Zachary Babo*
I. Introduction
Often, landlords are not held “accountable when they don’t ensure minimum standards of habitability” are met.[1] As a result, disputes over substandard living conditions may lead to tenants withholding rent as they wait for repairs that often never come.[2] Instead, landlords respond by initiating summary ejectment proceedings to evict tenants due to their failure to pay rent.[3] The Court of Appeals of Maryland (Court of Appeals) recently heard a case that encapsulates the frustrating nature of a renter’s ordeal.[4]
Latashia Pettiford’s landlord, Next Generation Trust Service (Next Generation), filed a complaint in November 2018, seeking to repossess her rental unit due to failure to pay rent.[5] She found herself in the District Court for Baltimore City facing the prospect of owing roughly $5,000 for five months of unpaid rent and late fees.[6] Ultimately remanding the case, the Court of Appeals validated most of Pettiford’s defenses, affirming prior holdings and clarifying the proper application of the rental escrow statute.[7] The Pettiford decision provides valuable tools for renters trapped in substandard housing and ensnared between apathetic landlords and a hostile district court.[8]
II. Licensure Requirements May Provide Relief
First, Pettiford sought dismissal of Next Generation’s claim due to its failure to obtain a “use and occupancy permit” after receiving a violation notice from Baltimore City.[9] The district court stated it only needed to consider if the landlord filled out a form attesting to their licensure and the property’s valid inspection.[10] Pettiford’s attorney contested they needed to actually obtain an occupancy permit.[11] After Next Generation communicated such a permit could be obtained for $73, the district court “stated ‘this is a revenue[-]enhancing bill for [Baltimore] City[,]’ and denied the motion to dismiss.”[12] As part of its review of the lower court’s denial of the motion, the Court of Appeals reasserted a 2011 decision that may provide significant relief to renters when applied to the City’s newly enacted licensing regime for landlords.[13] The Court reasoned that “[l]icensure under local ordinances . . . to operate rental dwelling units is an integral part of a landlord’s status as claimant,” and the capacity to initiate an ejectment proceeding rests on the landlord’s ability to show “he is licensed at the time of the filing of the complaint for summary ejectment.”[14]
Recognizing that most Baltimore City housing code violations come from substandard living conditions in one-and-two-unit rentals, Baltimore expanded its licensing requirements to include these smaller properties, going beyond the previous ordinance that only applied to multifamily dwellings.[15] As of January 1, 2019, “to receive or renew a rental license, a landlord must have a valid use and occupancy permit, where such a permit is required.”[16] Although this ordinance did not apply to Pettiford’s original motion to dismiss, the Court of Appeals expressly stated that McDaniel‘s holding applies to the new licensing scheme and thus to Pettiford’s case on remand.[17]
The City’s expansion of landlord licensing requirements could be a significant safeguard for renters who withhold payment for apartments languishing in disrepair due to a landlord’s intransigence.[18] At the initial district court hearing, Pettiford’s landlord initiated a summary ejectment proceeding.[19] However, under the holdings in McDaniel and Pettiford, if a property lacks the licensing required by the new City ordinance when the landlord initiates the proceedings, the renter can thwart the summary ejectment and dismiss the claim.[20]
III. Disagree to Agree
Perhaps the most frustrating exchange in the record is also, unfortunately, one of the most common—the court found a “consent judgment”[21] where none existed.[22] Neither party can appeal a consent judgment, which is why such rulings can be the death knell for a tenant’s relief in a rental dispute.[23]
The Court of Appeals was confounded by how the district court could conjure a consent judgment “where there was no agreement whatsoever entered into between the parties to resolve or settle the case.”[24] According to the Court, “there obviously was no agreement presented to the District Court,” no “consideration given for settlement of the case,” and “neither Pettiford nor her counsel consented to the so-called consent judgment.”[25] Most glaringly, “there was no valid consent by Pettiford.”[26] Noting her prior “mmm-hmm” in acknowledging the rent figures the district court recited, the Court of Appeals “decline[d] to construe a murmur and two expressions of thanks as consent to the judgment proposed by the District Court.”[27] Consequently, the Court of Appeals held that the ruling was not a consent judgment, but just a “run-of-the mill judgment determined by a trial court,” rendering it eligible for appellate review.[28] Mere acknowledgment of the sum allegedly owed is not grounds for a consent judgment.[29]
IV. Elusive and Exacerbating Escrow
Maryland’s rent escrow statute allows tenants who have provided proper notice to their landlord of “serious and dangerous defects” in “the residential dwelling unit,” to “bring an action of rent escrow to pay rent into court” after “a reasonable time” in which the landlord has failed to correct the conditions.[30] When Pettiford’s counsel asserted “a defense based on the warranty of habitability, including a request for rent escrow,” the district court retorted that if Pettiford wanted to call the unit uninhabitable, “she’ll be out by midnight.”[31] Pettiford’s counsel relented the argument, and the Court moved on to the amount still owed.[32] Pettiford then attempted to extoll the apartment’s habitability issues, most notably that the heat had not been working since February.[33] But because the rent owed was from July through October, the Court said the heat was not a relevant reason to withhold rent, and escrow could begin in November, presumably when heat would be an issue, but not for the prior months.[34]
