February 19, 2025
If you’re a landlord or tenant in Maryland, you should be aware of the recently established Maryland Renters’ Rights and Stabilization Act of 2024 (the “Act”), which took effect on October 1, 2024. The Act modifies existing Maryland landlord-tenant regulations, presenting additional requirements for commercial and residential landlords. A breakdown of the key provisions set forth in the Act include the following:
- Establishment of the Office of Tenant and Landlord Affairs & Tenants’ Bill of Rights (for residential leases);
- Update to Security Deposit Requirements (for residential leases);
- Requirement for Tenant’s Exclusive Negotiation Period & Right of First Refusal (for residential leases); and
- Surcharge for Landlord-Tenant Cases (for residential & commercial leases).
Establishment of the Office of Tenant and Landlord Affairs (Residential Leases)
The Act establishes The Office of Tenant and Landlord Affairs (“OLTA) within the Maryland Department of Housing and Community Development. The purpose of OLTA, as stated on House Bill 693 of the Maryland General Assembly, is to “(i) ensure that tenants have access to educational resources to aid in understanding and exercising the tenants’ rights under State law; (ii) provide tenants with information on how to report a violation of their legal rights as tenants and facilitate referrals of reported violations to appropriate enforcement agencies; (iii) provide tenants with information on how to obtain financial counseling; and (iv) ensure that tenants are able to notify appropriate authorities regarding housing discrimination and other unfair or illegal housing practices.” As part of OLTA’s mission, which is to establish more clarity and support to residential tenants, effective January 1, 2025, all residential landlords must include the newly established ‘Maryland Tenants Bill of Rights’ as an addendum to all residential leases, which will summarize residential tenant’s rights and protections under state and federal law.
Security Deposits (Residential Leases)
The Act has updated the security deposit requirement in residential leases by decreasing the maximum security deposit that may be imposed by a landlord from the equivalent to two (2) months cost of rent to one (1) months cost of rent. It is important to note, however, that a landlord may still impose a security deposit in an amount equivalent to up to two months’ rent if “(i) the tenant is eligible and has qualified for utility assistance through the Department of Human Services; (ii) the lease agreement requires that the tenant make payments for utility services directly to the landlord; and (iii) the tenant and landlord agree in writing to the amount of the security deposit.”
Exclusive Negotiation Period & Right of First Refusal (Residential Leases):
Exclusive Negotiation Period: The Act sets forth a new requirement regarding a “tenant’s exclusive negotiation period”, stating that a tenant must be provided an exclusive negotiation period before a residential rental property may be offered for sale to a third-party purchaser (“Tenant’s Exclusive Negotiation Period”). During Tenant’s Exclusive Negotiation Period, which allows the tenant up to thirty (30) days to respond to the landlord, the landlord must notify the tenant of the tenant’s right to purchase the property, and the tenant shall have the right to exclusively negotiate with the landlord for the prospective purchase of the property. In the event the tenant affirmatively declines an offer of sale by the landlord, the landlord will then be free to offer the property for sale to a third-party purchaser.
Right of First Refusal: The Act goes on to state that, under certain circumstances, the landlord may also have to provide the tenant with right of first refusal to purchase the property (“Tenant’s Right of First Refusal”). Tenant’s Right of First Refusal applies when (i) the landlord intends to accept a purchase offer from a third party purchaser for an amount that is at least ten percent (10%) lower than any price offered to the tenant during Tenant’s Exclusive Negotiation Period, or (ii) the landlord, without having offered the property for sale to the public or any third party purchaser, receives an offer from a third party purchaser to purchase the property. The tenant shall have the opportunity to exercise Tenant’s Right of First Refusal within thirty (30) days after receipt of the Landlord’s notice to tenant.
The Act’s provisions establishing Tenant’s Exclusive Negotiation Period and Tenant’s Right of First Refusal do not apply to the following circumstances:
- when the subjected property contains four (4) or more individual units therein;
- transfer of title to a family member of the owner;
- transfer of title to a business entity wholly owned by the owner;
- transfer of title through a court order (including foreclosure, tax sale, sale by court-appointed trustee, etc.);
- transfer by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust;
- transfer of title through a will, trust instrument, or inheritance;
- transfer of bare legal title into a revocable trust, as specified;
- transfer of title to the State or a local government;
- transfer of title in lieu of foreclosure of a mortgage or deed of trust;
- transfer of title through a court order;
- transfer of title through a bankruptcy court order;
- gift transfer of title to a tax-exempt nonprofit organization; or
- transfer of title by a public housing authority.
Surcharge for Landlord-Tenant Cases (Residential & Commercial)
The Act increases the maximum surcharge imposed by the District Court for summary ejectment cases from $8 to $43, and from $18 to $28 for non-summary ejectment cases, as well as $55 to $85 for non-summary ejectment cases in the Circuit Court.
This article provides a non-exhaustive list of the requirements as set forth in the Act. In the event you are a landlord or tenant with any additional questions pertaining to the Act or your specific lease, please feel free to reach out to directly to our office at Liff, Walsh & Simmons.
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Andre Habib is an Associate Attorney at Liff, Walsh & Simmons and a member of the firm’s Real Estate, Business Law, and Commercial Finance practice groups.
If you have questions on this article or another commercial real estate matter, our attorneys are here to help. Please contact Liff, Walsh & Simmons for assistance.
