County Council for Montgomery County v. Investors Funding Corp.

• Decision Date: 04 December 1973
• Docket Number: No. 282,282
• Parties: COUNTY COUNCIL FOR MONTGOMERY COUNTY, Maryland v. INVESTORS FUNDING CORPORATION et al.
• Court: Maryland Court of Appeals

Page 403

270 Md. 403

312 A.2d 225

COUNTY COUNCIL FOR MONTGOMERY COUNTY, Maryland v. INVESTORS FUNDING CORPORATION et al.

No. 282.

Court of Appeals of Maryland.

Dec. 4, 1973.

William J. Chen, Jr., Asst. County Atty. (Richard S. McKernon, County Atty., Alfred H. Carter, Deputy County Atty. and Stephen P. Johnson, Asst. County Atty., Rockville, on the brief), for appellant.

Joseph S. Casula, County Atty., Glenn T. Harrell, Jr. and Nelson M. Oneglia, Associate County Attys., Upper Marlboro, Md., on the brief, for Prince George's County, amicus curiae.

David Huddle, Chevy Chase (William P. Daisley and Michael C. Blackstone, Chevy Chase, on the brief), for appellees.

Argued May 15, 1973 before MURPHY, C. J., and BARNES, McWILLIAMS, SMITH and DIGGES, JJ.

Reardgued Oct. 10, 1973 before MURPHY, C. J., and BARNES, McWILLIAMS, SINGLEY, SMITH, DIGGES and LEVINE, JJ.

MURPHY, Chief Judge.

This appeal draws into question the legality of Chapter 93A of the Montgomery County Code (1965, as amended), entitlted 'Fair Landolord-Tenant Relations,' ¹ Enacted as Bill 19-71 by the County Council for Montgomery County (the Council) on June 13, 1972, Chapter 93A (the Act) undertakes in four separate articles to comprehensively regulate the apartment rental business and its concomitant landlord-tenant relationships and activities in Montgomery County. Investors Funding Corporation, together with a number of other corporations and individuals enaged in the business of renting dwelling units in Montgomery County (the landlords), sought a declaratory decree in the Circuit Court for Montgomery County that the Act was null, void and of no effect because in a number of designated particulars, it violated the state and federal constititions, and was otherwise beyond the power of the Council to enact. The court (Moore, J.) concluded in an extensive oral opinion that while the Council possessed the basic power under the County's Home Rule Charter to enact Chapter 93A, various of its provisions were illegal, unconstitutional or otherwise nugatory as being in conflict with the public general laws of the State. From a decree so declaring, both the landlords and the Council appealed.

In enacting Chapter 93A, the Council made a number of 'Legislative Findings' which it set forth in § 93A-1 of Article I of the Act, viz., that: 'there is often unuqual bargaining power between landlords and tenants; that the common law principles pursuant to which leases are interpreted as grants of right of possession rather than mutual and dependent covenants evolved in an agricultural setting and are ill-suited to the modern residential setting of this urban County; that in order to facilitate fair and equitable arrangements, foster the development of housing which will meet the minimum standards of the present day, and promote the health, safety and welfare of the people, it is necessary and appropriate that the County provide a commission and office to determine certain minimum rights and remedies, obligations and prohibitations, for landlords and tenants of certain kinds of residential property.' The underlying 'purposes and policies' of the Act are set forth in § 93A-2(b):

'(i) to simplify and clarify the law governing the rental of dwelling units;

(ii) to encourage landlords and tenants to maintain and improve the quality of housing in this County;

(iii) to assure fair and equitable relations between landlords and tenants; and

(iv) to revise and modernize the law of landlord and tenant to serve more realistically the needs of an urban society developing within Montgomery County, Maryland.'

Section 93A-3 provides that, subject to the public general laws of the State, the Act 'shall regulate and determine legal rights, remedies and obligations of the parties and beneficiaries of any rental agreement, concerning any multi-family structure containing two or more rental dwelling units within this County wherever executed.'

