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Key Takeaways
- Buildings 23+ years old (rolling exemption starting January 1st of the 23rd year)
- CPI-U + 3% or 6%, whichever is lower (5.7% for 2025-2026)
- 90 days written notice required
- Banking allowed up to 10% limit
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Overview of Montgomery County Rent Stabilization
Montgomery County, Maryland has a Rent Stabilization Law that limits how much landlords can raise rents each year. The law was enacted on July 20, 2023, and became effective on July 23, 2024. It is administered by the Department of Housing and Community Affairs (DHCA).
The rent stabilization law applies to all County-licensed residential rental units that are at least 23 years old, unless explicitly exempted. Buildings become subject to rent stabilization on January 1st of the 23rd year after the building was constructed.
Who Is Covered?
Montgomery County's rent stabilization law applies to all County-licensed residential rental units that are at least 23 years old. Exemptions include:
- New construction – Apartments less than 23 years old (rolling exemption)
- Certain municipalities – Gaithersburg, Rockville, Takoma Park, Barnesville, and Laytonsville have their own regulations
- Small landlords – Certain small landlord exemptions may apply
- Accessory dwelling units (ADUs)
- Facility-based housing
Rent Increase Limits
The rent cap is CPI-U + 3% or 6%, whichever is lower.
For July 1, 2025 through June 30, 2026, the maximum allowable rent increase is 5.7% (CPI-U of 2.7% + 3% = 5.7%, which is below the 6% cap).
Landlords must provide 90 days' written notice before implementing any rent increase.
Banking of Rent Increases
Banking is allowed in Montgomery County. If a landlord does not use the full allowable rent increase in a given year, the unused portion can be "banked" for future increases, up to a 10% limit.
Fair Return and Capital Improvements
Landlords may petition for rent increases above the standard cap for:
- Fair return petitions – If the standard cap does not provide a fair return on investment
- Capital improvements – Surcharges for major renovations or building upgrades
Tenant Rights and Remedies
If a landlord illegally raises the rent above the cap, tenants can:
- File a complaint with the Department of Housing and Community Affairs
- Take legal action to recover excess rent paid
- The County can enforce compliance and impose penalties
Resources
Important: This article is a high-level overview and does not constitute legal advice.
For specific questions about your situation, contact the appropriate Maryland agency.
Frequently Asked Questions
What is the rent cap for Montgomery County in 2025-2026?
The rent cap is CPI-U + 3% or 6%, whichever is lower. For July 1, 2025 through June 30, 2026, the maximum allowable rent increase is 5.7%.
When does a building become subject to Montgomery County rent stabilization?
Buildings become subject to rent stabilization on January 1st of their 23rd year after construction. This is a rolling exemption - a building constructed in 2002 became rent-stabilized on January 1, 2025.
What is banking in Montgomery County?
Banking allows landlords to defer unused rent increases for future use, up to a 10% limit. If a landlord doesn't use the full allowable increase, the unused portion can be 'banked' and applied later.
How much notice must my landlord give before raising rent?
Landlords must provide 90 days' written notice before implementing a rent increase. The notice must include the new rent amount, effective date, and calculation showing compliance with the cap.
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