A District Court judge in Maryland has granted a motion for summary judgments filed by a pair of landlords who were sued for violating state collection laws in the state, ruling the plaintiffs lacked standing to pursue the lawsuit that accused the defendants of attempting to collect rent without having the proper license to do so.
The background: The plaintiffs entered into a residential lease and paid rent over multiple years. During portions of that lease term, the rental property did not have a valid license issued by the city of Baltimore. The plaintiffs alleged they were unaware of the lapse at the time.
- When rent payments were late, the defendants contacted the plaintiffs seeking payment, and a third-party collection firm later filed a summary ejectment action that was voluntarily dismissed. The plaintiffs were not evicted, and no judgment was entered against them.
- After learning about the licensing lapse, the plaintiffs sued, arguing that the defendants had no right to collect rent during unlicensed periods and that those collection efforts violated Maryland consumer protection and debt collection statutes.
The ruling: Judge Adam B. Abelson of the District Court for the District of Maryland granted summary judgment to the defendants, finding that the plaintiffs could not establish an actual injury or loss as required to pursue claims under the relevant Maryland statutes.
- Judge Abelson’s opinion emphasized that, under Maryland precedent, voluntarily paying rent to an unlicensed landlord does not by itself create a compensable injury. The judge noted that tenants may have viable claims when rent is paid pursuant to a court order or eviction proceeding tied to an unlicensed period, but that was not the case here because the collection action was dismissed and no court order compelled payment.
- Quoting Maryland appellate precedent, Judge Abelson explained that “a tenant who voluntarily paid rent to a landlord who lacked a rental license may not bring a private action” without showing concrete damages beyond the payment itself. Denying landlords the ability to use the courts to collect rent during unlicensed periods does not equate to tenants being entitled to rent free housing, according to the ruling.
- Because the plaintiffs failed to show that the alleged collection activity caused a compensable injury, the court granted the defendant’s motion for summary judgment.
