Real Estate Legal Hotline: Maryland Cracks Down on Counterfeit Leases: What Real Estate Professionals Need to Know
Maryland Cracks Down on Counterfeit Leases: What Real Estate Professionals Need to Know
Counterfeit leases have become a pervasive problem across Maryland and the District of Columbia, fueling squatting schemes that leave homeowners financially devastated and with few immediate remedies. Scammers are now using AI-powered lease generation sites and apps to forge leases, even offering “move-in packages” to potential occupants in exchange for cash payments. When someone presents a lease to law enforcement, even one a homeowner insists is fraudulent, police have typically treated the situation as a civil landlord-tenant dispute rather than criminal trespass or fraud, leaving property owners locked out for weeks or months while courts sort it out.
Governor Wes Moore signed Chapter 550 (Senate Bill 82) into law on May 12, 2026, directly addressing this gap. The new law amends Section 8-601 of the Criminal Law Article to add “lease of real property” and “rental agreement relating to real property” to the list of instruments that may not be counterfeited with intent to defraud. The legislation was passed with broad bipartisan support for holding bad actors accountable.
The consequences under the amended statute are significant. A person who counterfeits, causes to be counterfeited, or willingly aids or assists in counterfeiting a lease of real property or rental agreement is guilty of a felony, punishable by up to ten years of imprisonment, a fine not exceeding $1,000, or both. A person who knowingly, willfully, and with fraudulent intent possesses a counterfeit lease or rental agreement is guilty of a misdemeanor, punishable by up to three years of imprisonment, a fine not exceeding $1,000, or both. This distinction is important: the law targets those who create and distribute counterfeit documents most severely while still holding knowing possessors accountable.
The law also addresses jurisdictional concerns that have hampered the prosecution of these schemes. Under the new provision, prosecution may be commenced in any county in which an element of the crime occurred, the counterfeit instrument is recorded in the county land records or filed with the clerk of the circuit court, the victim resides, or, if the victim is not an individual, the victim conducts business. This broad venue provision gives prosecutors flexibility to bring charges where the harm is felt, rather than requiring them to pinpoint where the document was physically created.
For real estate professionals, this law represents a meaningful new tool. Previously, under the existing maximum penalties for related offenses, courts could impose only up to 90 days in jail and a $500 fine against individuals who possessed counterfeit leases, an insufficient deterrent for sophisticated fraud networks. The upgraded felony classification signals that Maryland now treats fraudulent lease schemes with the seriousness they warrant.
The law takes effect on October 1, 2026. Real estate professionals should familiarize themselves with the new provisions and advise property-owner clients that they now have a clear criminal statute to reference when reporting counterfeit lease activity to law enforcement. While civil remedies such as wrongful detainer actions remain available, this legislation ensures that the criminal justice system can impose meaningful penalties on those who perpetrate and facilitate lease fraud across our communities.
About the author (drafted with the assistance of AI): Erin August is an Attorney in the Real Estate Department at Shulman Rogers, P.A. Barred in Maryland, D.C., and Virginia. She was born in Washington, DC, and raised in Montgomery County, Maryland, where she resides with her husband and son.
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