In a 5-2 decision this week, the Maryland Court of Appeals ruled in favor of the landlord of Baltimore's Copycat building, saying he could evict tenants without having a rental license.
The verdict ends a tense conflict between tenants of the artists' community and the building managers, who pursued legal action against some residents during the coronavirus pandemic when they stopped paying rent. Many are artists or entertainers whose prospects dried up last year after the coronavirus swept into Maryland and forced people to retreat from public life.
But with state and federal restrictions on some evictions as a result of the public health crisis, Charles Lankford, who owns the Station North apartment and studio building, relied on tenant holding over court to remove residents from the property. With this alternative legal route, a landlord can remove a tenant whose lease has expired, without having to provide a reason - such as failure to pay rent - for not extending or renewing the lease.
Legal experts and tenant rights advocates called the decision a major blow to Baltimore's licensing law, which was designed to protect tenants from unsafe or predatory housing conditions. It will become "settled law," they said, unless the Maryland legislature takes it up in this year's General Assembly session.
Lankford's case, filed in August 2020, was complicated by his lack of a rental license. Per Baltimore City law, landlords can neither charge nor collect rental payments without licenses, which they must obtain for one-, two- or three-year periods depending on the property. The licenses are meant to ensure that properties are safe to inhabit.
The tenants fought their eviction and were successful at the district court level. Yet, when attorneys motioned to dismiss the case, a judge denied the motion and sided with Lankford, determining that despite not having a license, he fulfilled all the other requirements for tenant holding over. However, the judge also declined to set an appeal bond - making it easier for defendants to take the case to a higher court.
At the appeals court level, the majority said even unlicensed property owners have certain rights.
"There is no reason for this Court to judicially alter the balance between a property owner's right to repossess the owner's property after the expiration of a tenancy, and a tenant's right to safe and habitable living conditions during a residential tenancy," Judge Brynja M. Booth wrote in the decision. "We will not preclude the availability of a statutory remedy enabling a landlord to seek repossession of the landlord's property interest at the conclusion of the tenancy."
Dissenting judges and tenant rights advocates said the decision essentially renders useless the city's licensing law and disincentivizes property owners from acquiring them.
"This loophole presents an obvious risk of danger to tenants, as unlicensed landlords may now use tenant holding over actions ... to recover rent and possession of property and lease the property again, with little incentive to eliminate hazards on the premises and obtain licenses," said Judge Shirley M. Watts in her dissenting opinion.
Watts encouraged lawmakers in the Maryland General Assembly to review the case and codify in state law the question of whether unlicensed property owners should be able to recover properties via tenant holding over actions in places where such licenses are required.
In Baltimore, the current licensing law went into effect in 2018 and tied existing license requirements to landlords' ability to collect rent. Rental properties have to be registered with the city's housing department and must be inspected by a licensed inspector before they can be leased.
The law was strengthened specifically to provide more protection to tenants and eliminate financial incentives for landlords to not comply with housing codes, said Zafar Shah, an attorney with the Public Justice Center's Human Right to Housing Project in Baltimore.
He called the court's decision an "earthquake" that could endanger current and future tenants and subject them to unsafe living conditions.
"It's basically giving the blueprint to landlords in Baltimore City, specifically, to avoid the regulatory objectives that the rental licensing law purports," said Shah. "The argument was never that landlords don't have the right to repossess their property - but how they do it."
Shah said the majority ignored Lankford's true motive, which was to intimidate tenants into paying rent despite the pandemic. He never intended to leave the units empty, Shah said, and continued advertising space and collecting payment from other tenants.
"The majority ... ignored the facts in front of court, which showed a duplicitous and intentional scheme to avoid regulation," Shah said. "And we've seen a lack of enforcement by city [housing] to enforce its license program. The city has really not taken any enforcement action."
Representatives from the city's Department of Housing and Community Development and its law department did not respond to requests for comment.
Herbert Burgunder III, Lankford's attorney, said the decision upholds a landlord's right to regain possession of properties.
"The Court recognized an important property right and affirmed our position as presented in the trial courts," Burgunder said in an email. "My client is hopeful that the former tenants that still occupy the apartments will respect the decision and promptly return possession to the property owner."
The court heard two cases from two different tenants, Christopher Walke and Indigo Null. Both had month-to-month leases at the Copycat and were told they would face legal action once they stopped paying rent.
Null, a photographer who also worked in the food industry prior to the pandemic and has lived in the Copycat building for several years, said Lankford communicated in emails and notices that the tenant holding over action would be used as a legal alternative during the eviction moratorium. The case felt like a retaliatory action for not paying, Null said.
"They are doing this to enforce the illegal payment of rent," Null said. "People here keep insisting they want an arts district. But they don't actually care about the artists making that culture."
In a statement, Douglas Nivens II, the Maryland Legal Aid attorney who co-defended the tenants, said licenses not only protect renters but also ensure safe and quality housing for all, no matter their income, race, ethnicity or gender.
"[We] will continue to prioritize informing and educating tenants of their rights," Nivens said Thursday. "This case does not hold us back from advising clients about when their place doesn't have a license."
The organization encouraged tenants to check on the status of their rental properties before signing leases as a way to prevent future evictions from unlicensed properties.