The Court of Appeals held that Pettiford properly raised a claim for breach of the warranty of habitability as a defense under the rent escrow statutes, which the district court was required to consider.[35] Instead, the district court effectively threatened immediate eviction if Pettiford pursued the breach of the warranty defense, which “unmistakably deprived Pettiford of her statutory right to pursue breach of the warranty of habitability related to the lack of heat.”[36]
If a landlord refuses to correct hazardous conditions, the tenant may refuse to pay rent, raising the existence of these conditions as an affirmative defense.[37] The hazardous conditions at issue in a rent escrow defense do not have a “temporal limitation” that need to occur or impact the tenant “during the months for which rent is sought to be recovered.”[38] A district court should not construe this remedial legislation so narrowly when it is meant to incentivize the landlord to repair “serious and dangerous conditions in a residential rental unit through significant sanctions for a landlord who allows such conditions to exist.”[39]
V. Conclusion
Pettiford affirms precedent that protects vulnerable tenants and clarifies how the law should apply to current summary ejectment disputes involving substandard housing conditions.[40] Tenants may now utilize Baltimore’s new housing code to stop summary ejectment proceedings if the landlord lacks the proper licensing.[41] In establishing the correct interpretation of the rent escrow statutes, the Court of Appeals made it clear that tenants may utilize this affirmative defense in summary ejectment proceedings by raising habitability claims, even if the relevant issues did not persist during the months for which rent is sought.[42] Further, if tenants happen to find themselves falling backwards into an agreement simply by acknowledging the rent due, Pettiford speaks to the absurdity of construing such affirmation as grounds for a consent judgment, instead maintaining the tenant’s ability to appeal.[43] “With this Court of Appeals ruling, judges and landlords will have a strong reminder that they must listen and take action when tenants raise concerns about housing conditions.”[44]
*Zachary Babo is a second-year student at the University of Baltimore School of Law, where he is a Staff Editor for Law Review. He currently serves as a judicial intern for the Hon. Joseph M. Getty on the Maryland Court of Appeals and a teaching assistant for Prof. Amy Sloan’s Introduction to Lawyer Skills class. He spent the summer of 2020 interning at the Maryland Office of the Attorney General, Civil Litigation Division. He was a recipient of a 2020 Sondheim Public Service Law Fellowship. Prior to law school, Zachary worked more than a decade as a multimedia journalist.
[1] See Doug Donovan & Jean Marbella, Dismissed: Tenants Lose, Landlords Win in Baltimore’s Rent Court, Balt. Sun (Apr. 26, 2017), http://data.baltimoresun.com/news/dismissed/.
[2] See id.
[3] See id. A summary ejectment is a legal action taken by a landlord to regain possession of rented property from a tenant who fails to pay rent. See Md. Code Ann., Real Prop. § 8-401(e). A tenant may redeem the leased property by tendering the outstanding payment, plus court costs, at any time before the eviction order. See id.
[4] See Pettiford v. Next Generation Tr. Serv., 467 Md. 624 (2020).
[5] Id. at 632.
[6] Id.
[7] See id. at 642–43, 654, 668.
[8] See Tenant Scores Court of Appeals Victory Over Negligent Landlord, Pub. Just. Ctr. (Mar. 27, 2020), https://www.publicjustice.org/en/story/tenant-scores-court-of-appeals-victory-over-negligent-landlord/ [hereinafter Tenant Scores Victory].
[9] Pettiford, 467 Md. at 632.
[10] Id. at 633.
[11] Id.
[12] Id.
[13] Id. 640–41.
[14] McDaniel v. Baranowski, 419 Md. 560, 587 (2011) (emphasis added).
[15] See Doug Donovan, New Baltimore Law Requiring All Rental Properties to Be Inspected Aimed at Improving Conditions, Balt. Sun (Aug. 3, 2018, 6:25 PM), https://www.baltimoresun.com/politics/bs-md-ci-rental-housing-20180803-story.html.
[16] Pettiford, 467 Md. at 641 (citing Baltimore City Code).
[17] Id. at 642–43.
[18] See Donovan, supra note 15.
[19] Md. Code Ann., Real Prop. § 8-401.
[20] See Pettiford 467 Md. at 642–43.
[21] “This court may enter a judgment at any time by consent of the parties.” Md. Rule 3-612 (West 2020). Because such decrees are supposed to represent a willfully agreed to resolution of the issues, reached after “careful negotiation” between the parties and “supported by consideration,” they are generally not appealable. See Pettiford, 467 Md. at 644–45.
[22] See Pettiford, 467 Md. at 635–37; see generally Tenant Scores Victory, supra note 8 (stating district court judges “frequently issue consent judgments based on the tenant’s admission to not having paid certain amounts of rent, even when the landlord is not providing a safe place to live”).
[23] See Pettiford, 467 Md. at 645.
[24] Id. at 651.
[25] Id. at 650–52; see generally id. at 644–46 (reviewing state law governing consent judgments).
[26] Id. at 652.
[27] Id. at 653.
[28] Id. at 649; see generally id. at 644–46 (reviewing state law governing consent judgments).
[29] See id. at 651–52.
[30] Md. Code Ann., Real Prop. § 8-211.
[31] Pettiford, 467 Md. at 633–34.
[32] Id. at 634.
[33] Id.
[34] Id.
[35] Id. at 665.
[36] Id.
[37] See id at 666.
[38] Id. at 667.
[39] Id. at 667–68.
[40] See id. at 668; see also Tenant Scores Victory, supra note 8.
[41] Pettiford, 467 Md. at 642–43.
[42] Id. at 667–68.
[43] Id. at 649–54.
[44] See Tenant Scores Victory, supra note 8.
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