312 A.3d 741
Md.2024Background
- Westminster Management used a standard form residential lease that defined “rent” as “all payments from Tenant to Landlord required under the terms of this Lease” and contained an "Application of Payments" clause allowing the landlord to allocate tenant payments (at landlord’s option) to late charges, agent fees, attorney’s fees, court costs, other obligations, and only then to monthly rent.
- Westminster routinely charged a 5% late fee and also charged “agent,” “summons,” and “writ” fees (some charged before court awards) and used an agent (eWrit) to file summary ejectment actions for late or unpaid rent.
- Five former tenants sued Westminster on behalf of a putative class alleging: (1) lease terms violated Md. Code, Real Property § 8-208(d)(2) (waiver of statutory remedies) and § 8-208(d)(3)(i) (late fee cap), and (2) related statutory and contract claims; they sought declaratory and injunctive relief and class certification.
- The circuit court granted Westminster summary judgment and denied class certification; the Appellate Court reversed on the key statutory issues and revived several tenant claims, and this appeal followed.
- The Maryland Supreme Court affirmed the Appellate Court: holding that (1) for residential leases § 8-401 “rent” means fixed, periodic payments for use/occupancy; (2) a landlord allocation clause that can divert payments from rent to non-rent obligations violates § 8-208(d)(2); (3) the 5% late-fee cap in § 8-208(d)(3)(i) is inclusive of collection costs other than court-awarded costs; and (4) a trial court should revisit class-certification motions when there is a material change in circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of “rent” under Real Prop. § 8-401 for residential leases | "Rent" is limited to the fixed, periodic payment for use/occupancy; variable fees and separately labeled charges are not "rent." | "Rent" should follow the lease definition—parties may agree what counts as rent, including additional fees. | For residential leases, "rent" means fixed, periodic payments for use/occupancy; lease provisions expanding that definition are ineffective for § 8-401. |
| Legality of payment-allocation clause (apply payments to non-rent before rent) under § 8-208(d)(2) | Allocation clause effectively waives tenant's statutory protection that summary ejectment is only for unpaid rent; clause violates § 8-208(d)(2). | Clause is a permissible contractual allocation that provides predictability and relieves tenants of allocation duties. | Allocation clause violates § 8-208(d)(2) to the extent it allows landlord to use summary ejectment based on "rent" already paid but reallocated to other obligations. |
| Scope of 5% late-fee cap under § 8-208(d)(3)(i) | The 5% cap on penalties/late-fees is inclusive of collection costs (other than court-awarded costs); landlords cannot add agent/summons/writ fees on top. | The 5% is a punitive penalty separate from reimbursement of actual "hard costs" of collection; landlords may recover both. | The 5% late fee is inclusive of collection costs other than court costs awarded by the court; landlords may not automatically tack on additional collection fees beyond 5%. |
| Standard for subsequent motions for class certification under Md. Rule 2-231 | A plaintiff may file a new certification motion after an amended complaint; court must consider a later motion when circumstances materially change. | Court may decline to revisit certification absent a material change; repetitive filings may be denied. | A court should consider the merits of a subsequent certification motion when there is a material change in circumstances (changes to claims, class definition, evidence, or law); here the trial court erred by refusing to consider the renewed motion on that basis. |
Key Cases Cited
- Brown v. Housing Opportunities Comm’n of Montgomery Cnty., 350 Md. 570 (1998) (historical development of Maryland summary ejectment regime)
- University Plaza Shopping Ctr., Inc. v. Garcia, 279 Md. 61 (1977) (commercial-lease context: lease definition can expand "rent")
- Shum v. Gaudreau, 317 Md. 49 (1989) (application of Garcia in commercial context; caution about extending rule to residential leases)
- Lockett v. Blue Ocean Bristol, LLC, 446 Md. 397 (2016) (residential context: "rent" means periodic charge for use/occupancy; guides interpretation here)
- McDaniel v. Baranowski, 419 Md. 560 (2011) (summary ejectment is limited, expedited remedy tied to unpaid rent)
- Assanah-Carroll v. Law Offs. of Edward J. Maher, P.C., 480 Md. 394 (2022) (describing summary ejectment as "powerful tool")
- Velicky v. Copycat Bldg. LLC, 476 Md. 435 (2021) (procedural aspects of summary ejectment and right of redemption)
- Ben-Davies v. Blibaum & Assocs., P.A., 457 Md. 228 (2018) (statutory interpretation limits of related landlord-tenant provisions)
- Chavis v. Blibaum & Assocs., P.A., 476 Md. 534 (2021) (when appellate rulings revive claims, the legal landscape for class certification changes)
- Sager v. Housing Comm'n of Anne Arundel Cnty., 957 F. Supp. 2d 627 (D. Md. 2013) (district court conclusion that tenants may be summarily evicted only for unpaid rent; allocation clauses impermissible)