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What if I purchase a home “as-is” and later discover latent defects that are significant and expensive to repair?

Buyers can submit to mediation through Maryland REALTORS® to recover damages associated with latent defects not disclosed at the time of sale.

In the State of Maryland, the standard Residential Contract of Sale form used by Maryland REALTORS® includes a provision that allows for mediation of disputes arising out of the sale and purchase of a residential property. Mediation is a process where parties attempt to resolve a dispute without, or before the filing of a lawsuit with the assistance of a neutral mediator. When a buyer of residential property discovers a latent defect after purchasing property and it is clear the seller knew about said defect and failed to disclose it to the buyer, mediation through Maryland REALTORS® can be an effective process to achieve a resolution. A copy of the Residential Contract of Sale form can be found here.

 

What is a latent defect?

In Maryland, a “latent defect” in residential property is a material defect that the seller knows about and (1) is not visible, (2) could not be reasonably expected to be uncovered by the buyer before the purchase is made, and (3) could endanger the health or welfare of the buyer.

A “material defect,” as encompassed in the term latent defect, is a significant issue with a residential property’s system or structure that adversely affects the property’s value, poses a health or safety risk, or undermines the buyer’s capacity to enjoy it.  Notably, a material defect is a substantial problem, as opposed to a minor or aesthetic issue. Examples of material defects include, but are not limited to:

  • Major structural issues or other decay in the property’s architecture, including damaged foundation, sloped floors, bowed walls, or horizontal cracks.
  • Significant roof or basement leaks that require extensive repairs.
  • Outdated and malfunctioning plumbing or electrical issues that make the property unsafe.
  • The presence of asbestos, lead paint, mold, or other hazardous materials.

As you can see from the above examples, these material defects would not be visible or expected to be uncovered by a buyer before purchasing the property, and all pose significant health and safety risks.

 

Does a seller have a duty to disclose latent defects, even if the property is being sold “as-is”?

Yes, sellers of residential property, even if it is being sold “as-is,” have a duty in Maryland to disclose any latent defects of which the seller had actual knowledge and that a buyer (or the buyer’s home inspector) could not reasonably expect to find by a visual inspection and pose a direct threat to health or safety of the buyer.  While a seller can still indicate that the property is being sold “as-is,” the seller is still required to indicate latent defects by completing the Maryland Residential Property Disclosure and Disclaimer Statement, which is included in the Residential Contract of Sale form used by Maryland REALTORS®.

 

What if the seller failed to disclose a latent defect and as a result, I now have significant and expensive costs to repair the property?

Our office can help you review the contract of sale to determine if you are eligible for mediation with the Maryland REALTORS®.  Importantly, all claims or disputes between a buyer and seller must be submitted to mediation with the Maryland REALTORS® within one year following the closing date of the sale, so you should not delay in contacting an attorney.  If a latent defect is discovered after one year, you may still have legal recourse.  In Maryland, the standard statute of limitations to file a claim is three years, so if you miss the one-year mediation deadline, you should still contact an attorney to determine if you have a viable claim.

 

Can I skip mediation offered by Maryland REALTORS® and immediately file a lawsuit in court?

Mediation is generally faster, simpler, and often less expensive than litigation.  However, mediation is a voluntary process that must be agreed to by the buyer and seller.  Under certain circumstances, you may choose to bypass the mediation and immediately file a lawsuit in state court.  However, the Maryland Residential Contract of Sale expressly states that if you file a lawsuit in state court and ultimately lose, you will be responsible for paying the other party’s attorneys’ fees, in addition to your own.  Our office can provide advice regarding whether you should proceed with mediation or litigation based on the unique facts of your case.

If you need assistance with reviewing a Maryland Residential Contract of Sale and/or believe you have a dispute or claim to submit to mediation with Maryland REALTORS®, please do not hesitate to contact Silverman Thompson’s experienced real estate attorneys by phone or e-mail for a free consultation:

 

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On May 23, 2024, after nearly a year of motions practice, Judge George L. Russell III of the United States District Court for the District of Maryland granted plaintiff’s motion to remand its putative class action to state court. Serving as local counsel, Silverman Thompson filed the class action in the Circuit Court for Baltimore City on January 19, 2023. The plaintiff, who has been employed as an hourly, non-exempt worker at Johns Hopkins Hospital (“Johns Hopkins”) for over thirty years, contends that Johns Hopkins has a policy of rounding employees’ hours resulting in illegal withholding of wages, failure to pay minimum wage, and failure to pay overtime wages in violation of the Maryland Wage Payment and Collection Law.

