Study Highlights Problem of Baltimore Rental Housing

In December, the Abell Foundation published the results of a year-long study conducted by the Public Justice Center and Right to Housing Alliance that revealed Baltimore City’s eviction rate is among the highest in the country. Every year, up to 7,000 Baltimore families are evicted from their homes, due to non-payment of rent. These evictions typically involve low-income families. Researchers conducting the study found many of the people evicted had withheld rent because their landlords wouldn’t correct significant defects. Displaced tenants were likely unaware that Baltimore has a local law similar to Maryland’s Rent Escrow law, which might have given them a legal remedy for their maintenance concerns. It seems that some Baltimore landlords may be operating run-down properties and ignoring tenants until the rent check is late, and then moving swiftly to take legal action in order to collect rent. The study on this issue has brought this problem to light, and as a result, landlords may end up facing more scrutiny about their business practices.

Income and Rent

Between 2001 and 2012, median rents nationwide rose 4 percent, while renters’ median income dropped 13 percent. This gap between wages and rent costs is increasing in large cities such as Baltimore, where competition is high for available housing. The Public Justice Center reports that 53 percent of Baltimore renters are living in homes they can’t really afford and paying more than 30 percent of their income in rent because they couldn’t find a more affordable place to live. Some economists say that the long-accepted rule that tenants should pay no more than 30 percent of their income in rent is meaningless, because the rule doesn’t account for individual variables. For example, a single person with no children and no debt may be able to comfortably pay up to 40 percent of her income in rent, whereas a single mother who has two children and chronic health problems might have considerable difficulty paying 30 percent of her income in rent.

Tenants Take Action

In May 2015, three Baltimore tenants filed a class action lawsuit against a property management company for “fee churning” – charging fees prohibited by Maryland law and excessive and unpredictable fees that caused tenants to be unable to catch up on delinquencies. The suit alleges the company deliberately understated to tenants what they owed in late fees, so management could charge additional fees when tenants paid the incorrect amount. Maryland law requires landlords to refund any portion of an application fee not used for processing of that application. The class action suit alleges the property manager charged tenants a $40 application fee but didn’t use the entire fee for the application. Tenants also claimed management misapplied rent funds and forced them to pay for repairs to their dwellings.

Lessons for Landlords

If it’s true that Baltimore City landlords have been engaging in illegal business practices, those truths will likely be uncovered soon. For scrupulous landlords in the City and throughout Maryland, there are lessons to be learned from a flawed arrangement that lands many tenants and landlords in Baltimore Rent Court. One of those lessons is that using the 30-percent threshold as a determination of whether someone can afford rent might be a big risk. And another lesson is that landlords who fail to uphold their legal responsibilities to tenants could end up the subject of newspaper exposés and judicial action. Lusk Law, LLC specializes in assisting landlords, helping to avoid litigation when possible and actively representing our clients in court when litigation is necessary. Our experienced attorneys have provided legal counsel and representation to landlords in Frederick County, Howard County, Baltimore County, Baltimore City, Carroll County, Washington County, and Anne Arundel County, and other counties in Maryland. With over a decade of experience in representing landlords, we’re ready to offer a consultation concerning your rights. Please call us at 443-535-9715 or fill out our contact form if you have any questions about this topic.