How to put rent money in escrow


January 16, 1994|By George B. Laurent

Poor maintenance is probably the major problem for tenants. Almost as bad is the way tenants are often treated when they complain about needed repairs -- with indifference approaching hostility.

Therefore, many tenants feel that they have the right to withhold rent -- to put it in escrow -- by keeping it or putting it in their own bank account until the repairs are made. That is not the legal way to establish rent escrow.

Rent escrow, a procedure established by a judge, involves paying rent to the court until repairs are made.

In Maryland, the rent escrow process was established in Baltimore City. Later, Baltimore County and the state passed similar laws.

Rent-escrow laws usually cover situations that could threaten the health and safety of tenants: defective heating equipment, bad plumbing, bad wiring, structural defects like a leaking roof or defective stairs. In multifamily dwellings, these could include lack of heat and hot water, rodents and bugs.

Such laws do not cover items like lack of fresh paint, worn wall-to-wall carpeting, small cracks in walls and ceilings.

To create a rent escrow, the tenant must inform the landlord of the needed repair by certified mail. (A written notice from a housing inspector is also sufficient.) The landlord must have a reasonable time to make the repair -- 30 days is normally considered reasonable.

If the landlord does not make the repairs, the tenant may file for an escrow hearing at a cost of $5 and must wait at least 10 days. But many tenants, after giving the landlord reasonable time, withhold rent right away and are taken to Rent Court by the landlord. At that point, the tenant may request escrow. Although this is normally faster, it is risky: If the judge does not grant it, the tenant may have to pay late charges and court costs.

To establish rent escrow, the tenant must have a reasonable case: proper notice was given; the needed repair could affect health and safety; the damages were not caused by the tenant; the condition has not been remedied; the tenant has not refused reasonable entry to make repairs; the tenant has a good rent record. The tenant must also have the full rent to pay to the court.

If the tenant wins the case, the judge may order the landlord to: make the needed repairs; reduce the rent to an amount that fairly represents the condition of the premises; or order the rent to be paid to the court with a refund of part of the rent to be given to the tenant when the repairs are made. The judge may also end the tenancy -- if the tenant wants.

The hope in a rent escrow case is that the landlord will make the needed repairs after receiving the tenant's certified letter and that the tenant will not have to go to court. This is more likely if the tenant also files a complaint with a local housing inspector.

Baltimore City law now allows rent escrow to be used to cover items not essential to health and safety, if such were promised in the written lease or in a written inducement to rent. For example, failure to repair a dishwasher or failure to provide promised free parking.

If you send a self-addressed stamped envelope to BNI, naming your county, we will send a copy of the appropriate rent escrow law for your review.

George B. Laurent is executive director of BNI, or Baltimore Neighborhoods Inc., a private nonprofit group that works to resolve tenant-landlord problems and to eliminate housing discrimination.

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