Johns Hopkins removed the matter to federal court more than seven months after receiving the complaint on the basis of federal question jurisdiction. Johns Hopkins argued that the United States District Court for the District of Maryland had jurisdiction pursuant to Section 301 of the Labor Management Relations Act, which provides the court subject matter jurisdiction over employment disputes governed by collective bargaining agreements. Plaintiff promptly filed a motion to remand maintaining that Johns Hopkins’ removal was untimely – in accordance with 28 U.S.C. § 1446, Johns Hopkins had thirty days following receipt of the complaint to file a notice of dismissal.

In its opposition, Johns Hopkins declared that its removal was timely because it first became aware on August 11, 2023, after analyzing the plaintiff’s opposition to Johns Hopkins’s motion for summary judgment, that the resolution of the claims brought against it require interpretation of a collective bargaining agreement. Consequently, Johns Hopkins argued that it filed its notice of removal twenty days after its alleged discovery and within the time limitation prescribed in 28 U.S.C. § 1446.

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In fall 2021, Silverman Thompson filed suit in federal court in Pennsylvania on behalf of a provider of inmate communication services for prisons. The suit alleged that just as Silverman Thompson’s client was about to finalize a contract with a county prison, the incumbent service provider and business rival used illegal, anti-competitive tactics to scuttle the deal and secure a renewal of its contract with the prison. After extensive preliminary motions practice, the district court dismissed the complaint for failure to state a claim, but gave Silverman Thompson’s client the opportunity to amend. Confident in its claims as drafted by Silverman Thompson, the client elected to stand on the complaint and appealed the dismissal to the U.S. Court of Appeals for the Third Circuit.

After briefing and oral argument in the Third Circuit led by Silverman Thompson attorneys, the client’s choice was vindicated in December 2023 when the appeals court issued an opinion vacating the dismissal and remanding for further proceedings in the district court to more fully evaluate whether the complaint stated claims under Pennsylvania common law.

On remand, the district court re-examined whether the complaint adequately alleged “independently actionable conduct” by the business rival sufficient to state a claim for tortious interference.  Finding that the complaint had adequately alleged defamation of Silverman Thompson’s client as a means of preventing it from getting the contract, the court denied the motion to dismiss the tortious interference claim.  The case will now go forward to discovery.

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Senate Bill 19 requires the District Court to shield all court records relating to the filing of a Failure to Pay Rent Complaint within sixty (60) days after the final resolution of the nonpayment of rent case if the case did not result in a judgment for possession. Further, upon the filing of a motion by a tenant, the District Court may also shield court records relating to a failure to pay rent proceeding that did result in a judgment for possession if:

(1) The tenant demonstrates by a preponderance of the evidence that the paid the judgment amount prior to eviction and stayed in the property (i.e., the tenant exercised their right of redemption) and at least 12 months have passed since the entry of the judgment;

OR

(2) The court determines that there is otherwise good cause to shield the court records.

 

If there is a rent escrow case associated with a failure to pay rent case, only the records relating to the failure to pay rent case will be shielded.

The shielding of these records means that landlords will not be able to obtain information about the prior payment history of prospective tenants.

 

If you need assistance with understanding recent changes in Maryland landlord-tenant law or issues involving failure to pay rent complaints in Maryland, please do not hesitate to contact us by phone or e-mail:

Avery Barton Strachan, Esq.

astrachan@silvermanthompson.com

(410) 385-9113

 

Kerri L. Smith, Esq.

ksmith@silvermanthompson.com

(410) 385-9106

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What is the Tenant Safety Act of 2024?

Pursuant to House Bill 1117, effective October 1, 2024, the statute commonly known as the “rent escrow statute” will be amended to:

  • Allow multiple tenants to join as plaintiffs in a Petition in Action of Rent Escrow (commonly known as a rent escrow action);
  • Include a rebuttable presumption that a tenant is entitled to the adjudication of a request for rent abatement;
  • Include a rebuttable presumption that a tenant is entitled to an abatement of prospective rent; and
  • Allow a court who orders any relief to a tenant in a rent escrow matter to make a claim for recovery of attorney’s fees, costs and expenses related to litigation.

Permitting multiple tenants to join as plaintiffs in the same Petition in Action of Rent Escrow against a landlord will primarily affect multi-family properties with several units, where a group of tenants may make the same allegations in a rent escrow actions such as mold, flooding, rodents, or other similar issues that affect several units.

Significantly, the changes in the law also place the burden on the landlord to prove that it has not breached the warranty of habitability, as the court will presume that a tenant is entitled to abatement of both past due and prospective rent unless and/or until the landlord convinces the court otherwise.

These changes will impact all Maryland landlords.

 

If you need assistance with understanding recent changes in Maryland landlord-tenant law or issues involving rent escrow cases filed against landlords in Baltimore City, Baltimore County or the surrounding counties, please do not hesitate to contact us by phone or e-mail:

 

Avery Barton Strachan, Esq.

astrachan@silvermanthompson.com

(410) 385-9113

 

Kerri L. Smith, Esq.

ksmith@silvermanthompson.com

(410) 385-9106

 

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What is constructive eviction?

