As a landlord, you will be moving yourself into the property as your primary residence, or primary residence for your child, spouse, parent or grandparent. This does not extend to any other family members but only those mentioned. For example, it does not apply to a desire to rent to family members such as cousins, or in-laws
- As a landlord, you are permanently removing the rental unit from the market. This means the unit will sit vacant and not be re-rented. Putting the property on the market for sale also counts as permanently removing the property from the rental market.
- As a landlord, you plan on making substantial repairs or renovations that cannot occur while the unit is occupied. All work must be properly permitted with the City.
- As a landlord, you live in one unit and are renting out a single unit on a property of any size, you can give notice to the other resident to leave.
Renewals must go out at least 75 days, but no more than 100 days, prior to the end of the lease term. If you have any tenants in breach, or any units that meet the “good cause” criteria, we suggest you mark your calendars for the “window” of time wherein the non-renewal can go out. Remember, non-renewals should be sent via First Class Mail with certificate of mailing and also certified mail.
State Level Bills
There are three new state level bills that we need to discuss next:
House Bill 18 requires a landlord to provide formal notice to tenants before filing a “failure to pay rent notice” in Rent Court.
Senate Bill 401 changes the number of days for notice required to terminate a lease.
House Bill 861 which addresses reusable tenant screening reports.
House Bill 18
First, we’ll dive into House Bill 18 on notice for filing failure to pay rent and access to counsel.
Effective October 1, a landlord must provide written notice to a tenant of their intent to file a failure to pay rent case in Rent Court at least ten days before filing the case in Rent Court. The tenant has the opportunity to cure the default by paying the rent within this ten day period. The District Court will publish a sample notice form on its website. With the tenants’ consent, the notice may also be sent via email, text, or by other electronic means.
We are advising our clients to review their lease forms to see if the current lease has a provision where the tenant consents to receive notices from the landlord by electronic means. If your lease does not include this provision, we are advising our clients to add such a provision at the next lease renewal.
The second suggestion we offer to our clients is to get in the habit of automatically sending all tenants a notice of how much rent is due on the first of the month and that the landlord intends to file a Failure to Pay Rent case in District Court if the Rent is not received by the 10th day after the notice.
The second part of this bill says that certain individuals may be eligible for an eviction defense program. However, legal representation through this program is subject to funding, and the funding bill failed to pass. So, we advise that all new leases contain language providing tenants with information about where they can get legal help in a landlord-tenant court case.
Senate Bill 401
Next, Senate Bill 401 speaks on notice of nonrenewal timeline requirements.
This law extends the notice period for lease non-renewals. For month-to-month leases, both the landlord and the tenant must now give 60 days’ notice to terminate a lease. For year-to-year notices, the landlord and tenant must give each other 90 days’ notice in order to terminate a lease.
For landlords, we recommend reviewing your lease agreements and changing the notice requirements from 30-days or 60-days to the new time frame of 60-days for a month-to-month lease and 90-days notice for a year-to-year lease agreement.
House Bill 861
Third, House Bill 861 addresses reusable tenant screening reports.
Reusable tenant screening reports have become more common with sites like Zillow and Trulia, where a tenant can complete an application through these sites and send it to multiple landlords when they inquire on their properties.
This law first defines a reusable tenant screening report as: a report prepared within the previous 30 days by a consumer reporting agency, at the expense of the tenant, and containing a credit report, criminal and eviction history, verification of income, and current address and rental history.
A landlord that accepts reusable reports cannot charge any additional application fees. They can require the tenant to certify that there have been no material changes since the report was generated.
A landlord that declines reusable reports must provide notice that they do not accept these reports. Notice can be posted on the rental listing itself, on the homepage of their website, in the online rental application, or other reasonable notices to potential tenants.
I like the reusable tenant screening reports. In particular, Zillow applications are easy and quick for the tenants to complete, and they often send us their reports prior to seeing an apartment so we can determine if they meet basic requirements. This saves both parties time by avoiding showings for unqualified tenants.
However, if you do not like reusable reports, be sure to change your rental application form and add a notice on your website and/or advertising material that you do not accept resusable reports.
This concludes our law updates for summer 2021. We hope you found this information useful. If you’re ready to get started on your property investment journey, or expand your current portfolio, please take a look at the current listings the Ben Frederick Realty team has on offer.