Subject
title
Adoption of an Ordinance to Amend Chapter 18 of the Rockville City Code, entitled “Rental Facilities and Landlord-Tenant Relations”
end
Department
Housing and Community Development
Recommendation
Staff recommends that the Mayor and Council introduce and adopt the proposed Ordinance amending Chapter 18 of the Rockville City Code, entitled “Rental Facilities and Landlord-Tenant Relations” (Attachment A). As such the following actions should be taken: the Ordinance should first be introduced, and then a motion to waive the layover period should be made. If the motion to waive the layover period is approved by six affirmative votes, a motion to adopt the Ordinance may then proceed. The proposed effective date is January 1, 2027.
Change in Law or Policy
Upon its effective date of January 1, 2027, the draft City Code Chapter 18, Rental Facilities and Landlord-Tenant Relations will significantly modify the laws that govern landlord obligations and tenant rights for residential rental facilities.
Discussion
Background
In Fall 2024, a comprehensive rewrite of City Code Chapter 18, Rental Facilities and Landlord-Tenant Relations was identified as a key action in the city’s Housing Strategies Work Plan as a way to further housing stability. Additionally, safe, decent housing was previously identified as a top need in the Human Services Needs Assessment, completed in 2024.
While supply and subsidy strategies can help to improve housing affordability, only stability strategies will ensure fair and equal treatment of tenants. As the city experiences a growing number of tenants, stability strategies will help to reduce displacement and ensure that everyone in the community can reap the benefits of the city’s growth and investments.
Research and engagement for the Chapter 18 rewrite commenced in Spring 2025. The goals for the rewrite were established as follows:
• Provide clarity on existing code elements.
• Consider alignment with surrounding jurisdictions’ codes.
• Improve housing stability and opportunities for tenancy agency.
• Require greater transparency for tenants.
• Ensure alignment with the state of Maryland law.
• Review local and national best practices.
• Better connect data collection and city goals.
Changes to Draft Ordinance
Based on Mayor and Council feedback at the May 18, 2026 meeting, the following changes have been made to the draft ordinance:
• Sec. 18-1: Added definitions for “written notice” and “tenant organization.”
• Sec. 18-21(5): Clarified baseline of the Enhanced Inspections Program.
• Sec. 18-80: Clarified that (b)(1)(a) is only applicable unless there is a valid exception as described in Maryland state law. This part of the code iterates that, as permitted by Maryland state law, the Landlord-Tenant Affairs Commission to award up to three times the extra amount charged, plus reasonable attorney fees, if a landlord imposes a security deposit in excess of the equivalent of one month rent per dwelling unit.
• Sec. 18-115(e): Clarified that tenants are required to provide access to city inspectors to conduct properly noticed inspections.
• Sec. 18-126(3): Changed the number of chairs required in a hotel room from two chairs to one chair.
• Sec. 18-146(1): Changed language to allow landlords to increase rents during a two-year lease, but clarified that the rent increase must be disclosed in the lease prior to entering into the lease.
• Sec. 18-148: Added a definition for “non-public competitor data,” in relation to price coordination and algorithmic devices.
• Sec. 18-149(a): Changed that a landlord must provide a tenant the tenant’s entire rental payment history within seven days of the tenant’s written request to seven business days.
• Sec. 18-149(c): Expanded the allowance for a landlord to terminate a lease when a tenant no longer meets the income requirement to also include other income-restricted units. Including this provision will allow residents in income-restricted units to have the option of a lease term longer than one year.
• Sec. 18-163(a)(1): Added a provision stating that landlords may not charge a fee for payment of rent, with the exception of a credit card processing fee and check bounce fee.
• Sec. 18-163(a)(2): Added an exemption for introducing utility cost recovery structures or ratio utility billing.
• Sec. 18-163(a)(4): Increased the number of days from 45 days to 120 days for landlords being prohibited from charging a fee for any charge for which the landlord failed to request from the tenant.
