UMD, Towson tenants join Maryland delegates at state house in fight to terminate leases

Gavin Kohn passes the Administration Building on Aug. 10, 2020 as he speaks to drivers of the caravan protesting for students to be able to terminate their leases with South Campus Commons and The Courtyards. (Joe Ryan/The Diamondback)

University of Maryland and Towson University students joined forces with state delegates near the Maryland State House in a caravan protest last Wednesday to address their ongoing battle to be released from their on-campus apartment leases amid the coronavirus pandemic. 

Since the announcement in July that most classes would be held virtually this fall, tenants of South Campus Commons and Courtyards have been trying to terminate their lease agreements, but with little success. The public-private partnership between the university and MEDCO, a state-run private entity that the university hired to build these on-campus apartment buildings, has bound students to their leases for the year. 

Now, nearly four weeks into the semester, news of the battle has reached the ears of politicians who are urging the invested parties to bring a speedy resolution to the situation.

“I don’t know how anyone can let this slide, but it has gone by for two months and no one has really jumped in front of the university,” said Hannah Aalemansour, a member of UMDTenants, the student group advocating for the termination of leases.

MEDCO, which secured the bonds for the 14 apartment buildings that make up South Campus Commons and Courtyards, will be the owner of these apartments for 12 more years — that is, until the university, whose payments to MEDCO are made in the form of student rents, takes complete ownership. The university is currently 18 years deep in this 30-year public-private partnership, known as a P3, for student housing, according to Aalemansour. 

But MEDCO isn’t the company that manages these apartments. Instead, a company called Capstone On-Campus Management drafts the leases and collects the payments for the tenants who rent their units. Meanwhile, the university’s Department of Resident Life is contracted by Capstone to oversee the resident life program.

So far, nearly 150 students — from this university and Towson —  have hired a legal team to fight on their behalf. But if a class-action lawsuit were to occur, it would likely take longer than the duration of the lease itself to resolve the problem, Aalemansour said. 

The more efficient route to getting answers, Aalemansour said, has been to apply pressure on the university and MEDCO. Their movement is now garnering attention from state officials who are asking these public and private entities questions that have, until now, gone largely unanswered. 

During a state budget hearing last Wednesday, state Del. Ben Barnes (D-Prince George’s and Anne Arundel) and University of Maryland President Darryll Pines congregated virtually to discuss the ongoing issue between student tenants and MEDCO. When asked about the progress of the situation, Pines answered that a solution isn’t entirely in the university’s purview. 

“We’ve tried to work obviously with MEDCO and the management firm to have them have an opportunity to potentially release both from leases,” Pines said. “We have made every effort, I think, to be in touch with students who want to be released from P3 housing and connect them, but we’re not able to just do everyone, so that’s unfortunate.” 

[As first month of rent looms, UMD students fight to terminate on-campus apartment leases]

The university still doesn’t have any control over housing that has partnerships with private companies, according to a statement sent by a university spokesperson. To help those trying to be released from leases, the university contacted 800 students on the dorm waitlist about the possibility of taking over leases in Commons and Courtyards, according to the statement.

However, Barnes said a quick solution is needed, since the semester has already begun and the state has received many complaints from students. 

Currently, the state is willing to provide millions of dollars for MEDCO-related leases on state property, but only if the public universities who have a P3 with MEDCO are willing to cooperate in providing further aid, Aalemansour said. And that’s where the challenge lies.

State Del. Lorig Charkoudian (D-Montgomery), who protested with the students last Wednesday, said that solving this issue is especially important because of the financial hardships brought onto families due to the pandemic. And rent in South Campus Commons, which can range anywhere from $957 to $1300, is only an extra burden.

“A piece of it is just really helping people whose finances are, all of a sudden, in a real crisis, and really can’t afford to be paying for housing that they can’t use,” Charkoudian said. 

Although students with medical issues can terminate leases, many, such as James Tabet, would face a “massive financial burden” if they had to pay the missing rent. Tabet is one of several students who haven’t moved into their units or made any payments.

Tabet’s family, who owns a restaurant, has taken a big cut in their income due to the restrictions associated with the pandemic. 

“It won’t be easy for my family at all,” Tabet said. “We’re just students that can barely pay tuition, let alone $1000 a month on top of the pandemic, where jobs are scarce and the economy is in shambles.” 

Still, lawyers for UMDTenants and MEDCO came to one agreement: The credit of students who haven’t made any lease payments will remain unaffected, regardless of the outcome of the legal battle. A low credit score could make borrowing money — whether it’s a loan, mortgage or rent — much more difficult. 

[Over 100 UMD students hire legal team in fight to terminate on-campus apartment leases]

Another aspect of the issue is the nature of public-private partnerships in the state. In theory, Charkoudian said, these partnerships are designed to spread risk to the private sector and save taxpayer money. But with a case like MEDCO, it’s really the taxpayers who are at risk. 

According to a July 24 statement from COCM, student leases can not be terminated “due to [MEDCO’s] obligations to bond holders, vendors and other entities, as well as not being eligible for any of the federal relief programs currently available.” 

But to Charkoudian, the implications of that decision are especially important: Instead of spreading the risk, she said, MEDCO is protecting its financial investments in private financial markets. 

“I think it’s really important that we put this in that bigger context also and make sure that the structures we’re setting up and supporting as a state are really helpful to our policy goals and helpful to our residents,” Charkoudian said. 

However, getting students out of these leases will require at least some action on Gov. Larry Hogan’s part, since he is in the strongest position to put pressure on the University System of Maryland and MEDCO, Charkoudian said. 

If the problem doesn’t get resolved in the next month, Aalemansour said she feels like the battle will be taken to court. Historically, Maryland judges have usually voted in favor of tenants against large corporations. This, compounded with the threat of added legal fees, could lead to MEDCO backing down as well, Aalemansour added. 

A victory for the tenants could also set a precedent for other partnerships between universities and private companies across the country. Aalemansour said while UMDTenants has been in contact with similar student groups in Arizona, New York and Massachusetts, she feels that Maryland tenants have so far made the most progress. 

While the battle isn’t over, UMDTenants and other advocates will continue to seek answers from MEDCO and the university. 

“The next step now is to keep applying the pressure,” Aalemansour said.

CORRECTION: A previous version of this article stated that Del. Darryl Barnes questioned university President Darryll Pines during a state budget hearing. Instead, Del. Ben Barnes questioned Pines. This story has been update

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