A landlord with a single rental condo in Silver Spring sits down to draft a renewal letter, looks up the rent cap, and finds three different numbers in the first three results. One blog says 6 percent. Another says 5.7 percent. A third says the cap doesn’t apply because the building is too new. Confusion like this is exactly why the calls into Grant, Riffkin & Strauss, P.C. about Montgomery County rent stabilization picked up sharply once landlords started receiving complaints filed with the county’s Office of Rent Stabilization. The rules are knowable, but they’re not where most owners are looking for them.
The law most people still call the HOME Act passed in 2023 as Bill 15-23 and took effect July 23, 2024 as Montgomery County’s Rent Stabilization Law. Renewals signed in 2026 are the first full cycle where every owner of a covered property is operating under the new framework with no grace period.
What People Still Call the HOME Act Is Now the Rent Stabilization Law
The HOME Act was the original 2023 proposal championed by certain Council members. The legislation that actually passed and was signed into law is Bill 15-23, which the county now calls the Rent Stabilization Law, administered by the Department of Housing and Community Affairs through the Office of Rent Stabilization. The names get used interchangeably in conversation. The legal citations to know are County Code Section 29-58 and Executive Regulation 2-24.
The 2026 Rent Cap and How to Calculate It
The annual increase is the lower of CPI-U plus 3 percent or 6 percent, whichever is less.
For leases with renewal dates from July 1, 2025 through June 30, 2026, the cap is 5.7 percent (the regional CPI-U was 2.7 percent, plus the 3 percent statutory add-on).
For leases renewing from July 1, 2026 onward, the maximum allowable increase is 5.2 percent based on the most recent CPI-U figure of 2.2 percent published in the March 2026 county register notice.
A few details that trip up owners:
- Rent on a regulated unit can only increase once every twelve months
- Increases can only take effect at lease renewal or on the start of a new lease, not midstream
- Written notice of any rent increase must reach the tenant at least 90 days before the effective date, regardless of whether the unit is regulated or exempt
- Notice must be delivered by U.S. Mail or in person with a signed receipt
Miss the 90-day window and the increase is invalid. The tenant keeps paying the old rent, and you wait until next year.
The county also publishes a Voluntary Rent Guideline that is 3.3 percent for 2026. The VRG is non-binding for most market-rate units but mandatory for Moderately Priced Dwelling Units (MPDUs) and properties under specific regulatory agreements. Owners participating in any county or state housing program need to check which number applies to them before doing anything else.
The Rockville Wrinkle Most Landlords Miss
Rental units inside the corporate boundaries of certain incorporated municipalities are not governed by the county’s Rent Stabilization Law. Properties in Gaithersburg, Rockville, Takoma Park, Barnesville, and Laytonsville fall under their own local rules. Takoma Park has its own long-standing and stricter rent stabilization regime. Rockville does not currently impose a county-style cap, but city ordinances and state landlord-tenant law still apply.
This matters because owners who hold properties in multiple Montgomery County jurisdictions cannot apply one rule across their portfolio. A landlord with a townhouse in Wheaton and a condo in Rockville is operating under two different sets of rules on the same renewal weekend.
What’s Exempt from the County’s 23-Year Rule
The Rent Stabilization Law applies to county-licensed residential rental units that are at least 23 years old, calculated from the year of construction listed on the Maryland State Department of Assessments and Taxation record. The exemption rolls forward each year. A building constructed in 2003 became regulated on January 1, 2026.
Beyond the age cutoff, the most common exemptions:
- Buildings substantially renovated within the prior 23 years, where the renovation cost at least 40 percent of the assessed value
- Two-unit buildings where the owner occupies one unit as a principal residence
- Units in licensed medical or treatment facilities
- Units in 501(c)(3)-owned facilities providing temporary shelter
- Units already subject to a regulatory agreement with a government agency restricting occupancy to low- and moderate-income tenants
Filing for an exemption isn’t automatic. The owner has to claim it through DHCA, with documentation.
Banking, Capital Improvements, and Fair Return Petitions
A landlord who chooses not to take the full allowable increase in a given year can bank the unused portion for use in a future year, capped at a cumulative 10 percent. If you raised rent by 3 percent when 5.7 percent was allowed, the difference accrues. Banked amounts must still be applied within the same legal framework, with proper notice, and only at lease renewal.
Capital improvements that meaningfully extend the life of the property can support a petition for a limited surcharge above the annual cap. A new HVAC system, a roof replacement, or significant electrical work can qualify. The petition has to be filed with DHCA and approved before the surcharge is collected.
A Fair Return petition is the safety valve for owners who can document that the cap is genuinely preventing them from earning a reasonable return on the investment. It is fact-intensive, requires complete operating financials, and is not the place to start a conversation about rent.
What Grant, Riffkin & Strauss, P.C. Reviews Before a Lease Renewal
Most calls about a renewal come in the wrong order. Owners draft a letter, send it, and only then call counsel when the tenant pushes back. Reverse the sequence and the issues become much smaller.
A few questions worth answering before the renewal letter goes out:
Is the unit covered by the Rent Stabilization Law, exempt because of age or a substantial renovation, or located in a municipality with its own rules?
Is the proposed increase within the current cap, and if banked amounts are being claimed, is the documentation in order to defend the calculation?
Does the existing lease contain language that needs updating to reflect new fee rules and notice requirements? County regulations now limit the fees a landlord can charge tenants and require specific disclosures.
If a non-renewal is being considered, does it comply with Maryland landlord-tenant law and Montgomery County’s just-cause requirements? Non-renewal isn’t a workaround for the rent cap.
Coordinating renewal letters, fee schedules, and lease language with the current rules takes a few hours of attention now and avoids weeks of complaint proceedings later.
Get the Lease Right Before You Send the Notice
Rent stabilization is now a permanent feature of operating rental property in unincorporated Montgomery County. The owners who treat compliance as part of routine portfolio management spend less on legal fees and have fewer disputes than the ones who treat it as paperwork to handle later. The attorneys at Grant, Riffkin & Strauss, P.C. work with Rockville-area and Montgomery County landlords on lease drafting, renewal compliance, exemption filings, and DHCA proceedings. Reach out before the next renewal cycle begins to make sure the rent increase you have planned is one you can actually defend.
