*Macy Hamlett
The Supreme Court of Maryland narrowed residential landlords’ power in summary ejection and defined a standard of review for multiple motions for class certification. Westminster Mgmt., LLC v. Smith, 312 A.3d 741 (Md. 2024).
I. Introduction
In Westminster Mgmt., LLC v. Smith, the Supreme Court of Maryland, defined “rent” for the first time under Maryland Code, Real Property Article § 8-401, and clarified the treatment of penalties under § 8-208(d)(3)(i) as it pertains to residential leases.[1] The court limited landlords’ power in a traditionally one-sided system and strengthened protections for tenants.[2] Appellant argued that rent “mean[s] whatever the parties agree it means in the lease” absent bad behavior.[3] Appellees contended that the Appellate Court’s narrow definition of rent was correct.[4] The court employed statutory interpretation and construction in their analysis to determine rent in residential leases means the “fixed, periodic payments a tenant owes for use or occupancy of a rented premises.”[5] The court concluded by, setting out a standard of review concerning multiple motions for class certification.[6]
II. Historical Development
A. Statutory Development of Sections 8-401 and 8-208
Section 8-401 permits a landlord to engage in a process to obtain summary ejection of a tenant who has failed to pay rent.[7] The remedies provided under Section 8 are based on who had the superior right to possess land.[8] Originally, the process was used for an ousted tenant to regain possession, but when landlords started to utilize the process to recover possession from tenants, it was no longer efficient.[9] To address this, in 1793 the General Assembly enacted “summary mode” for recovering possession from holdover tenants.[10] This process for landlords to recover possession upon failure to pay rent continued until 1872.[11] The current procedural mechanism for landlord-initiated summary ejection under Section 8-401 was established in 1937 by the Legislature to “effectuate the statutory right” of a landlord to repossess rented premises.[12] Section 8-208 was enacted in 1974 after recommendations from the Governor’s Landlord-Tenant Laws Study Commission.[13] The General Assembly enacted Section 8-208(a)(3), Section 8-208(d)(3)’s predecessor, to regulate landlords’ conduct.[14] In 1980, the General Assembly amended the statute following recommendations.[15] These recommendations were focused on “the expressed purpose” of Section 8-208(d)(3)(i) “better reflecting the costs incurred by landlords in collecting rent.”[16]
B. Case Law Regarding Sections 8-401 and 8-208
In University Plaza Shopping Center, Inc. v. Garcia, the Appellate Court of Maryland held that work performed by a landlord for adaptation of the premises to suit a tenant’s use and enjoyment was not rent.[17] The court reasoned that, in commercial leases, deferring to the lease’s language is appropriate because the lease is more likely to represent the true intent of both parties.[18] The court explicitly stated their decision was limited to commercial leases and residential leases are best decided on a case-by-case basis.[19]
In Shum v. Gaudreau, the Supreme Court of Maryland, applied the test from Garcia,and held that the landlord’s prior summary ejection did not preclude a subsequent action to recover damages for repairs during the tenancy.[20] The court determined the lease was a commercial lease despite the premise being residential.[21] The court held there were requested damages that could not have been deemed rent in the summary ejection action because of the broad language of the “repairs and renovations” clause and the record’s vague findings.[22] The decision again was limited to commercial leases.[23]
In Lockett v. Blue Ocean Bristol, LLC, the Supreme Court of Maryland held under Section 8-208 that rent did not mean “whatever a residential lease defines ‘rent’ to be.”[24] The court reasoned that a narrower, more specific definition was needed because a broader definition would eliminate a tenant’s ability to obtain relief.[25] Here, the court defined rent as the “periodic sum owed by the tenant for use or occupancy of the premises[,]” not other various payments.[26] There was no decision as to whether the definition specifically applied to other Section 8 provisions but the court noted additional provisions that informed its determination.[27]
In Sager v. Housing Commission of Anne Arundel County, a federal district court applying Maryland law found that allocating rent payments to non-rent payments, like utilities, constituted a violation under Section 8-208(d)(2).[28] The court reasoned that allocating payments deemed for rent, even if not notated as such, violated the statute because the tenant became subject to the speedy process of summary ejection instead of the Section 8-402 process for determination of a substantial breach.[29] While the tenant was still afforded some rights under the law, the court held that a “rent-paying tenant should not bear the burden” of determining which right they are guaranteed under the law by being required to notate all rent checks.[30]
III. Instant Case
On September 27, 2017, five former tenants (“Tenants”) of four residential properties managed by Westminster Management, LLC (“Westminster”) in Baltimore City and Baltimore County filed a complaint seeking a declaratory judgment that Westminster’s actions violated inter alia two prohibitions in Section 8-208(d).[31] The tenants alleged Westminster violated Section 8-208(d)(3)(i) by charging a five percent penalty and additional fees related to the summary ejection process.[32] Tenants also alleged that Westminster’s allocation clause violated Section 8-208(d)(2) because the provision waived their rights under Section 8-401.[33] Tenants claimed violations of the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act due to the use of an “overly broad definition of rent.”[34] Tenants also sought class certification in the matter.[35] Tenants filed a motion in November 2018 with a revised motion in January 2019 accompanying their second amended complaint.[36]
