Comptroller Henry Testifies in Support of House Bill 703 to Close Rental License Loophole
Tuesday Feb 15th, 2022
204 City Hall - Baltimore Maryland 21202
FOR IMMEDIATE RELEASE
Geoff Shannon, Public Relations Officer
Comptroller Bill Henry this week testified in support of House Bill 703, sponsored by Delegate Mary Lehman of Prince George’s County and crossfiled by Senator Shelly Hettleman of Baltimore County. This legislation would close the loophole created by the Court of Appeals in its ruling in the Copycat Building case (December 2021). The Comptroller's verbal testimony (available on Youtube) and letter of support were presented at Wednesday's meeting of the House Judiciary Committee, chaired by the honorable Delegate Luke Clippinger.
Dear Chairman Clippinger:
I am writing in support of House Bill 703, “Real Property—Actions to Repossess—Judgment for Tenants and Proof of Licensure.” HB 703 would require a landlord who files an action for repossession of residential property in the District Court to demonstrate that the property is licensed as required under applicable local laws or ordinances before the landlord can obtain a judgment for failure to pay rent, tenant holding over, or breach of lease. Baltimore City, which I represent, has such licensing requirements codified in Subtitle 4 of Article 13, Housing and Urban Renewal, of the City Code.
Before my election to the Office of Baltimore City Comptroller, I served for thirteen years on the Baltimore City Council. In 2018 I introduced Council Bill 18-0185, which significantly broadened and strengthened the existing rental licensing laws by extending licensing requirements to non-owner-occupied, one and two-unit rental dwellings. The bill had eleven co-sponsors including our current Mayor, Brandon Scott, and was enacted into law in April 2018 as Ordinance 18-130. I developed this legislation in collaboration with not only the City’s Housing department, but also many of the advocates who are testifying before you on HB 703, including the Public Justice Center. Council Bill 180-0185 was the most significant update to Baltimore City’s rental licensing law in fifty years, and it effectively applied inspection and safety requirements to all private rental housing.
The aim of our local legislation was to extend licensing, inspection, and safety requirements to what was then one of the least-regulated sectors of the rental property market. A guiding principle underlying this major expansion of rental licensing is that affordable, safe, and well-maintained housing is a human right. As a former community development professional, I was and am well aware of the terrible conditions that some landlords, particularly absentee landlords shielded by anonymous LLCs, allow their properties to deteriorate into. It is essential that all landlords be held to the basic standards of maintenance and safety that the City’s licensing law mandates. Similarly, landlords should be required to have a valid license before pursuing expedited actions of eviction against renters. I can say without hesitation that this was our clear legislative intent—if landlords did not follow the law by inspecting and licensing their properties, they not should not have government’s assistance in taking action against their tenants.
As a lifelong advocate for fair and affordable housing, I was deeply concerned by the Court of Appeals’ ruling in Velicky v. Copy Cat Building last December. I realize that the provisions of state law allowing the use of summary eviction proceedings in the District Court have evolved over many years and reflect the wisdom and consensus of the General Assembly, and that Velicky only applied to an action under Maryland’s “tenant holding over” statute. The Court’s holding, however, stretched the current law beyond any reasonable interpretation and created a loophole through which unlicensed landlords can retake their property within a matter of days of filing with the District Court, simply because they are asserting a right of possession and not claiming any money from their tenant.
This ruling is a judicially-crafted slap in the face to local jurisdictions with rental licensing laws, as well as to renters who deserve safe and habitable housing, and to landlords who follow the law and keep their property inspected and registered. To paraphrase Judge Watts’ dissent, allowing an unlicensed landlord to repossess property under the tenant holding over statute means there will be little incentive for landlords to obtain licenses and comply with housing code requirements. The precedent Velicky creates is even worse. Since the Court of Appeals has fashioned a way around local licensing requirements in one class of expedited eviction actions, it is only a matter of time before unlicensed landlords seeking to evict tenants for failure to pay rent and breach of lease start pushing such cases through the judicial system. That is why HB 703 is vitally necessary. It codifies what should be common sense; if a local jurisdiction has a rental licensing ordinance, a landlord must comply with it before using expedited procedures to evict a tenant.
Simply put, effective and enforceable rental licensing laws are the right thing to do, as a matter of public policy and of simple equity and justice. The change in state law proposed in HB 703 offers a simple solution to restore the balance between landlords’ property rights and the duty of local governments to protect our constituents from exploitation.
For all these reasons, I respectfully request the committee to give HB 703 a favorable report.
Bill Henry, Baltimore City Comptroller
The Comptroller is scheduled to testify again on this issue next Tuesday, Feb. 22 before the Senate Judicial Proceedings Committee to support Senator Hettleman's Senate Bill 563. That hearing will be held in-person. More details are available at the committee website.