Susan K. Gauvey United States Magistrate Judge
Now pending before this Court is defendants’ motion for partial summary judgment, (ECF No. 36), and plaintiff’s cross-motion for partial summary judgment. (ECF No. 40). A hearing was held on May 9, 2013. Both parties have submitted supplemental briefing at the Court’s request. (ECF No. 47; ECF No. 51; ECF No. 52). For the reasons set forth herein, both motions are GRANTED in part and DENIED in part.
Plaintiff is a public housing tenant living in property owned and operated by the Housing Commission of Anne Arundel County (“HCAAC”). (ECF No. 25, ¶ 8). Defendants are HCAAC, Clifton Martin as the Executive Director of HCAAC, and Diana Flynn as a Senior Property Manager for HCAAC. (Id. at ¶¶ 2-4). For purposes of these cross motions for summary judgment, the parties’ dispute is limited to the validity of a clause in plaintiff’s lease requiring a tenant to specifically and in writing designate his monthly payment as “rent” or “for rent” for it to be considered as such. This clause thus allows HCAAC to apply undesignated payments from a tenant first towards outstanding maintenance charges, late fees, or legal fees, and then to rent. (ECF No. 36-1, 2-4).
A. The “Allocation” Clause and its Operation
In May of 2010, plaintiff entered into a lease with HCAAC. (ECF No. 25, ¶ 8). The lease signed by plaintiff contained the following “allocation” clause:
Any payment by the Tenant to the Landlord under this Lease which is not specifically designated, in written notation, as “rent” or “for rent” may be applied at the Landlord’s option, as follows: first to outstanding maintenance charges and/or late fees and/or legal fees and secondly to rent.
(ECF No. 36-3, 4). The parties do not dispute the inclusion of this clause in the lease or plaintiff’s signature on the lease.
The clause functions as follows. A tenant is charged for a maintenance repair in his unit. The tenant has the right to grieve this charge. If this right to grieve is waived, or the tenant is unsuccessful in his grievance, the charge remains outstanding. At this point, if the tenant does not pay the charge, HCAAC may use any unallocated payment from the tenant to satisfy this debt. If, for example, the tenant makes a payment at the beginning of the following month in the exact amount of his rent, but fails to mark his payment as “rent” or “for rent, ” this payment may be diverted towards the outstanding maintenance charge. As a result, some or all of his rent remains unpaid.
If the tenant does not then pay the unpaid rent-in effect, make a further payment-HCAAC may initiate summary ejectment proceedings against the tenant under Section 8–401 of the Real Property Article, Md. Code (1974, 2003 Repl.Vol., 2009 Supp.)(“R.P.”) for failure to pay rent. A tenant’s claim in that proceeding that he did, in fact, make his monthly rental payment will be unsuccessful, as HCAAC diverted this payment towards other charges, leaving some or all of the rent due. The result is that a tenant who pays to the landlord the amount of “rent” due under the lease and governing law, but fails to denominate it as such, may be evicted from public housing through a summary ejectment process reserved solely for a failure to pay rent. If, however, the tenant makes a payment, marking that payment as “rent” or “for rent, ” none of that payment can be applied to any outstanding maintenance charges, late fees or legal fees. Rather, the HCAAC must move against the tenant under other state proceedings to recover these non-rent charges and fees.
B. Ms. Sager’s Situation
The relevant undisputed facts here illustrate HCAAC’s use of the allocation clause. On November 29, 2010, plaintiff was notified that she owed $380.00 in maintenance charges for “flooding, ” “excessive cleaning, ” and “kitchen sink.” (ECF No. 2-2, 1). The notification letter informed plaintiff of her “right to an informal hearing on this matter in accordance with our grievance procedure, providing you request same within ten (10) working days . . . of the date of this letter.” (Id.). She was also informed of her right to a formal grievance proceeding, where she could be represented by counsel, present evidence, and refute any evidence against her. (Id.).
Also on November 29, plaintiff received notice that her tenancy was terminated effective December 8, 2010, due to “violations of material terms of your lease.” (ECF No. 8-3, 4). The reasons stated were ownership of a pet without necessary documentation, “deplorable” conditions in the unit, damage relating to the kitchen faucet being left running, and two occasions when smoke was observed coming from the apartment due to the stove being left on. (Id. at 6-8). She was also advised of her right to grieve the termination. (Id. at 10).
Plaintiff timely requested an informal grievance hearing relating to “your letter dated Novemeber [sic] 29th, 2010, ” although she did not specify whether she sought to grieve the lease termination or the maintenance charges. (ECF No. 51, 2). An informal hearing was held on December 9, 2010. A written decision was sent to plaintiff, in which “Termination of Lease from Public Housing Unit” was listed as the reason for the hearing. (ECF No. 8-4, 55). The decision detailed the testimony and evidence presented at the hearing, and ultimately upheld the termination. (ECF No. 8-4, 55-56).
Thereafter, plaintiff timely requested a formal hearing. (ECF No. 51-3). Again, plaintiff did not specify the reason for the grievance. The parties agree that plaintiff’s request did not comply with HCAAC’s policy, which requires a grievant to state both the reason for the grievance and the relief sought. (ECF No. 51, 2). Plaintiff retained counsel for the formal hearing, however, and in a letter requesting a change of hearing date, counsel noted that plaintiff had contacted her “for assistance with a formal grievance hearing to consider termination of her public housing assistance at Pinewood Village East.” (ECF No. 51-4, 1). The hearing was held on February 14, 2011. (ECF No. 51, 3). The termination was again upheld. (Id.).