In October 2019, both parties filed motions for summary judgment.[37] The circuit court granted summary judgment in favor of Westminster in a one-sentence order for reasons “outlined in [Westminster’s motion] and those which [Westminster] made during argument in open Court.”[38] The court did not issue the declaratory judgment regarding the parties’ rights as requested in the complaint.[39] The Appellate Court of Maryland reversed.[40] The appellate court defined rent for residential leases as the “periodic charges for use or occupancy of the premises,” not additional charges even if they were deemed to be rent.[41] Further, the court held a landlord of a residential premise could only recover rent and costs awarded by the court.[42] Finally, the court held that if the circuit court reviewed Tenants’ second motion for class certification as a motion for reconsideration, then the circuit court would have erred, thus granting Tenants permission to file a new motion.[43] Both parties filed a petition for a writ of certiorari and the Supreme Court of Maryland granted both on June 15, 2023.[44]
The Supreme Court of Maryland affirmed the appellate court’s decision.[45] First, the court rejected Westminster’s arguments that Shum and Garcia were dispositive because the holdings were explicitly limited to commercial leases.[46] The court further rejected Westminster’s argument that rent means whatever the lease defines it to be, calling the position “untenable.”[47] The court found Lockett to be persuasive but not dispositive.[48] Because no prior decisions were dispositive, the court employed statutory interpretation and construction principles.[49] Through these tools, the court affirmed the appellate court’s definition of rent.[50] The court rejected Westminster’s argument that the definition creates inconsistencies and stated that Westminster’s concerns over increased litigation is for the General Assembly to evaluate, not the courts.[51] Lastly, the court rejected Westminster’s claim that the General Assembly supported their preferred definition by refusing to pass a bill that incorporated the court’s definition.[52] The court noted Westminster’s definition had also failed to pass, thus a “mixed record” was created which is not an “‘infallible indicator of legislative preference.’” [53]
Next, the Supreme Court of Maryland held that Westminster’s allocation clause violated Section 8-208(d)(2) because the General Assembly does not allow the use of summary ejection for failure to pay non-rent obligations.[54] The court relied on Sager, which found a similar allocation clause violated Section 8-208(d)(2) due to the fact the landlord’s allocation of payments first to non-rent charges triggered the use of the expedited process of summary ejection instead of Section 8-402’s substantial breach process.[55] The court rejected Westminster’s argument that the allocation clause provided “predictability[,]” noting that predictability is not an exception to Section 8-208(d)(2) and Westminster did not always exercise the clause.[56] The court was unpersuaded by Westminster’s argument regarding the administrative burden of separate ledgers because Westminster already uses different ledgers at two properties.[57]
Further, the court held that Westminster automatically charging for “agent fees” and “summons fees” violated Section 8-208(d)(3)(i) because its legislative purpose is to protect tenants, and a landlord is not required to incur hard costs.[58] The court rejected Westminster’s argument that Section 8-208(d) limits only the amount it can charge as a punitive “penalty” in addition to such “hard costs.”[59] The court once again informed Westminster to petition the General Assembly to address its position.[60]
Lastly, the Supreme Court of Maryland affirmed the material change in circumstances test to determine the merits of a second motion for class certification.[61] The court gave several reasons for their decision.[62] The court also listed examples of some situations that may constitute a material change.[63] The court further stated the material change test does not “erect too high a barrier” of review, which is important given the fact, in Maryland, decisions regarding class certification are not appealable on an interlocutory basis.[64] Because the court held Tenants’ second motion for class certification was materially changed by addressing the circuit court’s concerns in their first denial, the court should have reconsidered the motion on the merits.[65]
In his concurrence in part and dissent in part, Justice Steven Gould, agreed with the majority’s application of the material change in circumstances test, but disagreed with the holding.[66] Justice Gould reasoned that the second motion was considered on the merits because they expressly stated in their order “upon consideration of,” and explained the lack of material change.[67] Further, Justice Gould stated the circuit court had reason to find the new proposed definition was not materially changed because Tenants had presented many different class definitions.[68] Lastly, Justice Gould suggested reversal would disrupt the “status quo” of not requiring a hearing or a written explanation.[69]
