A District Court judge in Maryland has denied a motion to dismiss claims that a property management company is not a debt collector under state law while also denying a motion over attempts to collect rent when it did not have the proper licenses to do so. The ruling keeps alive consumer protection, debt collection, habitability, and negligence claims tied to allegations that tenants were charged rent during periods when the property was unlicensed and conditions were unsafe, while trimming back some theories that lacked allegations of concrete injury.
The background: The plaintiff, a tenant in a large Maryland apartment complex, alleged that the defendants operated and collected rent without required local rental licenses for extended periods and failed to maintain habitable conditions.
- The complaint described recurring water intrusions, mold, pest infestations, heating failures, safety issues, and delayed or superficial repairs, along with health impacts and medical costs.
- The plaintiff brought claims under Maryland consumer protection and debt collection statutes, as well as habitability and negligence theories, arguing that rent collection during unlicensed periods and under unsafe conditions was unlawful and harmful.
The ruling: Judge Adam B. Abelson of the District Court for the District of Maryland declined to dismiss the debt collection claims on the theory that the defendant was not a “collector” under Maryland law, explaining that Maryland’s definition is broader than the federal FDCPA definition.
- Judge Abelson also allowed claims to proceed where the plaintiff alleged actual damages tied to habitability failures, noting that licensing regimes are designed to protect tenant safety and that alleged health related costs can qualify as concrete injury.
- At the same time, the judge drew limits around claims based solely on collecting rent while unlicensed without alleging injury from legally compelled payments. As he put it, Judge Abelson said, “Simply alleging a lack of licensure is not enough,” and a tenant must allege actual injury to recover under consumer protection theories.
- The judge further allowed habitability and negligence claims to move forward based on detailed allegations of notice, ongoing defects, and inadequate remediation, while striking requests for certain remedies, including punitive damages.
