Maryland Rent Control Laws in 2024

Introduction to Maryland’s Rent Control Laws

Rent control has a long history in Maryland. In the 1970s, Prince George's and Montgomery counties enacted the first local rent stabilization policies to address rapidly rising housing costs. These county-level policies placed limits on how much landlords could increase rents annually. 

Several other local jurisdictions in Maryland followed suit over the years. However, there was no statewide rent control law until 2020. That year, the Maryland General Assembly passed the Rent Stabilization Act, which established the first statewide system of rent control.

The Maryland Rent Stabilization Act, which went into effect in 2021, limits rent increases on certain multi-family rental properties with 50 or more units. The law caps annual rent increases to the lesser of the Consumer Price Index for Urban Consumers (CPI-U) plus 3% or 6% maximum for properties covered under the policy. This statewide rent stabilization law aims to protect tenants from excessive rent increases while still allowing landlords reasonable increases.

The law also prohibits landlords from raising rents excessively between tenant leases. Additional tenant protections include restrictions on fees charged in addition to rent. The statewide rent stabilization system represents a major step forward in providing rent control and tenant protections across Maryland.

Properties Covered by Rent Stabilization

Maryland's statewide rent stabilization law applies to rental properties with 50 or more units. This includes apartments, condos, townhomes, and other rental housing with 50+ units on the property. 

The rent stabilization law does not apply to single family homes, condos, townhomes, duplexes, or other small properties with less than 50 units. New construction is also exempt - any rental property built within the last 15 years does not fall under rent stabilization mandates. 

Additionally, vacant units are exempt from rent stabilization until they are leased again by a new tenant. Once re-occupied, the unit becomes subject to rent control regulations.

In summary, rent stabilization in Maryland covers larger multi-unit rental properties, while exempting smaller buildings, new construction, and vacant units. This balances tenant protections for large apartment communities with flexibility for smaller landlords and new development.

Limits on Rent Increases 

Maryland's statewide rent stabilization law places limits on how much landlords can raise rents each year. For properties covered by rent stabilization, landlords can only raise rents by the lesser of two caps:

  • CPI-U + 3% 
  • 6%

CPI-U refers to the Consumer Price Index for All Urban Consumers, which is a measure of inflation calculated by the U.S. Bureau of Labor Statistics. By tying rent increases to CPI-U, the law allows rents to increase modestly in line with overall inflation in the economy. The two caps prevent landlords from raising rents excessively even if inflation spikes in a given year.

For example, if CPI-U for the prior calendar year was 2%, landlords could only raise rents by 5% (2% + 3%) because that is less than the 6% cap. If CPI-U was 4%, then the 6% cap would apply since it is lower than 4% + 3%.

This system balances the need for landlords to keep pace with costs while protecting tenants from price gouging. Rents can increase each year, just not by unlimited amounts.

Properties designated as "troubled" or "at risk" have lower caps on rent increases. For these buildings, rents may only be raised by CPI-U + 6% annually. This policy aims to improve housing quality by limiting increases on properties in poor condition.

Capital Improvements and Rent Surcharges 

Landlords can petition to pass through the costs of major capital improvements to tenants in the form of rent surcharges. This allows owners to upgrade and improve properties without taking on the full cost burden themselves.

To implement a rent surcharge for capital improvements, the landlord must formally request approval and submit evidence to document the costs. Qualifying improvements generally include major upgrades like replacing roofs, plumbing, HVAC systems, or renovating building exteriors. Normal maintenance and minor repairs do not qualify. 

The costs to be passed on must directly enhance the property, prolong its useful life, or add new amenities. The landlord must itemize all expenses and spread the costs reasonably across units based on size, amenities, or other factors. 

If approved, the landlord can collect a surcharge on top of the regular rent increase permitted by law. The surcharge is temporary and must be discontinued after an established time period to fully recover the costs.

Tenants must receive written notice explaining any approved capital improvement surcharges. The notice should spell out the amount of the surcharge, duration, and the upgrades performed. Tenants have an opportunity to submit comments or objections to the housing oversight agency.

Limits on Fees Charged to Tenants

In addition to limiting rent increases, Maryland's rent stabilization law also places caps on the amount and types of fees that landlords can charge tenants. This is an important protection, as excessive or improper fees are one way landlords could otherwise get around rent control.

Under the law, any fees charged to tenants must be reasonable and associated with actual costs incurred by the landlord. Fees cannot be imposed arbitrarily or simply as a way to generate more revenue from tenants.

Landlords are required to provide documentation and justification for any fees charged. This includes fees like:

  • Application fees for new tenants
  • Pet fees or pet rent
  • Parking fees
  • Fees for access to amenities like a pool or gym
  • Maintenance fees
  • Fees to obtain rental records  

Tenants have a right to challenge any fees that seem excessive, unjustified, or used to skirt around rent stabilization. The fees charged must align with the actual costs borne by the landlord.

If a landlord imposes unreasonable or undocumented fees as a way to effectively raise the rent beyond legal limits, tenants can report this violation to local authorities. The rent stabilization law prohibits landlords from using fees as a loophole to get around rent control.