IV. Analysis
A. The Court’s Holding Provides Clarity for Summary Ejection Actions Regarding Residential Leases.
Until now, Maryland courts have failed to address the definition of rent for residential premises under Section 8-401, only previously noting some parameters.[70] While other cases expressed residential leases were “best left for determination on a case to case basis[,]” this was never instructive for subsequent court decisions.[71] The court’s decision finallyset forth a standard that is applicable to residential leases.[72] The Supreme Court of Maryland’s definition in Westminster will lead to more consistent rulings in subsequent residential lease cases.[73] Additionally, just as the court used a sister provision to instruct their reasoning, the court’s decision adds to the instructive case law for other Section 8 provisions.[74] The guidelines for summary ejection actions became clearer for residential leases, allowing the actions to be adjudicated more precisely due to the addition of Westminster to establish case law.[75]
B. The Court’s Holding Gives Some Power Back to Tenants in Residential Leases but Lacks Stability.
The court established limits to a landlord’s power under summary ejection.[76] The decision restrains a landlord’s ability to choose which costs are deemed rent and which costs can be used to commence a summary ejection action.[77] However, the court’s repeated referral of Westminster’s arguments to the General Assembly puts tenants at risk of weaker protections in the future.[78] For example, the General Assembly could potentially agree with Westminster’s argument that landlords can recover hard costs, and make the potential costs on tenants higher.[79] By not addressing the arguments in the case at hand, the court avoided creating a stronger precedent and instead spotlighted the issue for the General Assembly, which now could respond with amendments that grant weaker tenant protections and undercut the court’s stance.[80]
Additionally, the court’s decision provides a loophole for landlords in allocation clauses.[81] If Westminster had presented evidence of two distinct ledgers in use at all their properties with clearer guidelines on how they operate, then the Supreme Court of Maryland may have held the clauses did not violate Section 8-208(d)(2).[82] Providing clearer guidelines on how payment allocations work could have provided tenants notice of their rights, and therefore, the clause could have been found to not violate Section 8-208(d)(2).[83] While the court stated that predictability and administrative convenience are not exceptions to Section 8-208(d)(2), the decision gives landlords a starting point to fix allocation clauses, which could eventually lead a court to holding they do not violate Section 8-208(d)(2).[84]
C. The Court’s Holding on Class Certification Blurs the Line of What Constitutes Sufficient Reasoning.
The court’s handling of the order denying Tenants’ second motion for class certification is questionable.[85] As pointed out in Justice Gould’s concurrence in part and dissent in part, there were sufficient reasons as to why the court did not deem the new facts a material changes.[86] The majority’s opinion blurs the line of what constitutes sufficient judicial reasoning because it assumes Tenants’ response to issues raised in the original denial amounted to a material change, thereby requiring a more detailed order.[87] While it is important to push for articulated reasoning by the court when denying a motion, the precedent potentially set by Westminster puts forth the idea that a motion was not addressed on the merits unless the order was detailed.[88] One important fact the court points to is that motions for class certifications are not subject to interlocutory appeal.[89] If a large part of the court’s decision rested on the absence of interlocutory appeals, then the better answer would be to change the rules.[90] Pushing an unclear standard of what “may” constitute a material change and not outlining the rationale for why each change is not material disrupts the status quo as Justice Gould suggests.[91]
V. Conclusion
The court’s decision in Westminster Mgmt., LLC v. Smith limits the power of residential landlords under Section 8-401 of Maryland’s Real Property Law.[92] The court was instructed based on Shum, Garcia, and Lockett, but none of those decisions were dispositive.[93] Therefore, the court relied on statutory interpretation and construction principles.[94] The court agreed with the Stager court’s rationale and holding,that the allocation clause violated Section 8-208(d)(2).[95] While the decision gave power back to tenants of residential premises, those protections remain unsettled.[96] The court also defined a test used for considering multiple motions for class certification.[97] The court’s guidance in evaluating whether the motion was evaluated on its merits,[98] leaves room for inconsistent interpretations by lower courts as suggested by Justice Gould.[99] Tenants in Maryland can rejoice about the decision in Westminster because despite their power being uncertain, the decision clarifies when tenants could be faced with an expedited summary ejection process.[100]
*Macy Hamlett is a second-year student at the University of Baltimore School of Law and a Staff Editor for Volume 55 of Law Review. Macy is a member of Honor Board, a Distinguished Scholar of the Royal Graham Shannonhouse III Honor Society, and a UB LEADS Mentor. In the summer of 2025, Macy worked as Summer Associate for Baker, Donelson, Bearman, Caldwell & Berkowitz PC. Next summer, she will join DLA Piper US as a Summer Associate.
