Big changes have come to Maryland’s rental housing landscape—and if you’re a property owner, now’s the time to decide if you hand in the keys or buy more doors. The Renters’ Rights and Stabilization Act (RRSA) went into effect October 1, 2024, directly affecting landlords and tenants. Whether you’re considering selling or expanding your portfolio, these new regulations could tip the scales.
Here’s what you need to know:
1. Higher Eviction Filing Fees
Maryland had the lowest eviction filing fees in the nation. The RRSA raised those fees to better align with neighboring states—and prohibited landlords from passing those costs to tenants in most cases. If you have a history of problem tenants and regular evictions, this can sap the cash out of a cash-flowing property.
2. Security Deposit Caps
Security deposits are now capped at one month’s rent, making it tougher to buffer against property damage or lease violations. This change means rethinking lease strategies and tenant screening processes for landlords who rely on larger deposits to mitigate risk. Let’s face it, one month’s rent covers dream tenants who move on to buy a house, but it doesn’t cover tenants who have damaged your property or created nightmares for you. This also impacts collecting security deposits for pets or for tenants with bad credit who would like to pay additional months in advance as a show of good faith. One month’s security deposit means one month’s deposit regardless of the situation.
3. Lease Addendums and New Oversight
The RRSA establishes a new Office of Tenant and Landlord Affairs, which will release an annual Maryland Tenants’ Bill of Rights. This summary must be attached to every residential lease, which creates more work and increased liability for landlords. If you don’t have your hand on the pulse of these changes, you could open yourself up to more risk and less cash flow. At the time of this writing, the Bill of Rights had not been released yet but once it is, we will make sure to blog about it to keep our readers informed.
4. Right of First Refusal for Tenants
Thinking of selling a 1-, 2-, or 3-unit rental property? The RRSA grants tenants the right of first refusal—meaning they must be given the option to buy before you can sell to someone else. Although tenants usually aren’t buyers, it can inhibit your profits and slow down a sale. While this isn’t a significant risk, it’s something to consider especially if the tenants are not happy about the sale of the home. They can drag out the listing process for 30 to 60 days before signing off on their right to purchase even if they don’t have the means to purchase it.
5. Eviction Timeline Extensions and Weather Restrictions
Evictions will now require more time between judgment and execution, and cannot be executed during extreme weather conditions, which can mean letting a non-paying tenant turn up the heat all winter, while you sit and stew, waiting to evict. While these changes protect vulnerable tenants, they don’t protect the landlord. This change could make you decide to turn in the keys or turn to professional property management with SureVestor coverage.
What Should You Do?
If your portfolio is lean, self-managed, or already feeling stretched by compliance requirements, this might be your cue to turn in the keys. But if you’re ready to scale up with systems and support in place, you could once again roll in the dough from your real estate investments.
If you’re unsure of how the Renters’ Rights and Stabilization Act (RRSA) affects your portfolio, contact us. Our team of professionals can help you decide how to mitigate your risk and keep your cash flowing.
If you have questions or would like to discuss property management services for your investment property, give us a call at 443.252.3385 or email us at info@bluedoor-pm.com today!
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