• Sec. 18-163(a)(5): Added language to allow fees for valet trash service, if valet trash service is permitted by law and regular trash service is provided as an option to the tenant.
• Sec. 18-163(c)(10): Altered language regarding the ability to charge a fee for certain storage units: “Secure storage unit accessible only by tenant. A landlord must not assess or collect from the tenant of a dwelling unit any fee or charge for storage located within or attached to or associated with the dwelling unit. A landlord is permitted to assess or collect a fee for storage units generally accessible for use by all tenants and as additional storage.”
• Sec. 18-178(b)(3)(d): Deleted language “which meets the criteria set forth by the City” to improve clarity as to what standards a landlord and tenant must meet when creating an alternative temporary relocation assistance agreement.
• Sec. 18-178(b)(7)(b): Changed “formal eviction” to “execution of a warrant of restitution” to improve clarity.
• Sec. 18-178(c)(2): Added “the tenant’s failure to uphold their responsibilities under the lease has led to the property becoming not fit for occupancy” to situations where a landlord is not required to provide permanent relocation assistance. Both temporary and permanent relocation assistance sections now include this language.
• Sec. 18-180(b): Added an exemption for third-party websites to the disclosure of all mandatory fees whenever a price is advertised or disclosed.
• Sec. 18-180(c): Added that the landlord must disclose estimated utility costs “to the best of their ability,” recognizing that in situations where the tenant paid the utility directly, getting that information may not be feasible for the landlord.
• Article V: Changed “Department of Housing and Community Development” to “City Manager” throughout the article to be consistent with the rest of the chapter.
The Mayor and Councilmembers asked questions that staff was unable to provide complete answers to during the meeting, as well as comments that staff wanted to provide more thorough responses to, provided below:
• Sec. 18-1: Councilmember Van Grack commented that the Definitions section is not enumerated. However, this is consistent with other chapters of the city code, and thus no changes were made.
• Sec. 18-115(e): The city has discretion regarding enforcement, so if a landlord were attempting to enforce the tenant’s breach of lease for not providing entry, the city takes that into consideration.
• Sec. 18-115(g): Councilmember Van Grack commented that it may be useful to clarify the “specified period of time” that landlords are provided to correct a code violation. To clarify, a Notice of Violation already includes that specified period of time.
• Sec. 18-117(a): Mayor Ashton asked whether a landlord who stops renting but still has an active rental license would still have to notify the City Manager when selling the property. Staff would like to clarify that even if the landlord does not notify the City Manager, the city would still learn about the sale during the rental license renewal process.
• Sec. 18-126(1-2): Mayor Ashton asked that the code require fresh linens to be provided, but not every day. Staff would like to clarify that the reason Sec. 18-126(1) and (2) are recommended for deletion is because it is very difficult to enforce.
• Sec. 18-146(16): Both Councilmembers Jackson and Van Grack asked for clarification the definition of “unreasonably withheld” in reference to permission to sublease. “Unreasonably withheld” is defined by case law and, for example, “valid objections include concerns about the subtenant’s ability to pay rent or intended use of the premises.” This is a standard consistent with state, county, and other local laws.
• Sec. 18-146(16): Mayor Ashton asked for more information about how screening tenants works in subleasing situations. Per current city code, tenants must receive written permission from the landlord to sublease. As a part of this process, the landlord may request a subtenant screening before approving the sublease arrangement. The original tenant remains responsible to the landlord.
• Sec. 18-146(18): Mayor Ashton asked for clarification as to what reasons for early lease termination are not already provided for in state law. Below is a list of all the reasons in the proposed ordinance, the only ones in the current code being the first and last, and their relationship with state law. Note that city code would allow the lease to provide that in the event of termination for such causes, the tenant could still be liable to pay a reasonable termination charge not to exceed one month's rent.
o “An involuntary change of employment from the Washington metropolitan area.”
