Property management and landlord guide for Montgomery County

Why Montgomery County is different

Montgomery County offers steady rental demand near Metro’s Red Line, the I-270 corridor’s federal and life-sciences employers, and highly rated schools. It also regulates rentals more closely than anywhere else we work. Owners who miss a step, such as an unlicensed unit or a missing lease summary, can face fines and may be unable to take a tenant to court for unpaid rent.

1. Get a rental license before you advertise

Before a single-family home, townhome, condo, accessory dwelling unit or apartment can be rented or even advertised in Montgomery County, the owner needs a rental housing license from the Department of Housing and Community Affairs (DHCA). Licenses run July 1 to June 30 and must be renewed every year. A landlord without a license can’t pursue a tenant for unpaid rent in District Court and can be cited.

The cities of Rockville, Gaithersburg and Takoma Park issue their own rental licenses with their own rules, so the address determines which office you deal with.

2. Rent stabilization

Montgomery County’s rent stabilization law (Bill 15-23) limits annual rent increases on most licensed rental units that are at least 23 years old, so for 2026 that means units built in 2003 or earlier, unless an exemption applies.

Rule	Details
Annual cap formula	The regional consumer price index (CPI-U) plus 3%, or 6%, whichever is lower.
July 1, 2026 – June 30, 2027	CPI-U is 2.2%, so the maximum allowable increase is 5.2%. (July 2025 – June 2026 was 5.7%.)
How often	No more than one increase in any 12-month period.
Notice	Written notice of any rent increase at least 90 days in advance, using the county’s required format.
Exempt units	Newer buildings and other exempt units aren’t capped, but the county asks owners to stay within the Voluntary Rent Guideline, 3.3% as of March 2026.
Takoma Park	Has its own, separate rent stabilization program.

3. County lease requirements

• Two-year lease offer: landlords must offer an initial two-year term, and a two-year term at each renewal, unless they have reasonable cause, which must be explained in a written statement attached to the lease. The tenant may accept or decline.
• Lease summary: every lease must include the DHCA Lease Summary, a plain-language overview of key terms and tenant rights.
• Model leases and handbook: DHCA publishes model leases that meet state and county law, and landlords must provide its Landlord-Tenant Handbook information.
• Criminal history screening: the county limits when and how criminal background can be used, with a required addendum to the rental application.
• Ending a lease: if you won’t renew, the tenant must get written notice of nonrenewal at least 60 days before the lease ends.

4. Maryland law that applies statewide

Rule	What it means for owners
Security deposit	No more than one month’s rent for leases since October 1, 2024, with limited exceptions. A landlord can’t require more than the deposit plus first month’s rent before move-in.
Deposit return	Within 45 days after the tenancy ends, with interest and an itemized list of any deductions. Missing the deadline exposes the owner to penalties.
Late fees	Capped at 5% of the late rent.
Unpaid rent	A written 10-day notice of intent to file must be given before filing a failure-to-pay-rent case in District Court.
After a judgment	At least 7 days must pass between a judgment for possession and executing the warrant of restitution.
Required with every lease	The current Maryland Tenants’ Bill of Rights, a receipt for the security deposit, and landlord or agent contact information.
Homes built before 1978	Must be registered with the Maryland Department of the Environment, renewed every year, and pass a lead risk-reduction inspection at every change of tenant, unless certified lead-free.
Selling a rental	Tenants in properties with 1–3 units who have lived there at least 6 months get a right of first refusal before the property is sold to someone else.

Evictions in Montgomery County

Eviction cases are heard in the District Court of Maryland, which has locations in Rockville and Silver Spring. For unpaid rent, the owner must first give a 10-day written notice of intent to file, and the property must be properly licensed. After a judgment, at least 7 days must pass before the sheriff can carry out the warrant of restitution. For lease violations or the end of a lease, separate notice periods apply. Throughout, the landlord can’t lock out the tenant or remove their belongings.

Buying or selling an investment property here

• Model rent stabilization: if the unit is 23 or more years old, project rent growth at the county cap, not the market rate.
• Budget for compliance: the annual license, periodic inspections and, for homes built before 1978, Maryland lead registration within 30 days of buying and a lead inspection at every turnover.
• Plan sales around the tenant: tenants in 1–3 unit properties who have lived there 6 months have a right of first refusal, which adds steps and time to a sale.

How DNY Property Management helps Montgomery County owners

Communities we serve

Frequently asked questions

How much can I raise rent in Montgomery County in 2026?

For units covered by rent stabilization, generally rentals 23 or more years old, the maximum increase from July 1, 2026 to June 30, 2027 is 5.2%, with no more than one increase per 12 months and 90 days’ written notice. Exempt units are encouraged to stay within the 3.3% Voluntary Rent Guideline.

Do I need a license to rent my condo or house in Montgomery County?

Yes. You need a rental housing license from Montgomery County DHCA before you rent or advertise, renewed every year. Properties in Rockville, Gaithersburg and Takoma Park are licensed by those cities instead.

Do I have to offer a two-year lease?

Yes. Montgomery County requires landlords to offer a two-year term at the start and at each renewal unless they have reasonable cause, which must be explained in writing. Tenants can choose a shorter term.

What is the maximum security deposit in Maryland?

One month’s rent for most leases signed since October 1, 2024. It must be returned with interest within 45 days after the tenancy ends.

Can a tenant buy my rental if I sell it?

Under Maryland law, tenants in properties with three or fewer units who have lived there at least six months have a right of first refusal, meaning a chance to buy before the property goes to another buyer. Certain transfers, such as to family members, are exempt.