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Baltimore City “Good Cause” For Lease Non-Renewals & Tenant Holding Over Actions Explained

Table of Contents

  • Prologue. How We Got Here
  • Part One. Why Most Holdover Actions Will Be Prevented By This Bill
  • Part Two. What is Good Cause?
  • Part Three. Landlords Duty To Provide Written Notice For Lease Renewals.
  • Part Four. Written Notice For Good Cause Non-Renewals
  • Part Five. The presumption of offer & acceptance. (Way more important than it sounds)
  • Part Six. Criminal Penalties and Fines for Landlords. 😮
  • Part Seven. This is only temporary. (At least for now).
  • Epilogue. Is Maryland turning into D.C.?

Part Zero: Prologue – How We Got Here

The eviction moratorium in Maryland only applied failure to pay rent actions. So, landlords and landlord-tenant attorney’s such as myself would file tenant holding over actions in order to still be able to evict tenants during the Covid-19 pandemic. Many people saw this a “loop hole” that undermined the spirit of the eviction moratorium. Indeed, landlords have been filing tenant holding over actions as way to evict tenants that were failing to pay rent instead of filing a failure to pay rent action. On June 8, 2021, the Baltimore City Council decided to put an end to this practice, and passed City of Baltimore Ordinance 21.037 Council Bill 21 – 0031 (Hereinafter referred to simply as “Bill”) requiring “good cause” for tenant lease non-renewals, in practice, this will require landlords to have “good cause” for tenant holding over actions. Tenant advocates will use this bill to attack notices that were sent during this time period without “good cause” to defend against tenant holding over actions.

Part One – Most Holdover Actions Will Be Prevented By This Bill, Because Many Landlords Are Now Required To Renew Leases

This bill gives tenants the rights to renew their lease agreements, with few exceptions (which I’ll get into in the next section). Here is the relevant language of the bill:

“Except for good cause…, at least 75 days but not more than 100 days prior to the end of a term lease or periodic tenancy, a landlord shall offer a tenant a reasonable opportunity to renew the lease subject to a reasonable, non-retaliatory increase in the rent or change in lease terms.”

I bolded shall because it’s the operative word here. “Shall” is legalese for “must” (we learn this our first year in law school). This means Baltimore City landlords are required to renew tenant leases unless an exception for good cause applies. This begs the question of our next aptly titled section.

Part Two – What Is Good Cause?

Good thing the Bill lays this out for us as well. For brevity sake, I won’t be typing out the language of the statute verbatim, I will be doing my job as a lawyer and simplifying the legalese.

“Good Cause” for a non-renewal of a lease in Baltimore City Includes:

1. A “Substantial Breach of lease” that the tenant has not cured within 45 days after receiving a notice to correct the breach. The bill explicitly states that failure to pay rent is NOT a substantial breach of lease. It also does not explain what a substantial breach of lease is. So for now, I’ll define it in the same way I do when filing a breach of lease action, a breach that poses a serious threat to the property and/or persons on the property.

2. Landlord wishes to recover possession of the property so it can be used by the landlord, their spouse, parent, child, or grandparent as their primary residence.

3. Landlord seeks to permanently remove the leased premises from the rental market.

4. Landlord seeks to make substantial repairs or renovations that cannot be completed while the property is occupied, and the landlord has already received all necessary permits.

5. The premises is owner-occupied and the landlord leases out a single unit on the premises.

These few exceptions will end up requiring landlords to offer lease renewals in most situations, as the exceptions are rare in the grand scheme of things. It was definitely the intent to prevent landlords from using holdover actions to evict tenants. Nevertheless, one of the above carve outs may apply in your situation.

Part Three – Landlord’s Duty To Provide Tenants Lease Renewals (Part One Re-Examined)

I thought it would be wise to reiterate that Baltimore City landlords now have the affirmative duty to provide tenants with notice of lease renewals (unless good cause exists). And if they do not do this, then they are subject to penalties. Here are the requirements for the notice:

  • Landlord’s offer of lease renewal is on the same terms and conditions as the current lease, subject to a reasonable non-retaliatory rent increase.
  • Notice must be provided by first class-mail with certificate of mailing. Electronic messages are ok if tenant consented to receiving notices by electronic messages in writing.
  • Notice of renewal must be given 75 to 100 days (not any more or any less) before the end of the lease term.

Part Four – Landlord’s Duty To Provide Written Notice For “Good Cause” Non-Renewals

If you are in a situation where one of the specific remedies for good cause does apply in your case, then you must provide the notice in the same manner (same time period and method delivery) as described in the prior section. The landlord must state they are declining to renew the lease and state the reason why, and the reason must correspond with one of the specifically enumerated reasons for good cause I explained in part two. Also, if the reason is a “substantial breach of lease” the landlord must write down the reason.

Part Five – The Presumption of Offer & Acceptance

This just maybe the most important part of the bill. It creates a presumption that an offer and acceptance of a lease renewal has taken place if the landlord has not provided a timely notice of renewal (or non-renewal). In other words, landlords and tenants will be treated as if they renewed the lease on the same terms, even if they never sat down to renew the lease.

Here is the language that creates the presumption:

Except as otherwise provided…there shall be a presumption that the landlord’s offer of a lease renewal is on the same terms and conditions as the current lease and the tenant’s acceptance of that offer.

Here are the exceptions to the presumption:

  1. The landlord provides timely notice declining to renew for good cause.
  2. The tenants fail to respond to a timely notice offering to renew the lease.
  3. The tenant provides the landlord with a notice to now renew the lease.

What landlords should take away from this is that whether they plan to renew the lease or to not renew the lease, they should still provide the timely notice. A landlords practice in the past may have been to provide their tenants with notices of a rent increase 60 days prior to the renewal date. If a landlord does that, then the notice is deficient because they were outside of the 75 – 100 day period so they run afoul of the rule here. So even landlords that plan on not evicting their tenants have additional requirements imposed on them by this rule.

Part Six – Criminal Penalties & For Landlords 😮

Landlords that violate this bill are subject to a misdemeanor and upon conviction, a fine of up to $1000. Although a misdemeanor is a less serious crime than a felony, it is a crime nonetheless. Landlord’s would be wise to follow the bill.

Part Seven – This Is Only Temporary (At Least For Now)

The bill is set to self-destruct 181 day after the expiration of the catastrophic health emergency declared by the Governor of Maryland.

So, sometime in the future this bill will no longer apply and landlords will be able to not renew leases for any reason. Or Will they?

Epilogue – Will Maryland turn into D.C. In The Future?

While this bill may seem ground-breaking in the State of Maryland, it isn’t breaking any new ground. I’ve seen this before because I am also licensed to practice law in Washington, D.C. In D.C., there is no such thing as a holdover action and they have 10 enumerated reasons for situations in which landlords are allowed to pursue an eviction. An example of one of the reasons is landlord seeks to occupy the property for their own personal use. Another is the landlord seeks to renovate the premises and the tenant cannot safely occupy the property. Another is that the landlord seeks to stop renting the property permanently. All of these reasons sound suspiciously similar to the reasons done by the Council. They are simply borrowing language from the District of Columbia and other more “tenant-friendly” jurisdictions

I believe that this is the first step in Maryland becoming more like D.C. and coming up with its own specifically enumerated reasons for evictions in the future. Particularly as the housing-crisis gets worse due to the pandemic or whatever else the future may hold

Brian
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Brian

Real Estate Attorney at The Pendergraft Firm LLC
Brian Pendergraft is a general real estate attorney.Click here to schedule a consultation.
Brian
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