§ State law does not already provide for this reason. However, state law similarly allows early lease termination if an active service member receives a change of assignment. The active service member can either be the tenant or the tenant’s spouse.
o “The dwelling unit being deemed not fit for occupancy for 60 days by the City Manager not caused by the tenant, or as a result of the landlord’s failure to correct a violation of applicable law that adversely affects the immediate health and safety of the tenant in the tenant’s unit or a common area available for use by the tenant, within 30 days after being ordered to do so by the City Manager.”
§ State law does not already provide for this reason.
o “The landlord’s rental license has been suspended or revoked for reasons related to the tenant’s unit within the previous 60 days.”
§ State law does not already provide for this reason.
o “The landlord has failed to make certain repairs required to correct a violation that affects the health and safety of the tenant.”
§ State law does not already provide for this reason.
o “Domestic violence against the tenant or the tenant’s dependent.”
§ State law allows victims of abuse to end their lease early. To do so, the tenant must give the landlord written notice by first-class mail or hand delivery. The notice must include documentation that the tenant is a victim of abuse and the date the tenant intends to leave. The tenant has up to 30 days to vacate the leased premises from the date provided in the written notice. Documented proof of abuse may include a protective order; peace order; or a report by a qualified third party, such as a physician, psychologist, social or caseworker, or and advocate from a domestic violence program. Tenants are only responsible for rent only for the time following the tenant providing notice of an intent to vacate until the tenant vacates the leased premises, up to a maximum of 30 days.
o “Death of a primary wage earner.”
§ State law does not already provide for this reason.
o “Change in disability status” and “entry into an inpatient substance abuse or mental health treatment program.”
§ State law does not already provide for this reason. However, state law allows early lease termination with a maximum liability not to exceed two months’ rent for tenants who can provide certification from a physician or psychologist that the tenant is no longer able to live at the leased premised because the patient has a medical condition that 1) substantially restricts the physical mobility of the patient within, or from entering and exiting, the leased premises; 2) requires the patient to move to a home, facility, or institution to obtain a higher level of care than can be provided at the leased premises; or 3) is a mental disorder that: i) causes the continued habitation of the leased premises to be unfeasible or unsustainable for the patient; or ii) requires the patient to move to a home, facility, or institution to obtain a higher level of care than can be provided at the leased premises.
o “For other reasonable cause beyond tenant’s control.”
§ State law does not already provide for this reason.
• Sec. 18-148: Councilmember Van Grack asked staff to look further into the lawsuits brought over algorithmic rent pricing restrictions. Staff can share that all cases they have reviewed have been settled outside of court or are still pending. All lawsuits suing localities have been brought by RealPage, and the city has a testimony from RealPage with their input on the draft ordinance. Staff have addressed their comments by adding a definition for “non-public competitor data.”
Impact Statements
Impact statements for Montgomery County Bill 8-26, Landlord-Tenant Relations - Prohibition Against Price Coordination and Rent-Setting Algorithms, which is largely similar to the proposed language for City Code Chapter 18, Rental Facilities and Landlord-Tenant Relations, can be found in Attachment D.
Equity
Staff anticipate the action would have a small positive impact on racial equity and social justice due to the general expansion of tenant rights and impact on housing stability.
Research has shown a myriad of benefits associated with housing stability, including better mental and physical health due to less stress and the traumatic experience of being evicted, economic security because households are more likely to be able to keep living in the community where they are already working, educational outcomes since children do not have to move schools and disrupt their learning environment, social connections due to households staying in one place for longer, and community diversity because the families that are first to be displaced are too often disproportionately Black and Hispanic. Conversely, the costs of housing insecurity can be significant. Specifically, among young children, housing insecurity is associated with poor health, lower weight, and developmental risk.
In Rockville, tenants are disproportionately of historically marginalized racial or ethnic groups. Most significantly, only 11.4% of total housing units in the city are occupied by Black or African American households, but nearly 20% of renter housing units are occupied by Black or African American households.
