Now You Know: Making Rent More Expensive

Over the last few years, a multitude of bills have been passed in Annapolis regarding rental properties and landlord and tenant issues.

Many small, mom-and-pop landlords have been pushed out of the business because lawmakers have made it difficult to own rental properties. Of course, no one supports slumlords, but lawmakers in Annapolis have made it difficult to pay the expenses of owning a rental property and even harder to make a profit.

There is a push for more affordable housing, but increased regulations on housing in Maryland make it more expensive to rent or own property. “Affordable housing” is a popular feel-good political phrase, but government intervention is making rental properties less affordable.

Here is a summary of some of the bills the House of Delegates passed this legislative session. Thankfully, not all of them became law, as the Senate did not pass all of them.

Perhaps the worst housing bill the House passed this year was HB477, sometimes referred to as Just Cause Eviction. The only thing “just” about this law is its title.

This bill provides tenants with a life occupancy in a property. Under current law, landlords and tenants may decide to renew or not renew a lease at the end of the term. In some cases, landlords don’t renew leases for very good reasons, like tenants that are a nuisance to the community or may not live up to the cleanliness standards that most would expect.

Or, landlords may want to have a family member or friend to live in the property. In this legislation, a landlord would have to go through a quasi-eviction process if they do not want to renew a tenant’s lease, essentially limiting property rights.

There are a few housing markets in the country that have this type of legislation in effect, such as San Francisco and Oakland, which have some of the worst housing crises in the country due to policies like this. This policy completely disincentives the private sector from investing in new multi-housing units in these communities.

Thankfully, this bill did not become law.

Another bill, HB693, unfortunately, did become law. This bill creates a new office for tenants to encourage them to take legal action against landlords.

In addition, the bill also requires a landlord to offer tenants the right of first refusal when the landlord decides to sell a residential property. The bill significantly increased filing fees and surcharges a landlord pays to file actions against a tenant, such as when someone doesn’t pay their rent.

As it left the House, the bill prohibited these charges from being awarded to the landlord if the case was resolved in the landlord’s favor.

Another bad bill is HB1117, which will create an entirely new process for renters to put their rent in escrow until a landlord remediates property defects. While no one wants people living with severe defects in their homes, this bill goes much further than that. It expands a renter’s ability to withhold rent for reasons unrelated to property defects, which could potentially put a significant financial burden on landlords as they have mortgages, taxes, and insurance to pay as they work through the court process.

This bill will make it harder to repair units and allow tenants to seek damages for things that have nothing to do with defects in a unit. This complicated government scheme is another reason people will get out of the rental property business in Maryland.

Another bill, SB 19, requires the District Court to shield all related court records within 60 days after the final resolution of a failure to pay rent proceeding that did not result in a judgment of possession. The District Court may, on motion of a tenant and if specified requirements are met, shield all court records relating to a failure to pay rent proceeding that results in a judgment of possession.

In Maryland, the average eviction process takes many months. During this period of months, a tenant may make payments to become current in their rent and stop the eviction proceedings.

However, it doesn’t mean that the tenant hasn’t missed or been late on their rent payments. With these records now shielded, future landlords will not know a future tenant’s payment history, even if the tenant was habitually late and often in court for failure to pay rent.

We all recognize that there is a need for more quality and affordable housing.

However, the approach of penalizing all landlords to punish a few does nothing to solve this housing problem and in fact will make it worse. Instead, we need to focus on incentivizing quality housing construction and focus on holding bad landlords and bad tenants accountable.

The approach of simply attacking all landlords does nothing to solve this housing problem and instead just further exacerbates the crisis.

The views expressed in this column reflect the opinions and research of the authors and not necessarily those of The Avenue’s editorial staff.

”Now You Know” is a weekly column written by state delegates Ryan Nawrocki and Kathy Szeliga.