[1] See 312 A.3d 741, 762, 768 (Md. 2024).
[2] See id. at 765; Assanah-Carroll v. Law Offs. of Edward J. Maher, P.C., 281 A.3d 72, 94 (Md. 2022).
[3] Westminster Mgmt., LLC, 312 A.3d at 754.
[4] Id.
[5] Id. at 760, 766; see infra Part III.
[6] Westminster Mgmt., LLC, 312 A.3d at 772.
[7] Id. at 746.
[8] Brown v. Hous. Opportunities Comm’n of Montgomery Cnty., 714 A.2d 197, 200 (Md. 1998).
[9] Id. at 200, 201 (“The action, though available, became cumbersome, time-consuming, and subject to bullying and delaying tactics by the tenant . . . .”).
[10] Id.
[11] Id. at 202.
[12] Id. (discussing how 1937 Md. Laws ch. 529 established the current format of “expedited procedure” for summary ejectment as it exists in Section 8-401).
[13] Westminster Mgmt., LLC, 312 A.3d at 766 (citing McDaniel v. Baranowski, 19 A.3d 927, 938 (Md. 2011)).
[14] See id. (“The stated purpose was to ‘prohibit[] certain types of provisions in residential leases, such as . . . penalties for late payments.’” (quoting 1974 Md. Laws ch. 375)).
[15] Id. at 766–67 (“The Commission proposes repeal of [the ten dollar] limitation on the amount of late payment penalties that a landlord can charge a tenant per month . . . .” (quoting Letter from Steven G. Davidson, Rep. of Governor’s Landlord-Tenant L. Study Comm’n, to Judson P. Garrett, Jr., Chief Legis. Officer (Sep. 13, 1979) (on file with the Maryland State Law Library)).
[16] Id.
[17] 367 A.2d 957, 961 (Md. 1977).
[18] Id. (“We are of the mind that in . . . a lease of premises to be used for a commercial enterprise there is little likelihood of successful overreaching on the part of the landlord and of coerced adhesion on the part of the tenant, so that the final agreement would fairly represent the actual intention of the parties.”).
[19] Id.
[20] 562 A.2d 707, 717 (Md. 1989).
[21] Id. at 714.
[22] Id. at 715–16 (explaining which costs claimed by the landlord are not barred by res judicata).
[23] Id. at 714.
[24] 132 A.3d 257, 271–73 (Md. 2016).
[25] Id.
[26] Id. at 273.
[27] See id. at 272 (identifying other provisions in Subtitle 2 of Md. Code. Ann., Real Prop. § 8).
[28] 957 F. Supp. 2d 627, 636 (D. Md. 2013).
[29] Id. at 636–37.
[30] Id. at 637.
[31] Westminster Mgmt., LLC, 312 A.3d at 751 (identifying the third amended complaint filed in May 2019 as the operative complaint).
[32] Id. at 751–52.
[33] Id. at 752.
[34] Id.
[35] Id.
[36] Id.
[37] Id.
[38] Id. (internal quotation and citation omitted).
[39] Id. at 752–53.
[40] Smith v. Westminster Mgmt., LLC, 290 A.3d 1161, 1169 (Md. App. Ct. 2023).
[41] Id. at 1183.
[42] Id. at 1183–84.
[43] Id. at 1210 (citations omitted) (reasoning that Tenants made “several changes” based on the circuit court’s concerns thus the motion was a new motion for class certification).
[44] Id.; Westminster Mgmt., LLC v. Smith, 296 A.3d 415 (Md. 2023).
[45] Westminster Mgmt., LLC, 312 A.3d at 776.
[46] Id. at 756 (citing Shum v. Gaudreau, 562 A.2d 707, 714 (Md. 1989)).
[47] Id.
[48] Id.
[49] See id. at 758–61.
