Rent Escrow in Landlord Tenant Court

In February 2015, a wave of brutally cold weather caused water pipes to burst throughout Maryland, affecting homes, businesses, schools and government buildings. For landlords, that’s a potential nightmare scenario – when pipes burst, especially in more than one rental property, the repair costs can be prohibitive. But delaying repairs can be even more costly. Maryland law requires landlords to correct serious defects in a reasonable length of time. A burst pipe that deprives tenants of running water is one such defect, as are these:
  • A lack of heat, hot water, or electricity
  • Sewage system failures, such as back-ups or main line obstructions or collapse
  • Rodent infestation present in two or more units
  • Physical defects that could harm tenants, such as a crumbling ceiling
  • Untreated lead paint
  • Conditions that are hazardous to the health of tenants or that are considered a fire hazard.
When landlords don’t act quickly to repair these defects, tenants may file a rent escrow action in court. If the court approves the action, the tenant’s rent payments are deposited into an escrow account with the court to be held until the landlord performs the necessary repairs or the money is authorized to be released by the court. While paying into an escrow account, a tenant cannot be evicted for non-payment of rent.

Determining Severity of the Defect

Landlords and tenants won’t always agree on the definition of a “serious” defect. Generally, a tenant would be unable to file an escrow action for conditions such as small cracks in the walls, worn carpeting, or a lack of air conditioning. So long as the property is structurally sound and doesn’t endanger the health or safety of tenants, landlords are not obligated to make repairs. Some conditions could be considered dangerous, depending on the extent of the problem and who the tenants are. For example, the presence of a small patch of mold on a wall might not be considered a health risk, but if mold were covering a large section of a basement, and the tenant had asthma, or small children were living in the home, mold could present a significant health risk.

Obligations Regarding Lead Paint

Maryland law requires landlords whose properties were built before 1978 to do the following before leasing space to tenants:
  • Register the property with the Maryland Department of the Environment and pay a $30 annual fee, unless the property is lead free and then there is a one time payment of $10.
  • Provide tenants with two pamphlets – “Lead Poisoning Prevention: Notice of Tenant’s Rights,” and “Protect Your Family From Lead in Your Home” (federal law requires that these pamphlets be provided to tenants if their rental home was built prior to 1978)
  • Perform lead hazard reduction treatments, get a risk-reduction certificate, and provide a copy of that certificate to tenants prior to their move-in date.
Lead-based paint may be present without harming the health of tenants, but if it begins chipping or peeling, tenants run a risk of inhaling lead dust. A tenant who notices chipping or peeling paint in a home may send a written Notice of Defect to the landlord, and the landlord has 30 days to perform a modified risk reduction on the property. During lead remediation, pregnant women and children under age 6 may not be present; if tenants must leave the property for more than 24 hours, the landlord must pay for reasonable accommodations and meals for tenants while they’re away.