An Act Related to Rent Escrow
Maine Legislature, Session 126, LD 1317
Committee: Veterans and Legal Affairs
Sponsors: SCHNECK, NADEAU, VEROW
Amends: 14 MRSA §6021, 14 MRSA §6026

Legislative Document 
No. 1317 
H.P. 940 
House of Representatives, April 2, 2013 
An Act Related to Rent Escrow 
Reference to the Committee on Veterans and Legal Affairs suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative SCHNECK of Bangor.  (BY REQUEST) 
Cosponsored by Representatives: NADEAU of Winslow, VEROW of Brewer. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  14 MRSA §6021, sub-§4, as amended by PL 1981, c. 428, §9, is further 
amended to read: 
4.  Remedies.  If the court finds that the allegations in the complaint are true, the 
landlord shall be is deemed to have breached the warranty of fitness for human habitation 
established by this section, as of the date when actual notice of the condition was given to 
the landlord. In addition to any other relief or remedies which that may otherwise exist, 
the court may take one or more of the following actions.  
A.  The court may issue appropriate injunctions ordering the landlord to repair all 
conditions which that endanger or materially impair the health or safety of the tenant; 
B.  The court may determine the fair value of the use and occupancy of the dwelling 
unit by the tenant from the date when the landlord received actual notice of the 
condition until such time as the condition is repaired, and further declare what, if any, 
moneys money the tenant owes the landlord or what, if any, rebate the landlord owes 
the tenant for rent paid in excess of the value of use and occupancy. In making this 
determination, there shall be is a rebuttable presumption that the rental amount equals 
the fair value of the dwelling unit free from any condition rendering it unfit for 
human habitation. A written agreement whereby the tenant accepts specified 
conditions which that may violate the warranty of fitness for human habitation in 
return for a stated reduction in rent or other specified fair consideration shall be is 
binding on the tenant and the landlord. 
C.  The court may authorize the tenant to temporarily vacate the dwelling unit if the 
unit must be vacant during necessary repairs. No use and occupation charge shall 
may be incurred by a tenant until such time as the tenant resumes occupation of the 
dwelling unit. If the landlord offers reasonable, alternative housing accommodations, 
the court may not surcharge the landlord for alternate tenant housing during the 
period of necessary repairs. 
D.  The court may enter such other orders as the court may deem determine necessary 
to accomplish the purposes of this section. The court may not award consequential 
damages for breach of the warranty of fitness for human habitation.  
Upon the filing of a complaint under this section, the court shall enter such temporary 
restraining orders as may be necessary to protect the health or well-being of tenants 
or of the public. 
E.  The court may order a disbursement from an escrow account under section 6026, 
subsection 2. 
Upon the filing of a complaint under this section, the court shall enter such temporary 
restraining orders as may be necessary to protect the health or well-being of tenants or of 
the public. 
Sec. 2.  14 MRSA §6026, sub-§2, as amended by PL 2005, c. 78, §1, is further 
amended to read: 
2.  Tenant action if landlord fails to act.  If a landlord fails to maintain a rental unit 
in compliance with the standards of subsection 1 and the reasonable cost of compliance is 
less than $500 or an amount equal to 1/2 the monthly rent, whichever is greater, the 
tenant shall notify the landlord in writing of the tenant's intention to correct the condition 
at the landlord's expense of the rental unit that is out of compliance.  If the landlord fails 
to comply within 14 days after being notified by the tenant in writing by certified mail, 
return receipt requested, or as promptly as conditions require in case of emergency, the 
tenant may cause the work to be done with due professional care with the same quality of 
materials as are being repaired.  Installation and servicing of electrical, oil burner or 
plumbing equipment must be by a professional licensed pursuant to Title 32.  After 
submitting to the landlord an itemized statement, the tenant may deduct from the tenant's 
rent the actual and reasonable cost or the fair and reasonable value of the work, not 
exceeding the amount specified in this subsection notify the appropriate municipal or 
local enforcement official or agency to inspect the rental unit and certify that the 
condition of the rental unit constitutes a violation of the standards of subsection 1.  If an 
appropriate municipal or local enforcement official or agency certifies that a rental unit 