[50] Id. at 746 (“The Appellate Court of Maryland mostly agreed with the Tenants, as do we. We hold that in the context of residential leases, ‘rent,’ for purposes of § 8-401 . . . means the fixed, periodic payments a tenant is obligated to pay for use or occupancy of the leased premises. Provisions of residential leases that purport to expand the definition of ‘rent’ are ineffective for purposes of § 8-401.”).
[51] Id. at 761.
[52] Id. at 761–62.
[53] Id. at 762 (quoting City of Balt. Dev. Corp. v. Carmel Realty Assocs., 910 A.2d 406, 424 (Md. 2006)).
[54] Id. at 762–63.
[55] Id. (citing Sager v. Hous. Comm’n of Anne Arundel Cnty., 957 F. Supp. 2d 627, 636 (D. Md. 2013)).
[56] Id.
[57] Id. at 763–64.
[58] Id. at 765–68.
[59] Id. at 767–68 (explaining Westminster is “not required to incur hard costs[,]” the court incurred are court costs that can be awarded under another section, and the General Assembly can decide the amount a landlord recovers).
[60] Id. at 768 (“Westminster can call upon the General Assembly to increase the amount of the permitted penalty/late fee or, if it believes we have misinterpreted the General Assembly’s intent, to clarify that § 8-208(d)(3)(i) does not prohibit landlords from recovering both a 5% penalty and costs of collection.”).
[61] Id. at 772–73.
[62] Id. (“[The test] comports with the standard applied by many federal district courts, it is consistent with Rule 2-231, and it strikes an appropriate balance between accommodating changes in circumstances and judicial efficiency.”).
[63] Id. at 773 (stating a material change in circumstances could include: substantial changes in class definition, new evidence, a change in law, or a change in the “legal landscape” from court rulings).
[64] Id. at 774.
[65] Id. at 774–75.
[66] Id. at 776–77.
[67] Id. at 777–78 (Gould, J., concurring in part and dissenting in part) (cleaned up).
[68] Id. at 778–80 (“[O]ver the course of the eighteen months . . . Tenants submitted eight proposed class definitions.”).
[69] Id. at 783.
[70] Id. at 754–55 (majority opinion); see supra Part II.
[71] Westminster Mgmt., LLC, 312 A.3d at 755 (citing Univ. Plaza Shopping Ctr., Inc. v. Garcia, 367 A.2d 957, 961 (Md. 1977)); see supra Part III.
[72] See supra Part III.
[73] Westminster Mgmt., LLC, 312 A.3d at 761.
[74] Id. (discussing use of Lockett v. Blue Ocean Bristol, LLC, 132 A.3d 257 (Md. 2016)).
[75] See id. at 761 (“The interpretation we adopt provides consistency in the treatment of residential leases.”).
[76] See supra Part III.
[77] See Westminster Mgmt., LLC, 312 A.3d at 767–68, 773–74.
[78] Id. at 761 (“[T]hat is a policy decision for the General Assembly to make.”); see supra Part III.
[79] See Westminster Mgmt., LLC, 312 A.3d at 768.
[80] Id. at 758–59.
[81] Id. at 763–64.
[82] See id.
[83] See id. at 765–66 (“The apparent legislative purpose underlying § 8-208 is to regulate leases for residential property in Maryland for the protection of tenants. It does so by . . . mandating transparency concerning automatic renewal provisions, permitting local jurisdictions to enact broader rights and remedies . . . .” (citing Md. Code. Ann., Real Prop. § 8-208(e), (f), & (g)).
[84] See id. at 763–66.
[85] See id. at 776–80 (Gould, J., concurring in part and dissenting in part).
[86] Id. at 778–80.
[87] See id. at 774–75 (majority opinion).
[88] See id. at 752–53, 774.
[89] See id. at 774 (“[I]n Maryland, unlike in federal court, decisions on class certification are not subject to interlocutory review, getting to the right answer on class certification is more important . . . .”).
[90] Id.
[91] See id. at 776–80 (Gould, J., concurring in part and dissenting in part); supra Part III.
[92]See Westminster Mgmt., LLC, 312 A.3d at 762–63, 768.
[93] Id. at 755–57.
[94] Id.
[95] Id. at 763.
[96] See supra Section IV.B.
[97] See supra Part III.
[98] See Westminster Mgmt., LLC, 312 A.3d at 772–75.
[99] See supra Section IV.C.
[100] See supra Section IV.A–B.
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