Rent Escrow: When the Landlord Fails to Make Repairs
Topics on this page:
- Property conditions and repairs
- Minor problems or non-dangerous violations
- Steps in the rent escrow procedure
- Representation at a rent escrow hearing
- What the Court may order
Property conditions and repairs
Maryland law requires landlords to repair and eliminate conditions that are a serious threat to the life, health, or safety of occupants.
If a landlord fails to repair serious or dangerous problems in a rental unit, you have the right to pay your rent into an escrow account established at the local District Court. You will pay your rent money directly to the court, and the court will hold it until a judge hears your case and makes a decision. You may get back all or part of your rent, depending on how bad the conditions are and how long it takes the landlord to fix the problem.
The law is very specific about the conditions under which rent may be placed in escrow. You must give the landlord proper notice and adequate time to make the repairs before you have the right to place rent in escrow. The escrow account can only be set up by the court. You can ask a court to establish a rent escrow by filing a Complaint for Rent Escrow (DC-CV-083).
Rent escrow provides tenants with a way to get repairs of serious and dangerous problems in their home, whether the problem is within a single unit or in an area used jointly by all tenants. The problems covered by this law are those which constitute "a substantial and serious threat of danger to the life, health, and safety" of a tenant. Rent escrow is not for problems that just make the apartment or home less attractive or comfortable, such as small cracks in the floors, walls or ceiling. Rent escrow cannot be used for non-dangerous violations of a local housing code and dangerous conditions in the community, like crime.
The serious or dangerous conditions include, but are not limited to:
- lack of heat, light, electricity, or running hot and cold water (unless you are responsible for the utilities and the utilities were shut off because you didn't pay the bill)
- lack of adequate sewage disposal
- rodent infestation in two or more units
- lead paint hazards that the landlord has failed to reduce
- the existence of any structural defect that presents a serious threat to your physical safety
- the existence of any condition that presents a serious fire or health hazard
It is the public policy of the state that landlords who permit dangerous conditions to exist in their leased property be punished, and that an effective law be established to prevent and repair these conditions.
This law applies to all residential dwelling units except farm tenancies.
It applies equally to publicly and privately owned units and to single and multiple unit dwellings.
Read the Law: Md. Code, Real Property § 8-211
Rent Escrow Part 1: What is Rent Escrow? from the Maryland Courts
Minor problems or non-dangerous violations
Minor problems or non-dangerous violations of a local housing code are not covered by this law. The court generally assumes that the following conditions are not a threat the health and safety unless you can prove otherwise: lack of fresh paint, rugs, carpets, paneling or other decorations that only reduce the visual appeal of the property; small cracks in the walls, floors, or ceiling; lack of linoleum or tile on the floors, provided the floors are structurally sound and safe; or the absence of air-conditioning.
Steps in the rent escrow procedure
The tenant must notify the landlord of the defective condition. The required notice to the landlord may be any one of the following:
- a written notice sent by certified mail, listing the dangerous condition or defect
- actual notice of the defect or condition (meaning the landlord has seen the dangerous condition)
- or a written violation, condemnation, or other notice from an appropriate government agency identifying the condition or defect
Written notice is a better form of proof for the courts. After receipt of the notice, the landlord has a reasonable time to make repairs. The actual length of time considered reasonable is for the court to decide, taking into account the seriousness of the problem and the danger it presents to the occupants. The court will usually assume that a period of more than 30 days after receipt of notice is unreasonable unless the landlord can show otherwise. If a Housing Inspector has given the landlord a shorter deadline, that will often be considered to be a reasonable deadline.
If the landlord refuses to make repairs, or fails to make repairs within a reasonable time, the tenant may bring an action of rent escrow, asking to be allowed to pay the rent into court, or may withhold rent from the landlord and wait to be sued.
Before an escrow account can be established, the court will hold a hearing to listen to both sides of the story. If the facts call for a rent escrow account to be set up, the judge can take several actions, including returning all or part of the money to you as compensation, returning all or part of the money to you or the landlord in order to make repairs, or appointing a special administrator to ensure that the repairs are made. Once the escrow account is established, you must continue to regularly pay rent into this account, until the Court orders otherwise.
