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3805
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MARVIN MANDEL, Governor
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Honorable Steny H. Hoyer
President of the Senate
State House
Annapolis, Maryland 21404
Dear Mr. President;
In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed Senate Bill
150.
This bill is intended to deal with the situation
where a landlord requires a deposit from a prospective
tenant and then fails to return part or all of it if a
lease is not ultimately consummated. The bill requires
that a landlord collecting a fee, other than a security
deposit, to return the fee not later than 15 days
"following the date of occupancy or the communication, by
either party to the other, of a decision that no tenancy
shall occur." It permits the landlord, however, to
retain up to $25 "for a credit check on the applicant and
other incidental expenses arising out of the
application", but requires the landlord to return "all
that portion of the fees not actually expended on behalf
of the tenant making application."
The purpose of the bill is a good one, but fails to
take account of some legitimate concerns of the landlord.
I understand that it was presented to the Landlord Tenant
Commission and rejected by that Commission. Certainly,
if a prospective tenant decides, after making application
for an apartment, not to enter into a lease, and gives
reasonably prompt notice of that decision, the Landlord
should be required to return any fees or deposit
collected by him, less any amount that he has actually
suffered in damage as a result of the application and
reneging. In other words, so long as the Landlord
suffers no damage by the prospective tenant's change of
mind, he should not become unjustly enriched.
This bill, however, requires the return of the fee
even where the prospective tenant fails to give
reasonable notice that he has changed his mind. At some
point, because of the prospective tenant's breach, the
landlord may suffer other than "out of pocket" expenses —
perhaps the loss of rent for a month or more. Under
Senate Bill 150, loss of rent, even if directly
occasioned by the prospective tenant's clear breach, may
not be retained.
After discussion with the sponsor of the bill, the
Consumer Protection Division of the Attorney General's
Office, and representatives of the apartment industry, I
believe that a better and fairer bill can be drafted and
passed. This bill, I fear, swings the balance of
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