Mary­land’s judges face prob­lem of defin­ing ‘rent’

Evic­tion cases force courts to de­cide if un­paid util­i­ties can force ten­ants’ re­moval

Baltimore Sun - - FRONT PAGE - By Doug Dono­van

It seems like a fairly straight­for­ward ques­tion: What is rent?

But judges across Mary­land who pre­side over evic­tion re­quests are strug­gling with the an­swer.

For decades, land­lords in Mary­land have been able to file failure-to-pay-rent ac­tions that threaten evic­tion not just for delin­quent rent, but also for over­due water bills, util­i­ties and other ex­penses.

But an opin­ion by the state’s high­est court this year is up­end­ing that tra­di­tion by do­ing what Mary­land’s real es­tate statute does not: defin­ing “rent.”

The state Court of Ap­peals con­cluded that rent “de­notes the pe­ri­odic charge for use or oc­cu­pancy of the premises, but not the var­i­ous other pay­ments that the ten­ant may owe to the land­lord from time to time, even if the lease char­ac­ter­izes them as ‘deemed rent’ or ‘ad­di­tional rent.’ ”

The de­ci­sion has drawn dif­fer­ent in­ter­pre­ta­tions from dif­fer­ent judges.

Land­lords say the def­i­ni­tion does not ap­ply to the evic­tion process be­cause the

Court of Ap­peals de­fined rent only for the pur­pose of cal­cu­lat­ing dam­ages for ten­ants who win re­tal­ia­tory evic­tion cases they file against land­lords.

“The ac­tual de­ci­sion of the court does not” rule out failure to pay water bills, util­i­ties or other charges as grounds for evic­tion when judges are de­cid­ing sum­mary eject­ment cases, said Kathy Howard, a lob­by­ist for the Mary­land Multi-Hous­ing As­so­ci­a­tion, a land­lords or­ga­ni­za­tion.

Ad­vo­cates for ten­ants disagree. And in­creas­ingly, judges are sid­ing with their in­ter­pre­ta­tion.

“De­spite what land­lords are say­ing, it’s a sig­nif­i­cant gain for ten­ants,” said Za­far Shah, an at­tor­ney for the Pub­lic Jus­tice Cen­ter.

The cen­ter rep­re­sented Feli­cia Lock­ett in her law­suit against a prop­erty man­age­ment com­pany that at­tempted to evict her, al­legedly in re­tal­i­a­tion for her ad­vo­cacy on be­half of ten­ants of Bris­tol House in Bal­ti­more.

In Lock­ett v. Blue Ocean Bris­tol, Lock­ett ar­gued that her land­lord twice tried to evict her for rais­ing con­cerns about the build­ing’s util­ity billing sys­tem. She won her first claim but lost the sec­ond be­cause her land­lord showed she was not cur­rent on the rent.

She ar­gued that she had paid “the fixed, monthly amount.” The land­lord had la­beled dis­puted util­ity charges as rent.

The Court of Ap­peals sided with Lock­ett, rul­ing that the land­lord could not count the util­ity charges as rent.

Shah, who rep­re­sents ten­ants through­out the re­gion, has seen judges strug­gling with the de­ci­sion.

“I’m see­ing a wide va­ri­ety of in­ter- pre­ta­tions,” he said. “Some judges are say­ing that they’re just not go­ing to con­sider [util­i­ties as rent]. Oth­ers are say­ing they will con­sider your util­ity bill un­der cer­tain cir­cum­stances.”

Mark F. Scurti, chief judge of the civil divison of Bal­ti­more Dis­trict Court, said “judges are in­ter­pret­ing [Lock­ett] in dif­fer­ent ways.” For Scurti, the nar­row def­i­ni­tion of rent in Lock­ett v. Blue Ocean Bris­tol is not re­stricted to re­tal­ia­tory evic­tion cases.

“When I sit in rent court, I’ve in­ter­preted the Lock­ett de­ci­sion not to in­clude water bills” and other ex­penses as rent, Scurti said. “I’ve let the land­lords know that.”

Mary­land Dis­trict Court Chief Judge John P. Mor­ris­sey said the Court of Ap­peals de­ci­sion can rea­son­ably be in­ter­preted dif­fer­ently by dif­fer­ent judges.

“I wouldn’t say there’s con­fu­sion among the judges,” Mor­ris­sey said. “But you could read that [de­ci­sion] as you only limit it to re­tal­ia­tory evic­tions and that’s the def­i­ni­tion of rent, or read it that it ex­tends to failure-to-pay-rent cases.”