Throughout the grievance process, plaintiff continued to timely make rental payments. On March 7, 2011, HCAAC exercised its option under the allocation clause to apply plaintiff’s March 1 undesignated payment towards the outstanding maintenance charges. (ECF No. 2-5, 1). It did the same with plaintiff’s April 2011 payment. (Id.). It is undisputed that these payments were for $192.00, the exact amount of plaintiff’s rent. (ECF No. 47, ¶¶ 15-18). However, plaintiff did not designate either of these payments as “rent” or “for rent.” (ECF No. 47, ¶ 14).
On March 14, 2011, HCAAC filed a Failure to Pay Rent action under R.P. § 8-401 against plaintiff seeking ejectment based on plaintiff’s alleged failure to pay rent due on March 1, 2011. (ECF No. 25-1, 1). Plaintiff produced a receipt for rent paid in March and the case was dismissed. (Id.). At a second summary ejectment hearing in April, however, the judge ruled in favor of HCAAC, after a showing by HCAAC that it had used plaintiff’s April payment towards maintenance charges, leaving rent due. (ECF No. 25-2, 1). The judge determined that plaintiff owed $384.00 in unpaid rent. (Id.).
Plaintiff asks this Court to find the allocation clause invalid as a matter of law, under several federal and state laws. Defendants ask the Court to declare the allocation clause valid, under the same laws.
Summary judgment under Rule 56 is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine dispute remains “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2508 (1986). “Material” facts are those that might affect the outcome of the case under the governing law. Id. The party moving for summary judgment has the burden of demonstrating the absence of any genuine issue of material fact. Fed.R.Civ.P. 56(a); Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987).
When considering a motion for summary judgment, the court views all facts and makes all reasonable inferences in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986). The non-moving party must show that specific, material facts exist to create a genuine, triable issue. Id.; see also Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553 (1986). On those issues for which the non-moving party has the burden of proof, it is his or her responsibility to oppose the motion for summary judgment with affidavits or other admissible evidence specified in the rule. Fed.R.Civ.P. 56(c); Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1315-16 (4th Cir. 1993). If a party fails to make a showing sufficient to establish the existence of an essential element on which that party will bear the burden of proof at trial, summary judgment is proper. Celotex, 477 U.S. at 322-23.
The role of the court at the summary judgment stage is not to “weigh the evidence and determine the truth of the matter, ” but rather to determine whether “there are any genuine factual issues that can properly be resolved only by a finder of fact because they may be resolved in favor of either party.” Anderson v. Liberty Lobby, 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The issue is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.
The fact that parties file cross-motions for summary judgment does not generally relieve the court of its obligation to determine whether there are disputes as to material fact which prevent entry of judgment as a matter of law. Bryant v. Better Bus. Bureau of Greater Maryland, Inc., 923 F.Supp. 720, 729 (D. Md. 1996)(“[C]ross-motions for summary judgment do not automatically empower the court to dispense with the determination of whether questions of material fact exist.”)(quoting Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.), cert. denied, 464 U.S. 805, 104 S.Ct. 53 (1983)). When cross-motions for summary judgment demonstrate a basic agreement, however, concerning what legal theories and material facts are dispositive, they may be probative of the lack of a factual dispute. Shook v. United States, 713 F.2d 662, 665 (11th Cir. 1983).
In her challenge to this lease provision, plaintiff identifies several laws which she believes it violates. None are an easy, straightforward fit. There is little precedent precisely on point. This lease provision is, however, unworthy of an agency dedicated to the provision of decent, affordable housing to those of low income, and inconsistent with the purpose and provisions of housing law. Accordingly, the Court has determined that the clause violates the United States Housing Act and the Brooke Amendment thereto. Moreover, in its purposeful conflation of “rent” and other charges and fees, the lease provision violates Section 8-208 of the Maryland Real Property Article. R.P. § 8-208. Finally, the Court has found the allocation clause to violate the Maryland Consumer Protection Act (“MCPA”), Md. Code (2005 Repl. Vol., 2011 Supp.), §§ 13-101 et seq. of the Commercial Law Article (“C.L.”).
Before addressing each of plaintiff’s legal claims individually, it is critical to understand the broad federal and state statutory and regulatory framework governing the public housing tenant. The Housing Act seeks to “remedy . . . the acute shortage of decent and safe dwellings for low-income families.” 42 U.S.C. 1437(a)(1)(A). The Act furthers this purpose by ensuring that public housing leases include fair and reasonable terms that allow low-income tenants to maintain a residence in affordable housing. Title 42 of the United States Code, Section 1437a(a)(1), commonly known as the Brooke Amendment, caps a public housing tenant’s rent at 30% of the “family’s adjusted monthly income.” Title 42, Section 1437d of the Code regulates other lease terms, including provisions related to lease termination, and requires that leases “do not contain unreasonable terms and conditions.” 42 U.S.C. 1437d(l)(2).
This regulation of public housing leases is essential because public housing tenants are a particularly vulnerable group. They often have few practical housing alternatives. Public housing leases are rarely negotiated and are generally, as here, presented to tenants on a take it or leave it basis. Indeed, one commentator has observed that a public housing lease is “the epitome of a contract of adhesion.” ...