Everyone Loses When Landlords of Unlicensed Properties Try to Collect Rent

Rent is prohibitively expensive these days.  To be approved to rent an apartment in a building managed by a reputable company, you have to be so wealthy that, 15 years ago, your income level would have gotten you approved for a home mortgage.  The safest rental agreements are the ones where the landlord and the tenant can do a thorough background check on each other.  When tenants rent from a licensed property, they should reasonably expect that the property will continue to keep its license active.  What happens if the rental license of a property expires while tenants are still living there?  Do tenants have an obligation to continue paying rent after their landlord’s rental license has expired?  What legal remedies do landlords have if tenants do not pay rent to live in unlicensed properties?  The whole situation is a mess, and the first step that you, as a landlord, should take toward mitigating their financial losses is to renew the rental license on their properties.  Meanwhile, to sort out the entire legal and financial mess, you should contact a Washington, D.C. real estate lawyer.

Maryland Supreme Court Rules That Landlords and Tenants Engage in Shady Rental Agreements at Their Own Risk

In 2022, the Maryland Supreme Court issued a ruling about the rights and obligations of landlords and tenants after the rental license of a real estate property has expired.  The Court ruled that landlords have the right to continue accepting rent payments from tenants while the property’s rental license is inactive.  Meanwhile, as long as the property’s license is inactive, landlords do not have the right to use the court system to compel tenants to pay overdue rent.  In other words, if your rental license expires and your tenants skip paying their rent until your license gets reinstated, then you can ask them nicely to pay their rent, but you cannot file a lawsuit against them in an effort to collect payment.

The court also ruled that, if tenants voluntarily pay rent to a landlord while the property’s rental license is expired, they do not have the right to ask the court system to seek reimbursement for the rent money they paid.  In other words, they can ask the landlord nicely to refund the money for the months they paid to live in an unlicensed property or to credit the payments they made during that period toward future months, but they do not have the right to sue.

This month, a group of tenants has filed a class action lawsuit against a landlord that they claim took legal action against them to collect rent payments while the property did not have a valid rental license.  They have also named as a defendant a law firm that the landlord hired to help it collect payment.

Contact Tobin O’Connor Ewing About Disputes Between Landlords and Tenant

A Washington, D.C. real attorney attorney can help you if your tenants claim that they have the right not to pay rent.  Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.

Source:

thedailyrecord.com/2023/11/27/law-firm-property-owner-sued-for-collecting-rent-at-unlicensed-apartments/