The Office of Landlord-Tenant Affairs is created by § 93A-6 of Article II of the Act and placed under the immediate supervision of an Executive Director; the Office is designated as a principal office of the executive branch of the Montgomery County government, and is vested with primary authority for implementing the Act's provisions. The Executive Director is empowered by § 93A-7 'to initiate, investigate and conciliate any violations of this Chapter or any complaints filed hereunder, and to investigate, grant deny, revoke, suspend, refuse or renew licenses hereunder.' A Commission on Landlord-Tenant Affairs is created by § 93A-8 of Article II; it is comprised of nine members appointed by the County Executive, three of whom are to be selected from nominations made by organizations representing landlords; three from nominations made by organizations representing tenants; and three members of the public at large who are neither tenants nor landlords. The Commission's powers are delineated in § 93A-9; among them is the power to enforce the provisions of the Act 'throught any appropriate means; including but not limited to . . . (ii) the imposition of a civil penalty, not in excess of $1,000, for the violation of any provision of this Chapter, (iii) the imposition of an award of money damages against a landlord or tenant for the benefit of either as may be provided for in this Chapter, (iv) the ordering of repairs by a landlord or tenant, and (v) the investigation and conciliation of any violations of this Chapter or any complaints filed hereunder and the investigation of any matter relating to any license to conduct or operate a rental facility.'

Article III of the Act, entitled 'Licensing of Rental Facilities,' provides in § 93A-16 that after the Act's effective date (September 19, 1972), 'it shall be unlawful to conduct or operate within Montgomery County a rental facility without having first applied for or obtained a license to operate or conduct said rental facility . . ..' ² Failure to comply with the licensing requirements is declared a misdemeanor by § 93A-17, punishable by a fine not to exceed $1,000 and costs for each offense. Landlords of rental facilities are required by § 93A-18 to apply to the Office of Landlord-Tenant Affairs for licenses within twenty days after the Act's effective date. Provision is made for the issuance of temporary and conditional licenses pending inspection of rental facilities and compliance with all applicable laws; and the Executive Director is vested with authority to determine whether the rental facility for which licensure is sought conforms with the governing law. Section 93A-19 provides that an annual license fee per dwelling unti shall be established by the County Executive by written regulation 'in an amount sufficient to pay the costs incidental to the administration of this Chapter and to make this Chapter self-sustaining.' Section 93A-21 authorizes the Executive Director to cause biennial inspections to be made of licensed rental facilities to determine whether they comply with all applicable laws; if the rental facility fails so to comply, the license 'may be subject to revocation or other remedial action as determined by the Executive Director.' Section 93A-24 authorizes the Executive Director to revoke, deny or suspend licenses for failure to eliminate violations of applicable laws; persons aggrieved by the action of the Executive Director may file an appeal to the Commission which is required 'by order, (to) either reverse, modify or affirm the action appealed and shall issue its findings, opinion, and order in writing and provide a copy thereof to the person aggrieved.' The Commission's 'final action' is appealable to the Circuit Court for Montgomery County. § 93A-25.

Article IV of the Act is entitled 'Landlord-Tenant Obligations.' Section 93A-26 mandates that all leases or agreements for the occupancy of a dwelling unit in a rental facility located in Montgomery County must comply with a number of specified '(l)ease requirements'; included among such requirements is that leases be executed in duplicate (and thus be in writing); that they be for two-year initial terms, at the tenant's option; that they contain no authorization for confession of judgment for rent due; and that such leases provide a guarantee that no retaliatory action will be taken by the landlord for any bona fide complaints made by the tenant to designated persons and agencies. Sections 93A-29 and 30 outline a number of 'obligations' with which tenants and landlords are required to comply. Sections 93A-31 through 33 deal with complaints filed with the Executive Director of 'defective tenancies' ³ and lease agreement violations.

The Executive Director is required by § 93A-34 to investigate all such complaints to determine 'whether a violation of this Chapter has occurred or a defective tenancy exists'; if he makes an affirmative finding, he is required by § 93A-36 to undertake conciliation of the complaint, and to notify the Commission if his efforts are not successful. Section 93A-40 deals with hearings before the Commission to determine whether the provisions of the Article have been violated. Where the Commission finds that the landlord has caused a defective tenancy, § 93A-43(b) specifies that 'all affected tenants' may be entitled to immediate termination of their leases, to return of their security deposits and of certain rental monies previously paid to the landlord, to an award of damages from the landlord sustained as a result of the defective tenancy, not to exceed $1000, and to an amount to be paid by the landlord equivalent to a reasonable expenditure adequate to obtain temporary substitute rental housing in the area. Where the Commission finds that a tenant has caused a defective tenancy, the landlord, by § 93A-43(c), may be entitled to terminate the lease, and to an award of damages from the tenant sustained as a result of the defective tenancy, not exceeding $1000. The Commission's...