So you want to be a landlord? Part 5 — The Implied Warranty of Habitability

So Landlord, you’ve already:

1. obtained your rental license;
2. found and approved a qualified tenant;
3. entered into a well-crafted lease agreement that protects both your interests and the tenants; and,
4. properly collected (and provided your tenant with a receipt) and deposited your tenant’s security deposit into an appropriate account.

Do your obligations stop there? What happens if your tenant starts complaining about things like, a lack of heat, lack of electricity, mold in the dwelling unit, a rodent infestation, or a lack of water? Is it your responsibility to repair these types of defects? What if your Lease Agreement requires your tenant to make repairs to the property? Can you just say, “too bad, tenant, it’s not my responsibility”?

The short answer is “no.”

In every lease agreement, whether expressly stated or otherwise not is something called the “Implied Warranty of Habitability.” The Implied Warranty of Habitability is codified at Section 8-211 of the Real Property Article of the Maryland Annotated Code and it requires that a Landlord repair and eliminate conditions and defects which constitute, or if not promptly corrected will constitute, a fire hazard or a serious and substantial threat to the life, health or safety of occupants, including, but not limited to:

· Lack of heat, light, electricity, or hot or cold running water, except where the tenant is responsible for the payment of the utilities and the lack thereof is the direct result of the tenant’s failure to pay the charges;
· Lack of adequate sewage disposal facilities;
· Infestation of rodents;
· The existence of any structural defect which presents a serious and substantial threat to the physical safety of the occupants;
· The existence of any condition which presents a health or fire hazard to the dwelling unit.

Succinctly, if a landlord fails to repair serious or dangerous defects in a rental unit, Section 8-211 gives a tenant the right to pay rent into an escrow account established at the local district court. However, Maryland law is very specific about the conditions under which rent may be placed in escrow, and the escrow account can only be established by the court. First and foremost, a tenant must give a landlord proper notice and adequate time to make the repairs before a tenant has the right to place rent in escrow. Proper notice by the tenant is generally achieved by sending a landlord a letter via certified mail or by the landlord’s receipt of violations from an appropriate government agency such as the local housing authority.

Once a landlord receives notice of these serious defects/conditions, a landlord has a reasonable amount of time after receipt of the notice in which to correct the conditions. If you fail to do this, Landlord, your client may file a Petition in Action for Rent Escrow wherein your tenant will ask to pay the rent to the court.

After the Petition in Action for Rent Escrow has been filed, the District Court in your local jurisdiction will hold a hearing and evaluate both the landlord’s and tenant’s position. If the facts call for a rent escrow account to be established, the judge can take several actions, including returning all or part of the money to the tenant as compensation, returning all or part of the money to your tenant or to you, Landlord, so that you can make repairs. Once the escrow account is established, the tenant continues to pay rent into this account.

The bottom line is this, Landlord: Be responsible! You have a duty under the law to keep your dwelling unit safe for your tenants. The Implied Warranty of Habitability cannot, by law, be waived by your written lease agreement. You cannot, by the terms of your lease agreement, require a tenant to repair serious defects to the dwelling unit. When something happens that affects the health, safety or well-being of your tenants, then fix it.  Otherwise, Landlord, you may find yourself standing in front of a judge trying to explain why you rented an unsafe property.

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