Should a Tenant Pay Rent to an Unlicensed Montgomery County Landlord?
A Montgomery County residential tenant should generally not pay rent to an unlicensed Montgomery County landlord, and a Montgomery County landlord may not attempt to collect unpaid rent for an unlicensed period, even if the landlord later gets a license. Under Maryland law, a landlord who rents an unlicensed property to a residential tenant in a county or city that requires a rental license, such as Montgomery County, violates the Maryland Consumer Protection Act, although whether the tenant is able to successfully sue the unlicensed landlord is a somewhat complicated question. A tenant should make certain that a landlord is not licensed and seek legal advice from an attorney before stopping rent payments, as individual circumstances could differ.
The Maryland Court of Appeals (Maryland’s high court) has ruled that:
- If an unlicensed rental property was in good condition and the tenant voluntarily paid rent to an unlicensed landlord without any collection efforts by the landlord, the tenant cannot sue to get those rent payments back. However, if the unlicensed property was in disrepair, the tenant may have a cause of action for damages, including potentially partial or full repayment of rental payments.
- Regardless of the condition of the unlicensed rental property, if the tenant does not pay rent for any unlicensed period, any efforts to collect such rent, regardless of whether the landlord has subsequently obtained a license, is prohibited under the Maryland Consumer Debt Collection Act.
Prohibited collection activities include:
- Providing late notices;
- Charging late fees;
- Sending letters, making phone calls, sending texts or otherwise asking for payment;
- Reporting a debt to credit reporting agencies; and
- Filing a collection lawsuit or an action seeking to evict the tenant for unpaid rent.
Note that filing a tenant holding over action seeking to evict a tenant who doesn’t leave after the expiration of a lease is not a prohibited collection action.
Montgomery County Requires that All Residential Rental Properties be Licensed
Section 29-16of the Montgomery County Code states that “The owner of a dwelling unit must obtain a rental housing license before operating the dwelling unit as rental housing.”
How To Find Out If a Montgomery County Rental Property is Licensed?
Montgomery County provides a searchable database of licensed rental properties that you can access by clicking here.
What Should a Montgomery County Residential Tenant Do If an Unlicensed Landlord Is Attempting to Collect Unpaid Rent?
A Montgomery County landlord violates the Maryland Consumer Debt Collection Act by attempting to collect unpaid rent for any unlicensed period, even if the landlord later gets a license. The Maryland Consumer Debt Collection Act provides a private cause of action for damages, and a court may award a prevailing tenant their reasonable attorney’s fees, meaning that it may be possible to get representation without having to pay any upfront fees. A tenant should also check their credit reports to see if a landlord is reporting any unpaid rent for an unlicensed period, which, as of this writing, a tenant can still do once a week for each of the three major credit reporting agencies for free through www.annualcreditreport.com. For a guide on how to check your credit reports, click here, and if you find any reporting of unpaid rent for unlicensed periods, please fill out the form below. If you find any other inaccurate information in your credit reports, click here for more information on the Fair Credit Reporting Act.
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