Owning and managing residential rental property is a business. To be successful and have a positive experience, careful planning and research is required. In addition, it is essential that you know the federal, state, and local laws governing the landlord-tenant relationship. If you are considering becoming a landlord, this article will suggest some guidelines and resources.
A. What are the various types of tenancies?
In a landlord-tenant relationship, property owned by the landlord is temporarily conveyed to a tenant. The conveyance creates what is known as a tenancy. A tenancy can be any of the following:
- Tenancy for years. A tenancy for years is created by an agreement between the landlord and the tenant. If the tenancy is longer than one year, the agreement must be in writing. If the tenancy is longer than seven years, although it may not be required, the agreement should be recorded in accordance with the local laws of the county or city that the property is located in. Generally, unless the lease states otherwise, termination occurs automatically upon the expiration of the term.
- Periodic tenancy. A periodic tenancy can be year-to-year, month-to-month, or week-to- week. This type of tenancy can be created based on when the rent is paid, and the terms of the lease, if applicable. Generally, unless the lease states otherwise, termination occurs automatically upon the expiration of the term.
- Tenancy at will. A tenancy at will exists if a tenant is given permission to take possession of a property, but there is no agreement regarding the length of the lease, or the payment of rent.
- Tenancy at sufferance. Typically, a tenancy at sufferance exists if a tenant does not have permission to take possession of, or remain on a property. A common example of a tenancy at sufferance occurs where a landlord rents property to a tenant, and the tenant continues to stay on the premises after his or her lease expires.
B. What laws apply to a landlord-tenant relationship?
As a Maryland landlord, you must know the federal, state and local laws that govern the landlord-tenant relationship. Because many of the laws can be complicated—especially the federal and state housing discrimination laws—it is advised that you contact an attorney to help you understand your rights and duties. While each county may have different laws governing the landlord-tenant relationship, the basic statewide rules that apply can be found in Title 8, subtitles 1 through 6 of the Real Property Article of the Maryland Code. The applicable provisions of the Real Property Article can be accessed online, free of charge at LexisNexis or the General Assembly of Maryland .
C. What should I do before getting started?
Before deciding to rent your property, consider the following:
- Research. It is important that you know the laws governing the landlord-tenant relationship, and understand your rights and responsibilities under the landlord-tenant laws. Check your local library for books on being a landlord, and visit online resources such as Baltimore Neighborhoods, Inc. (BNI). BNI offers free introduction packets for landlords, which answer questions regarding security deposits, evictions, rent, property maintenance, and more. These packets can be downloaded in PDF at: http://www.bni-maryland.org/index-9.html
- Condition of the Property. For instance, make sure that the plumbing, electrical system, furnace, roof, etc. are in a safe, working condition. Check whether the property complies with federal, state, and local housing standards.
- Safety Devices. Important safety devices (i.e., smoke detectors, carbon monoxide detectors, sprinkler systems, fire extinguishers) should be installed inside/on your property?
- Essentials. Does your property have essentials such as a stove or refrigerator? Most tenants expect these appliances to be installed in the property.
- Rent and Security Deposits. Establish a reasonable rent. When determining a fair price for rent, among other factors, consider the property’s amenities, the current value of the property, its location, and the rate that similar properties are renting for.
Under Maryland law, a security deposit may not be more than the equivalent of two months’ rent, and the security deposit must be deposited in a federally insured financial institution, within 30 days of receipt. In addition, Landlords are required to provide tenants with a receipt for security deposits.
A landlord must also provide receipts when a tenant requests one, or the tenant pays rent using cash.
- Tenant Application. Create an application that you will use to screen prospective tenants. The application should request pertinent information such as the tenant’s social security number, yearly income, current address, phone number, employer, references, etc.
D. What are my rights and duties as a landlord?
A landlord has a duty to maintain the property, and must not disturb a tenant’s possession of property. A landlord is also prohibited from taking retaliatory actions against the tenant.
Duty to maintain. With most residential leases, there is an implied warranty of habitability. Under this warranty, a landlord has a duty to maintain the property so that it is reasonably suited for residential uses. The landlord must also comply with all housing code requirements. The implied warranty of habitability cannot be waived.
Disruption of tenant’s possession. Every lease contains a covenant of quiet enjoyment. This means that a landlord cannot disturb a tenant’s possession, use, or enjoyment of the property.
Retaliatory actions prohibited. As a landlord, sometimes issues may arise with tenants. Always remember that a landlord cannot take any retaliatory actions against a tenant. This includes evicting the tenant without a court order, locking the tenant out of the property, abruptly increasing the rent, or decreasing services that a tenant is entitled to receive. Retaliatory actions are prohibited even if the tenant has failed to pay rent, or has failed to move after receiving a proper notice to vacate, or the lease term has expired.