An actual eviction occurs when a commercial landlord brings legal action seeking possession of leased premises from a commercial tenant, is awarded possession in Court, schedules an eviction of the tenant with the sheriff’s office, and the eviction is carried out by the sheriff.

A constructive eviction occurs when a commercial landlord does not physically or legally evict a commercial tenant, but rather acts, or fails to act, in a manner that interferes with a tenant’s use and enjoyment of the leased premises significantly enough to constitute an eviction in fact. For there to be a “constructive eviction,” a commercial tenant must be deprived of possession or beneficial use of the leased premises, which results in the tenant’s abandonment of the premises within a reasonable time.

 

To establish that there has been a constructive eviction in a commercial tenancy, a commercial tenant must prove that:

  1. The commercial landlord acted, or failed to act, in a way that substantially interfered with the tenant’s use and enjoyment of the leased premises;
  2. The landlord’s actions or inactions cause the leased premises to be unusable for the purpose it was rented;
  3. The commercial tenant gave the commercial landlord notice of the problem that led to the interference with the tenant’s use of the premises, and the landlords failed to respond and/or resolve the problem; and
  4. The tenant vacated the premises in a reasonable amount of time after the landlord failed to resolve the problem.

 

What are examples of circumstances that may constitute constructive eviction in a commercial lease?

The scope or magnitude of the landlord’s interference necessary to constitute a constructive eviction must go to the essence of what the landlord is to provide. There must be evidence that the landlord substantially interfered with the tenant’s use of the premises. While there are many acts or situations that would constitute a breach, common ones include:

  • Eliminating a significant number of parking spots.
  • Permitting persistent, loud construction (except if for necessary repairs).
  • Routinely playing loud, intrusive music in common areas.
  • Failure to provide electricity.
  • Failure to provide operable elevator service.
  • Failure to furnish adequate heat or air conditioning.
  • Failure to furnish sanitary restroom facilities.
  • Structural defects, such as persistent leakage of water through the roof, ceiling, or walls because of landlord’s fault.
  • Serious defects in the sewer, plumbing, or drainage.
  • Actions that deny customers access to the premises.

 

Notably, there are times when disturbances to quiet enjoyment are out of the landlord’s control, or permitted by the commercial lease, which would not constitute a constructive eviction, such as:

  • Construction conducted by the city in which the building is located.
  • Aesthetic issues inside the building and/or premises, such as the need to repaint or replace carpet.
  • Aesthetic issues outside the building, such as the need to clean windows, power wash the building, or maintain decorative landscaping.
  • Neighboring businesses that create unnecessary noise.
  • Major renovations to the building and/or premises.

When would a commercial tenant claim that a constructive eviction has occurred?

When a commercial tenant is unable to use its leased premises in the manner for which it was leased, the tenant does not receive the benefit of its bargain. In those circumstances, if a commercial tenant believes there has been a constructive eviction, the commercial tenant must vacate the premises in a reasonable amount of time, as the failure to do so results in a waiver of any potential constructive eviction claim.  After vacating, a commercial tenant may argue that the landlord has constructively evicted them and then may withhold rent and vacate the leased premises. If a commercial landlord seeks the rent owed under the commercial lease from the tenant, the commercial tenant may raise a constructive eviction as a defense to the rent owed. If the facts justify a legal finding of a constructive eviction, a commercial tenant will be released from liability under the lease.

 

If you have questions regarding constructive eviction or would like assistance in reviewing a commercial lease, please do not hesitate to contact us by phone or email:

 

Avery Barton Strachan, Esq.

astrachan@silvermanthompson.com

(410) 385-9113

 

Kerri L. Smith, Esq.

ksmith@silvermanthompson.com

(410) 385-9106

 

Erin Donohue Brooks, Esq.

edonohuebrooks@silvermanthompson.com

(410) 385-9101

 

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What is the Renters’ Rights and Stabilization Act of 2024?

House Bill 693 made several substantial changes to existing Maryland landlord-tenant law:

Nonpayment of Rent Complaints

The cost for a landlord to file a Failure to Pay Rent Complaint has increased from $8 to $43 per case (plus an additional $10 in Baltimore City), along with the cost of service.

A landlord is not permitted to recover this cost from a tenant unless a court enters a judgment for possession in the landlord’s favor and the lease agreement provides that a surcharge may be assessed against the tenant.

Any deduction for this surcharge, if awarded by the court, may not be recovered from a tenant in an amount that exceeds the amount of the tenant’s security deposit.

 

Security Deposits

A landlord may not charge a security deposit in excess of one (1) month’s rent with very limited exception. This is a change from prior law which permitted a landlord to charge a security deposit of up to two months’ rent. The security deposit may not be forfeited to the landlord for breach of a lease, except in the amount the landlord is actually damaged by a breach, or the amount of a surcharge authorized by law.