Table 1. Percent of All Households and Renter-Occupied Households by Race and Ethnicity, City of Rockville (2024)
|
Race or Ethnicity |
All Households |
Renter-Occupied Households |
|
Total |
100% |
45.1% |
|
Asian |
24.7% |
27.8% |
|
Black or African American |
11.4% |
19.8% |
|
Hispanic or Latino |
9.0% |
12.0% |
|
White |
52.9% |
39.4% |
|
Some Other Race |
3.5% |
5.3% |
|
Two or More Races |
7.2% |
6.9% |
Source: U.S. Census, 2024 ACS 5-Year Estimates S2502
Additionally, the median income of renters is about $100,000 less than homeowners: $86,690 versus $186,717. As of 2024, 53% of Rockville renters were considered housing cost-burdened, paying more than 30% of their income for housing, and over 20% are considered severely housing cost-burdened, paying more than 50% of their income for housing. Hispanic or Latino, “Some Other Race,” mixed-race, and Black households are disproportionately housing cost burdened (Figure 1), so would stand to benefit the most from policies like banning algorithmic rent pricing and restricting fees that would potentially lessen financial burden.
Figure 1. Gross Rent as a Percentage of Household Income, By Race (2021)
Source: U.S. Census, 2021 ACS 5-Year Estimates B25070
The city does not collect data on landlord demographics, so whether or not changes to city code may disproportionately impact certain racial or ethnic groups of landlords cannot be fully analyzed.
Environment
There are no significant environmental impacts anticipated.
Economy
The action item is expected to have a neutral impact on the economy.
The additional requirements placed on landlords may result in fewer landlords, particularly small landlords, choosing to rent in Rockville, which would have a negative impact on the city’s economy. On the other hand, existing landlords with many or large properties may need additional staff capacity to comply with the new code, especially when first implementing the changes into regular operations and protocols. This would create economic activity, although it could also put upward pressure on rents. Additionally, if the code is seen as too arduous for prospective landlords to uphold, developers may target investments elsewhere, resulting in foregone economic growth.
For tenants, the additional protections afforded to them in the proposed code may positively impact the local economy by improving housing stability. Individuals and households could focus more energy on non-housing related matters, such as education or job training, and divert funds from junk fees to other household needs, improving overall quality of life and economic stability. Transparency measures may also create a more competitive rental marketplace, resulting in slight downward pressure on rents or more favorable lease terms to tenants.
Mayor and Council History
Housing is one of the Mayor and Council’s five focus areas. In June 2024, a high-level briefing was presented outlining the city’s housing crisis and policy landscape. Later in 2024, there were three work sessions on the city’s housing strategies, during which updating City Code Chapter 18, Rental Facilities and Landlord-Tenant Relations was approved by the Mayor and Council as one of the strategies.
The following work sessions related to Chapter 18 were held previously:
• June 16, 2025 - An initial work session specifically related to transparency. During that work session, staff presented preliminary recommendations on data collection and reporting requirements, lease requirements, and other posting requirements.
• November 10, 2025 - During a work session on rental licensing inspections, staff recommended an enhanced inspections program that does not require codification in the updated chapter.
• December 8, 2025 - Staff presented proposed changes to current code as well as new policies related to algorithmic rent pricing, court costs and legal fees, fee transparency and restrictions, guarantor requirements, and repair and deduct.
• February 23, 2026 - Staff provided follow-up research to questions raised at the December 8 work session and proposed new policies related to background check restrictions, relocation assistance, and penalties.
• May 18, 2026 - Mayor and Council reviewed the initial draft of the Chapter 18 ordinance, asked questions, and provided feedback.
Feedback from previous work sessions is reflected in the proposed ordinance, in addition to stakeholder input.
Public Notification and Engagement
See Attachment B for the Community Engagement Report and Attachment C for public comments and correspondence.
Next Steps
Following the adoption of the proposed ordinance, staff will work with the City Attorney’s Office to develop and promulgate pertinent regulations. In addition, staff will create a Landlord-Tenant Handbook and other educational materials that will allow both landlords and tenants to clearly understand their rights and responsibilities as well as city resources.