February 8, 2023
Morgan T. Dilks
The term “landlord” has gotten a bad rap over the past few years. Throughout the Covid-19 Pandemic, a lot changed in the real estate leasing environment. In the beginning of the Pandemic, people quickly lost jobs and income streams, leading Governor Hogan to issue a temporary moratorium on evictions. This made sense in that moment – after all, we can’t have a significant portion of the population displaced due to circumstances entirely outside their control.
People left their offices en masse, many of whom have still not returned (and may never return) to a routine of five days per week present in the office. This has had the effect of leaving office space empty, businesses trying to decide whether to renew their leases, and a significant climate shift in the practices of commercial landlords which have been commonplace for decades.
As part of the Legislature’s response to the Pandemic, new protections were put into place in order to give tenants every opportunity to remain in their leased residences as long as possible should they no longer be able pay their rent. Though abuse of these protections certainly occurs, greater good is brought about by allowing people to remain in homes while the legal process plays out – even if this takes longer today than it did before the Pandemic.
The problem with the Legislature’s protections, noble intentioned as they may have been, is that there is no carve-out for landlords leasing commercial space. The laws intended to affect a public policy of keeping residential tenants in place longer apply with equal force to commercial tenants. The practical effect is that businesses, who do not rely on the space they rent to put a roof over the heads of their owners or employees, receive protections that to not benefit the public welfare.
Take, for example, the “10-Day Notice” provision in Failure to Pay Rent cases which took effect on October 1, 2021. That law, Real Property, § 8-401(c)(1), requires that a notice be sent to a tenant at least ten days in advance of filing a failure to pay rent case. Anecdotally, as a former business owner myself, I know firsthand that if my business did not pay rent on a given month, it would have been extremely noticeable in our bank account. Businesses do not need a notice advising that they failed to pay their rent, and many commercial lease default provisions require contractual notice regardless. Further, commercial tenants enjoy the same right to redeem their lease as residential tenants by paying the outstanding rent due, rendering the 10-Day Notice in the commercial leasing world even more superfluous.
If a commercial landlord’s failure to pay rent case proceeds to trial, and the court grants possession of the property (eviction) to the landlord, the landlord then follows the same procedures to obtain assistance from law enforcement in removing the tenant from the property that a residential landlord follows. The landlord files a Petition for Warrant of Restitution, and if granted by the court, contacts the sheriff’s department (or Constable’s Office in Baltimore County) to schedule an eviction.
As a matter of public policy, it makes sense that a residential landlord should not be able to lock an individual out of the house where they live, with all of their belongings remaining inside, without the assistance of county law enforcement. However, in the commercial leasing space, if a landlord attempts to evict a business that, despite ample notice, has not removed its personal property from the leased
space, the sheriff or constable still will not proceed with the eviction, and the landlord must, at its own expense, remove the business’s personal property (inviting a host of potential litigation issues).
While the protections for residential tenants that arose during the Pandemic are valuable to the public welfare, they should not extend to cover commercial tenants. There is no sufficient public policy consideration to protect businesses using commercial space to generate revenue in the same way we protect tenants using residential space to live. Now that we have had the time and opportunity to review the policy changes implemented to protect the public welfare, it’s time to make revisions – revisions which relieve commercial landlords of the burden to overcome cumbersome protections for businesses that were created to protect individuals.
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