Sec. 29-58. Rent increases – in general; vacant units; and limited surcharges for capital improvements.
Montgomery County, Md., Code § 29-58 (2026)
Sec. 29-58. Rent increases – in general; vacant units; and limited surcharges for capital improvements.LinkCopy Citation
(a)
In general. Except as provided under subsection (b), upon a lease renewal or new lease agreement, a landlord must not increase the rent of a regulated rental unit to an amount greater than:
(1)
the base rent; plus
(2)
the rent increase allowance under Section 29-57; plus
(3)
any banked amount; and
(4)
does not exceed 10 percent of the base rent.
(b)
Troubled or at-risk properties. Subject to Method (2) regulations adopted by the Director, a regulated unit located in a property designated by the Department as “troubled” or “at risk” under Section 29-22(b) must not increase rent in excess of an amount the Director determines necessary to cover costs required to improve habitability.
(c)
Rent increase – vacant unit. Subject to Method (2) regulations, the Director must determine the allowable annual rent increase for a regulated unit that returns to the market for rent after being vacant for more than 12 months with no active lease, either by a written or oral agreement.
(d)
Limited surcharge for capital improvements. Subject to subsection (e), the Director must grant a landlord’s petition to add a surcharge to the amount permitted under subsection (a) if, in accordance with Method (2) regulations, the Director determines:
(1)
the surcharge is limited to an amount necessary to cover the costs of capital improvements to the regulated unit, excluding the costs of ordinary repair and maintenance;
(2)
the surcharge does not take effect until after the capital improvements are completed;
(3)
if the capital improvements are for all rental units within the building, the surcharge:
(A)
is divided equally among the units;
(B)
is prorated over at least 96 months; and
(C)
does not exceed 20 percent of the base rent;
(4)
if the capital improvements apply only to certain regulated rental units within the building, the surcharge:
(A)
is divided equally among the affected units;
(B)
is prorated over at least 60 months; and
(C)
does not exceed 15 percent of the base rent;
(5)
the surcharge for each unit ends once the costs of the capital improvements, including any interest and service charges, have been recovered by the landlord;
(6)
the capital improvements would protect or enhance the health, safety, and security of the tenants or the habitability of the rental housing;
(7)
if the capital improvements would result in energy cost savings:
(A)
the savings would be passed on to the tenant; and
(B)
either:
(i)
the improvements would result in a net savings in the use of energy in the building; or
(ii)
the improvements are intended to comply with applicable law;
(8)
the capital improvements are depreciable under the federal Internal Revenue Code;
(9)
the applicant has certified to the Director the costs of the capital improvements, including any interest and service charge; and
(10)
the applicant has certified to the Director that required governmental permits and approvals have been granted.
(e)
Surcharge – additional requirements.
(1)
A landlord must maintain, and must make available to a tenant upon request, all plans, contracts, specifications, and permits related to any capital improvements for which a surcharge has been granted.
(2)
Immediately upon the completion of capital improvements under this Section, a landlord must permit the return to affected rental units of any tenants displaced due to the improvements.