New Baltimore City Law Requires Changes to Residential Leases and Impacts Assessment of Late Fees

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On March 22, 2021, the Baltimore City Council passed legislation that mandates changes to all residential leases and impacts when late fees may be imposed.

Specifically, the law, entitled “Late Fees for Past Due Rent,” provides that “a residential lease shall include a provision that the landlord may not apply late fees to the rent until the tenant is more than 10 days past due with the rent.”

As drafted, the above provision is required to be included on all residential leases in Baltimore City, whether or not a late fee is actually contemplated by the lease unless a statutory exemption from the lease requirements applies, e.g., it does not apply to leases for rental units within an owner-occupied residence.

If a residential landlord seeks to impose a late fee for delayed or nonpayment of rent, the lease:

must include a provision that prohibits a landlord from applying a penalty fee for late payment of rent until:

(i) The tenant’s payment of the rent is more than 10 days late; or

(ii) The tenant has received the tenant’s regularly scheduled government benefit disbursement if the tenant has previously provided the landlord with written notice that shows the day of the month the government benefit is normally issued or mailed is later than the day on which the rent is due.

The Late Fees for Past Due Rent Law, which was signed by Mayor Brandon Scott on March 31, 2021 and becomes effective on April 30, 2021, only applies prospectively to new leases and shall not have retroactive effect on leases entered into prior to April 30, 2021.

The Law follows the Council’s adoption of the COVID-19 Rent Increase Protection Act last year. Effective for the duration of the Governor’s declaration of a State of Emergency, the COVID-19 Rent Increase Protection Act prohibits rental fee increases on existing tenants until 90 days after the State of Emergency has been lifted and prohibits assessing and seeking to collect late fees from tenants during the State of Emergency.

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