 

Maryland Tenants’ Bill of Rights

The Renters Rights and Stabilization Act creates an Office of Tenant and Landlord Affairs to ensure that tenants have access to educational resources to aid in understanding and exercising tenants’ rights under state law, provides tenants with information on how to report a violation of their legal rights, offer tenants information on how to obtain financial counseling, and notify authorities regarding housing discrimination. The Office of Tenant and Landlord Affairs has been tasked with developing a Maryland Tenants’ Bill of Rights.

Landlords must provide tenants with a copy of the most current version of the Maryland Tenants’ Bill of Rights published by the Office of Tenant and Landlord Affairs at lease signing.

 

Tenants’ Right of First Refusal

House Bill 693 amends Section 8-119 of the Real Property Article and mandates the owner of residential rental property to send each tenant a written notice of the tenant’s right to deliver an offer to purchase the property, subject to certain exceptions, prior to listing the residential rental property for sale. The law governing this right of first refusal for residential tenants is detailed and very complex and, if a property owner fails to comply with its obligations, a tenant may file a notice of lis pendens which would interfere with closing on a sale of property.

The majority of the changes imposed by the Renters Rights and Stabilization Act will go into effect on October 1, 2025, and will impact all Maryland landlords and property owners.

 

If you need assistance with understanding recent changes in Maryland landlord-tenant law or issues involving failure to pay rent complaints, security deposits, or rights of first refusal in Baltimore City or the surrounding counties, please do not hesitate to contact us by phone or e-mail:

Avery Barton Strachan, Esq.

astrachan@silvermanthompson.com

(410) 385-9113

 

Kerri L. Smith, Esq.

ksmith@silvermanthompson.com

(410) 385-9106

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On April 15, 2024, Judge Richard Bennett of the United States District Court for the District of Maryland permanently enjoined the University of Maryland from suspending or preventing the graduation of Silverman Thompson client John Doe, a second-semester senior at College Park. Doe was the subject of a formal complaint of sexual assault filed a year after he attended a fraternity party with a student from another university.  The State’s Attorney choose not to proceed with criminal charges against him, but the University proceeded with its internal disciplinary process against Doe and imposed the sanction of expulsion, later reduced to a one-year suspension through the school’s appeal process.

With Doe’s timely graduation and the start of his professional career hanging in the balance, Silverman Thompson sought relief on his behalf in federal court, filing a complaint under Title IX and accompanying emergency motion for injunction relief against College Park. On January 3, 2024, Judge Bennett granted the temporary restraining order, which allowed Doe to attended classes in the spring semester and remain on track to graduate.

Silverman Thompson then amended the complaint and motion for preliminary injunction to add a due process claim against College Park’s Title IX coordinator and the hearing officer who decided Doe’s case.  The defendants argued that the due process claim should be dismissed and the injunction denied because Doe had no protected property or liberty interest in his continued enrollment at College Park, and the process he received was sufficient. At hearing on April 15, Judge Bennett rejected those arguments and agreed with Doe’s attorneys that College Park’s procedures violated his due process rights. Doe is now expected to graduate on time this May.

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You’ve just lost your case in a Maryland trial court and want to appeal – how do you do it?  For the purpose of this article, we’ll assume your case is in a Maryland circuit court (different rules may apply if you’re in the district court).  We’ll also assume your case allows a direct appeal; most, but not all, cases are of this type. We’ll further assume you want to exercise your right of appeal to Maryland’s intermediate appellate court, called the Appellate Court of Maryland. In very limited cases, there may be a right of direct appeal to the Supreme Court of Maryland.  A litigant can also try to skip the intermediate appellate court and go straight to the Supreme Court, but that’s rare.  These two situations are beyond the scope of this article.

How to Appeal a Circuit Court Decision in Maryland

With those qualifications out of the way, we can get down to business.  Fortunately for lawyers and litigants, filing an appeal is relatively easy.  Maryland Rule 8-201 states that, subject to an exception not addressed here, “the only method of securing review by the Appellate Court is by the filing of a notice of appeal within the time prescribed in Rule 8-202.”  So, what’s a notice of appeal?  It’s a simple document that informs the lower court of a party’s intention to appeal.  Rule 8-201 states that “[i]t is sufficient that the notice be substantially in the following form”:

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When are emotional support and/or service animals allowed in rental housing in Maryland? 

Under Maryland law, landlords are required to allow tenants with disabilities to keep emotional support and/or service dog in the rental unit, with very limited exceptions.  Landlords may be able to inquire and request that documentation be provided by a tenant regarding the need for the requested reasonable accommodation for an emotional support and/or service animal, prior to granting such request.   

 

What is a service animal? 

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