A recent court ruling could force landlords in Montgomery County to refund thousands of dollars in rent increases, according to the director of the county's Landlord-Tenant Office. The decision would apply to landlords who failed initially to offer their tenants two-year leases.
"This (ruling) could wreak havoc on the county's landlords. There are literally thousands of tenants in Montgomery County who weren't offered a two-year lease," said Tom Hamilton, executive director of the Landlord-Tenant Office.
There are about 70,000 apartment units in the county, Hamilton said.
Hamilton referred to a ruling of the county Circuit Court which denied an appeal of Grady Management, Inc., a Siver Spring real estate firm, to overturn a June, 1976 Landlord-Tenant Commission order involving the refunds.
The refunds to the individual tenant at the company's Montgomery White Oak apartment development will amount to less than $500, Hamilton said. However, he expects the ruling, once it becomes known, to generate a huge number of complaints.
Hamilton and assistant county attorney Donald L. Hoage, who handled the case, said there's already a backlog of about 20 similar tenant complaints that were awaiting the outcome of the Greenberg decision.
Attorneys for the Grady firm said they are discussing whether to appeal the Circuit Court's decision to the Maryland Court of Special Appeals. They must file an appeal by February 7. The Grady company manages about 3,800 apartments in Montgomery County.
The specific ruling concerned the tenants complaint that when he moved into his apartment in 1974, company officials didn't offer him a two-year lease in violation of a 1972 county provision which stipulates that all tenants be offered such a lease whether or not they want one.
The company, which never denied that it didn't offer the tenant a two-year lease, said it didn't do so because of contradictory county provisions governing rent control and landlord-tenant relations.
Attorneys for the company argued the effect of the provision was to deny the firm a "reasonable return" from the use of their property in violation of constitutional guarantees of the due process.
But Circuit Court Judge David L. Cahoon ruled that the company's provisions weren't contradictory and that the landlord-tenant commission's ruling was legally correct.
Hamilton said many landlords ignored the 1972 provisions requiring the offer of a two-year lease until last year when a clause was inserted allowing a landlord to apply for a rent increase for these tenants after the lease's first 12 months.
Hamilton said his office knew of the violations, but, beyond notifying landlords several times that they must comply with the law, couldn't enforce it because of the limited staff. "If many tenants start filing complaints now, we'll need to hire at least four more staff members," he said.
Hamilton said many tenants may consider the ruling a chance to make "a windfall," even if they would have refused the offer of a two-year lease.
"Many landlords would be in a very tough spot when they try to disprove the complaints," Hamilton said. "But I'm certainly not going to feel sorry for them. We told them (about the law) several times."