Montgomery County Finds Way to Handle Delinquent Landlords

Date: May 13, 2015

By: Tiffany M. Releford, Esq.

In Montgomery County, Maryland, owners who want to rent their homes must obtain a residential rental license from the County.  It is a Class A violation of the County Code for an owner to rent without a rental license, which could result in a fine of up to $500 per day.  More often than not, owners are renting their homes and deriving an income from the rental while at the same time failing to pay homeowners, condominium or cooperative fees to the community association.  However, the County is attempting to stop this practice.  

Effective June 12, 2015, Montgomery County has a new law that authorizes the Licensing and Registration Office of the Department of Housing and Community Affairs to deny, suspend, revoke, or refuse to renew a rental housing license for a dwelling unit in a common ownership community if the owner fails to pay the common ownership community fees for the unit.  This means that owners in a homeowners association, condominium or cooperative who rent their homes may be prevented from doing so if the owner is more than 30 days past due in payment of a common ownership community fee.  The law defines “common ownership community fees” as fees charged by the association for services or the benefit of common areas in the community.  

In order to obtain a rental license, the owner must certify that the owner is current on payment of common ownership community fees.  The law authorizes associations to charge a fee to certify that the common ownership fees for a home have been paid, but the fee may not exceed $25.00.  In addition, the association may submit proof to the enforcing agency that an owner has unpaid common ownership community fees.  This can be done by producing a recorded statement of lien or an unsatisfied judgment against the owner. 

This new law does not mean associations who currently use lease addendums to collect rent from tenants of delinquent owners should discard those practices.  Instead, we recommend the association continue to use lease addendums and this new law to make sure landlords pay common ownership community fees.