violates the standards under subsection 1, within 10 days of this certification the tenant 
shall notify the landlord of the certification in writing by certified mail, return receipt 
requested.  If the landlord does not remedy the condition certified in violation of 
subsection 1 within 15 days of notice of certification under this subsection, or make a 
substantial step to remedy the condition upon a showing that the condition cannot be 
remedied in 15 days, the tenant may deposit any rent due into an escrow account 
controlled by an attorney, bank or other disinterested 3rd party that accepts and holds 
escrow payments payable only upon order of a court or the signatures of both the tenant 
and the landlord or person to whom rent is customarily paid.  If a tenant receives rental 
assistance from a governmental unit and the governmental unit is withholding rental 
assistance because the condition of the rental unit is not in compliance with the standards 
of subsection 1, the tenant may pay into escrow only the unassisted portion of the tenant's 
rent.  If the parties cannot agree to the terms of the remedy to the condition of the rental 
unit not in compliance with the standards of subsection 1, either party may bring an 
action in District Court.  After providing the parties with an opportunity to agree to the 
terms of the remedy through alternative means, the court shall determine whether the 
condition of the rental unit is not in compliance with the standards of subsection 1 and the 
scope of any remedy of a condition of the rental unit that is not in compliance with the 
standards of subsection 1 if the parties cannot agree to the terms of a remedy through 
alternative means.  Pursuant to section 6021, subsection 4, paragraph E, the court may 
order funds to be disbursed from an escrow account under this subsection to remedy a 
condition of a rental unit out of compliance with the standards of subsection 1.  A court's 
order under this subsection is not limited by the amount of funds in the escrow account or 
from any other remedy ordered under section 6021, subsection 4.  The attorney, bank or 
3rd party holding the funds in escrow may deduct from the escrow account reasonable 
administrative costs and fees for maintaining the escrow account.  All court-ordered 
disbursements and administrative costs and fees paid from the escrow account under this 
subsection or by the tenant under subsection 9 are considered a cost of compliance and 
must be subtracted from the amount of rent owed to the landlord.  Any funds remaining 
in the account after all court-ordered disbursements and administrative costs and fees are 
paid must be returned to the landlord.  Compliance with this subsection by a tenant is a 
defense to a claim of nonpayment of rent.  This subsection does not apply to repairs of 
damage caused by the tenant or the tenant's invitee. 
Sec. 3.  14 MRSA §6026, sub-§4, as enacted by PL 1981, c. 428, §10, is repealed. 
Sec. 4.  14 MRSA §6026, sub-§10, as enacted by PL 2009, c. 566, §14, is 
amended to read: 
10.  Foreclosure.  For tenancies in buildings in which a foreclosure action brought 
pursuant to section 6203-A or 6321 has been filed and is currently pending, or in which a 
foreclosure judgment has been entered, if the landlord fails to maintain the premises in 
compliance with the standards in subsection 1, a tenant may exercise the tenant's rights 
pursuant to this section without regard to the cost of compliance limitations set forth in 
subsection 2, except that the reasonable costs of compliance may not be more than the 
equivalent of 2 months' rent.  A tenant who exercises the tenant's rights under this 
subsection and who thereafter seeks assistance pursuant to Title 22, chapter 1161 may not 
have any amounts expended under this subsection counted as income pursuant to Title 22, 
section 4301, subsection 7. 
SUMMARY 
This bill allows a tenant to place rent owed into an escrow account if the tenant's 
rental unit has a condition that endangers or materially impairs the health or safety of the 
tenant and the landlord fails to remedy the condition. If the tenant and landlord cannot 
agree to a remedy of an unhealthful or unsafe condition of a rental unit after the tenant 
has placed the rent into an escrow account, either side may bring an action in District 
Court to determine whether an unhealthful or unsafe condition of the rental unit exists.  If 
a court rules for the tenant, the court may order funds to be disbursed from the escrow 
account to remedy the unhealthful or unsafe condition with those funds and 
administrative fees subtracted from the amount of rent the tenant owes the landlord.  This 
bill also removes the ability of a tenant to repair a dangerous condition that the landlord 
has failed to repair after notice and deduct the cost of the repair from the tenant's rent.