Tenant Rights and Protections

Maryland has enacted laws to protect tenants from harassment, discrimination, and retaliation by landlords. Some key rights for renters include:

Protections Against Retaliation

Landlords are prohibited from taking punitive actions against tenants who exercise their rights, such as complaining about housing conditions or reporting violations. Examples of illegal retaliation include:

  • Raising the rent excessively 
  • Terminating a lease early
  • Refusing to make needed repairs
  • Harassing or threatening the tenant

If a tenant believes they are experiencing retaliation, they should document all incidents and interactions. This evidence can be used to file a complaint or lawsuit against the landlord.

Reasons a Tenant Can Be Evicted

Maryland law limits the valid reasons a landlord can evict or refuse to renew a tenant's lease. Permissible causes for eviction include:

  • Failure to pay rent
  • Violating the lease terms 
  • Damaging the property 
  • Engaging in criminal activity
  • Refusing to vacate after being given proper notice

Landlords must provide tenants with written notice before starting the eviction process. Tenants have the right to challenge any evictions they believe are retaliatory or lack proper justification.

Obligations for Landlords 

Landlords in Maryland have certain obligations under rent control laws aimed at providing oversight and transparency. One of the key requirements is that landlords must register covered rental properties annually. When registering, landlords need to report important details including the current rents charged and any planned rent increases for the coming year. 

The registration process was implemented so local governments can track rental rates and make sure landlords are complying with rent stabilization policies. It also gives tenants insight into whether planned increases follow the legal limits. Landlords who fail to properly register their properties or provide inaccurate information can face fines and other penalties. The registration system combined with the prohibition on retaliating against tenants who file complaints are important for the enforcement of rent control laws.

Fair Return Petitions

Landlords in Maryland have the option of filing a Fair Return Petition if they believe the statewide rent stabilization law prevents them from earning a fair return on their investment in a property. This petition process allows landlords to seek an exception to the rent increase limits imposed by rent stabilization.

To file a Fair Return Petition, a landlord must open up their financial books to the local rent board or housing agency overseeing rent stabilization. The landlord must clearly demonstrate that the rent stabilization law's limit on rent increases prevents them from earning a reasonable profit on the property. 

Factors considered in a Fair Return Petition include:

  • The landlord's net operating income from the property 
  • Documented capital improvements and operating expenses
  • The maximum allowable rent increase under the rent stabilization law
  • The original purchase price and financing terms for the property
  • A fair rate of return based on the property's value

The rent board or agency will review the evidence and financial documentation closely. If the landlord can prove the inability to earn a fair return under the rent limits, an exception may be granted. This allows the landlord to raise rents more than the typical allowable increase.

However, exceptions are not guaranteed. The rent board must be convinced the limit on increases truly deprives the owner of a fair return. If the landlord is already earning a reasonable profit, the petition may be denied.

Tenants have an opportunity to participate in the process by reviewing the landlord's financial documentation and challenging any aspects. Most rent boards allow tenant participation and transparency as they consider Fair Return Petitions.

The goal of the Fair Return Petition process is to balance the rights of landlords and tenants. It provides a safety valve for landlords who can legitimately show the rent limits prevent a fair return. This exception prevents unconstitutional "takings" while still upholding rent stabilization protections for tenants.

Enforcement and Oversight

Maryland's rent stabilization law and tenant protection policies are overseen by several state and local agencies. At the state level, the Department of Housing and Community Development has a Rent Stabilization Unit that monitors compliance and investigates complaints. This unit works with local governments to enforce the law. 

Many counties and cities in Maryland have agencies that handle rent control locally. For example, Montgomery County has an Office of Landlord-Tenant Affairs that administers the county's rent stabilization program. Prince George's County has a similar agency. These local offices license rental properties, handle registrations, and field complaints.

If tenants believe their landlord is violating rent control limits or tenant protection laws, they should report it. In most cases, complaints should be filed with the local agency overseeing landlord-tenant issues and rent stabilization. Many local agencies provide complaint forms and hotlines. 

Tenants can also seek assistance from legal aid organizations. Groups like the Public Justice Center have attorneys to help renters understand their rights and options. They may be able to negotiate with landlords or represent tenants in housing court if landlords ignore the law.

Rent stabilization and tenant protection only work when there is proper oversight and enforcement. Responsible landlords follow the rules, but some try to skirt limits on rent increases and fees. By reporting violations, tenants play a crucial role in holding landlords accountable.

Frequently Asked Questions

What is the maximum rent increase allowed in Maryland?

There is no maximum percentage for rent increases in Maryland. However, rent increases are limited based on inflation and property type under the statewide rent stabilization law. For units covered by rent stabilization, increases are capped at the lesser of CPI-U + 3% or 6% annually.

What can a landlord not do in Maryland?

Landlords in Maryland cannot raise rents excessively, charge unreasonable fees not outlined in the lease, or retaliate against tenants who assert their rights under rent control laws.  

What's the most my landlord can raise my rent?

For properties covered by Maryland's statewide rent stabilization law, the maximum allowable annual rent increase is the lesser of CPI-U + 3% or 6%. For other rental properties not covered by rent stabilization, landlords must follow standard landlord-tenant law, which prohibits excessive rent increases but does not define a maximum percentage.  

Is Maryland a tenant friendly state?

Yes, Maryland has passed progressive rent control and stabilization laws designed to protect tenants from excessive rent increases. The statewide rent stabilization law limits annual increases for covered units. However, landlords in Maryland still have rights too under the law. Overall, Maryland strikes a balance between tenant protections and property owner rights.

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