The tenant may request any of the remedies provided by this law, whether he sues the landlord for the conditions or he defends against non-payment of rent for the bad conditions. In addition, if the landlord does not correct the condition within 90 days after the court finds that the condition exists, the tenant may seek an "injunction" in District Court, where the Court will order the landlord to make repairs.
Whether the tenant is the plaintiff or the defendant, relief is conditioned upon the following:
- The landlord received proper notice and, if appropriate, had reasonable time to correct the defect.
- The tenant paid into court the amount of rent required under the lease, unless that amount is modified by the court.
- In monthly tenancies or tenancies measured by a period of more than one month, there have not been 3 (4 in Baltimore City) or more judgments of possession for rent due and unpaid entered against the tenant in the 12 months preceding the filing of the action.
- In weekly tenancies, there have not been 6 or more judgments of possession for rent due and unpaid entered against the tenant in the preceding 12 months, or, where the tenant has lived in the dwelling for 6 months or less, there have not been 3 or more judgments of possession entered against the tenant.
The landlord will prevail if he can prove one of the following:
- the defective condition was caused by the tenant or a member of his family, or by his agent, employee, assignee, or guest; or
- the landlord or his agent was denied reasonable and appropriate entry to the premises to make the repairs.
Rent Escrow Part 2: The Rent Escrow Process from the Maryland Courts
Representation at a rent escrow hearing
Usually, only a lawyer can represent someone in court. For rent escrow actions, there are other options for landlords and tenants.
A landlord may choose to have a non-lawyer represent them in a summary ejectment (eviction) or rent escrow action in District Court. It is common for landlords to have their property agents represent them in such actions.
Tenants may choose to have a non-lawyer represent them in rent escrow or summary ejectment proceedings in District Court if the person is
- a law student practicing in a clinical law program at an accredited
- law school with the in-court supervision of a faculty member; or
- an employee of certain types of non-profit organizations who has training and is supervised by a lawyer.
Read the law: Md. Code, Business Occupations and Professions, § 10-206
What the Court may order
The court shall make appropriate findings of fact and may make any order that justice requires. Such an order may include one or more of the following:
- Order the landlord to make certain repairs or correct the conditions complained of by the tenant and found by the court to exist.
- Dismiss the rent escrow action.
- Reduce the amount of rent required under the lease, whether paid into court or to the landlord, to an amount that fairly represents the condition of the premises.
- Termination of the lease and surrender of the premises to the landlord, subject to the tenant's right of redemption (tenants right to stay on the property by paying amounts owed).
Note: Failure to obey an order of the court constitutes contempt of court, which is punishable by fine or imprisonment.
If a proper rent escrow case is shown and the escrow account is established, the court may do one of the following:
- Order the money in the escrow account to be given to the landlord after the necessary repairs have been made.
- Order some or all of the money in the escrow account to be paid to the tenant, or to the landlord, or to any other appropriate person or agency, for the purpose of making necessary repairs.
- Appoint a special administrator who shall cause the repairs to be made, and who shall apply to the court to pay for them out of the money in the escrow account.
- Order some or all of the escrow funds to be used to pay a mortgage or deed of trust on the property to prevent foreclosure.
- If no repairs are made or if no good faith effort to repair is made within 6 months after the initial decision to place money in the escrow account, that the funds in escrow to be given to tenant. The tenant must continue to pay rent into court. However, if the landlord appeals the case, this forfeiture of escrow funds to the tenant will be stayed while the appeal continues.
- After an appropriate hearing, if the tenant does not regularly pay his rent into the escrow account, order the accumulated money to be given to the landlord.
Note: Baltimore City has a rent escrow law that is very similar to the state law. Baltimore residents must exercise their rent escrow rights under city law. If you reside in a county where such a rent escrow law has been adopted, you must follow procedures required in the local law for setting up an escrow account.
Read the Law: Md. Code, Real Property, § 8-211