Steve Cromwell, a Bal­ti­more land­lord, said more judges are pro­hibit­ing land­lords from us­ing the evic­tion process to seek re­pay­ment of water bills.

He said ten­ants are learn­ing there’s no penalty for fail­ing to pay their water bills, and invit­ing friends and rel­a­tives over to shower and wash clothes.

“I don’t al­low wash­ers and dry­ers in my units,” Cromwell said. “It’s abused.”

Scurti said land­lords can still file small­claims law­suits in Dis­trict Court to col­lect over­due util­ity bills.

Land­lords say small-claims ac­tions are more ex­pen­sive than failure-to-pay-rent pro­ceed­ings and do not pro­vide the type of lever­age that the threat of an evic­tion car­ries.

Other le­gal ac­tions, such as breach-oflease cases, do not give ten­ants the same “right of re­demp­tion” that the evic­tion process guar­an­tees, Howard said.

Ten­ants’ re­demp­tion rights al­low them to “pay and stay” up un­til the mo­ment a sher­iff’s deputy is knock­ing on their door to evict them, Howard said.

“If you file a breach-of-lease ac­tion, there’s no right of re­demp­tion for the ten­ant,” she said. “I think that’s pretty damned harsh. The leg­is­la­ture in­tended for the ten­ant to have the right to pay and stay. Do we want ten­ants to be evicted with­out the right of re­demp­tion be­cause they haven’t paid a water bill?”

Ad­vo­cates for ten­ants say land­lords abuse the process by assess­ing water bills that ten­ants have lit­tle power to dis­pute.

“I can’t tell you how many of my clients have ex­ces­sive water bills,” said Matthew Hill, who heads the Pub­lic Jus­tice Cen­ter’s Hu­manRight to Hous­ing Project. “And they can’t dis­pute them be­cause they’re not the owner.

Land­lords have long pointed to lease lan­guage to ar­gue that util­i­ties are col­lectible as rent.

But leases may run afoul of state rules, such as when the doc­u­ments say ten­ants agree to oc­cupy the prop­erty “as is”— re­gard­less of any vi­o­la­tions of lead paint rules or un­in­hab­it­able con­di­tions.

“The ar­gu­ment that lease lan­guage gov­erns ev­ery­thing is cat­e­gor­i­cally re­jected in Lock­ett,” Shah said. “Cer­tainly courts can re­fer to the lease but not de­fer to the lease. That’s what land­lords are un­able to ac­knowl­edge.”

Ad­vo­cates, land­lords and judges all ex­pect the Gen­eral Assem­bly to ad­dress the is­sue in the 2017 ses­sion.

It’s clear land­lords are ea­ger to re­gain the power to launch evic­tion pro­ceed­ings against ten­ants who fail to pay util­i­ties.

Del. Stephen Laf­ferty, a Bal­ti­more County Demo­crat, in­tro­duced a bill this year that would have re­quired land­lords to dis­close to ten­ants how they cal­cu­late util­i­ties.

Laf­ferty said he in­tro­duced the mea­sure be­cause apart­ment com­plexes charge ten­ants for water and util­i­ties re­gard­less of ac­tual con­sump­tion.

Af­ter the Court of Ap­peals ruled in Lock­ett, Laf­ferty’s bill was amended with­out his knowl­edge by the House En­vi­ron­ment and Trans­porta­tion Com­mit­tee with an out-of-con­text line that would have nul­li­fied the court’s rul­ing: “A land­lord may re­cover pay­ment of an ar­rear­age due for util­i­ties as rent.”

“When I re­al­ized what was added, I had the bill with­drawn on the Sen­ate side,” Laf­ferty said.

Hill said the change to Laf­ferty’s bill “shows how much anx­i­ety the land­lords have about the Lock­ett case.”

Land­lords were un­apolo­getic about the ma­neu­ver.

“When the Lock­ett case came out, that threw some ques­tions out there about whether water and other util­i­ties could be col­lected as rent,” Howard said. “We very quickly got some­one to spon­sor an amend­ment to say that it is col­lectible as rent.”

Hill and Shah worry that the leg­is­la­ture could re­verse Lock­ett. They be­lieve the court’s de­ci­sion is clear enough, and that judges are com­ing to that con­sen­sus.

“Whether we like it or not, it’s go­ing to be an is­sue in An­napo­lis,” Shah said.

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