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Julia Kane, a rising senior at the University of Maryland College Park, was worried about the lease she had signed in February, before she knew that the COVID-19 pandemic would upend her last semester of college. It was June, and she still had not received a definitive answer as to whether she could cancel her lease and stay at home for the fall semester.
Kane had leased with South Campus Commons, one of UMD鈥檚 public-private partnership undergraduate student apartment communities. 鈥淐apstone On-Campus Management (COCM) oversees most elements of the operation, while the UMD Department of Resident Life oversees the resident life program,鈥� according to its website.
On June 17, COCM, the private management company, sent an email to all residents living in South Campus Commons and The Courtyards, the other public-private partnership student housing community operated by COCM. In it, they told students that they would have to 鈥渞eview and sign a health and safety addendum鈥� to their fall lease related to COVID-19.
But instead of the promised addendum, COCM sent all of its residents an 鈥渦pdated guidelines for the 2020-2021 lease term,鈥� in which COCM states that all residents 鈥渧oluntarily assume鈥� the risk of getting infected by COVID-19, which may result in 鈥渟erious illness and/or death.鈥� Residents are also required to relocate and 鈥渕ay be provided alternative housing arrangements鈥� if they are asked to self-quarantine, according to the new rules.
While students living in UMD residential halls were given the option to either sign a housing agreement addendum accepting the new risks related to COVID-19 or cancel their housing agreement without financial penalty, the only choices that students living in the public-private apartments had was to stay in the lease or to re-lease their room to another student.
Re-leasing is incredibly difficult because with 80% of classes remote, 鈥渘o one wants to live here,鈥� said Gavin Kohn, a rising senior at UMD who has a lease with The Courtyards.
鈥淚t is an addendum. If it talks like a duck and walks like a duck, you call it a duck,鈥� said Leo Kane, Julia鈥檚 father and an attorney. 鈥淵ou鈥檙e changing the terms and conditions of this contract, and it is absurd to think you can call it a different name and get away with it.鈥�
As they tried to cancel the lease, Julia and her father were bounced back and forth for several days between UMD Residential Life and COCM. Leo Kane said the university repeatedly responded with the same explanation: The apartments are not owned by UMD, and so university officials do not have authority to address lease terms or to approve lease cancellation requests.
鈥淚 was outraged,鈥� Leo Kane said. 鈥淚t is absurd to suggest that you鈥檙e not involved when in fact South Campus Commons is listed as one of the residence communities in UMD鈥檚 2019-2020 residence halls handbook. It鈥檚 a residence hall by every means.鈥�
Only UMD students can lease at South Campus Commons and The Courtyards and all residents must follow the university code of student conduct, according to the handbook.
鈥淭he fact that they act like they don鈥檛 have any power right now and are letting COCM take advantage of their students is cruel,鈥� Julia Kane said. 鈥淭hey said the health and safety of their students are top priority but they鈥檙e treating these 3,000 students [students leased with COCM] differently from the rest.鈥�
Tammy Spengler has two sons at UMD, a rising senior who has a lease with The Courtyards and an incoming freshman who canceled his on-campus housing agreement. 鈥淚t doesn鈥檛 make any sense to me that UMD is letting some students die and other students the right to keep themselves safe,鈥� she said.
Leo Kane told COCM management that the 鈥渞ules and regulations update鈥� sent out in mid-July is a violation of the lease because COCM is unilaterally changing the terms of the contract.
In response, COCM sent Julia a lease cancellation form on July 16, which she signed the next day.
Shortly afterwards, she publicized the legal argument she had used to get out of her lease, leading more students to email COCM, but to no avail.
鈥淭he announcement regarding updates to rules and regulations does not alter the lease agreement and was based on expectations for students who will be on campus this fall,鈥� South Campus Commons management emailed back to residents. 鈥淭he lease agreement allows for modifications to be made to the rules and regulations as needed.鈥�
Around 15 students and parents participated in a car caravan on campus Monday, driving from The Courtyards to the Division of Administration and Finance. Students in cars, covered in signs that said 鈥減eople over profit,鈥� 鈥�#HousingHostages鈥� and 鈥渃ancel the contract,鈥� honked during the entire route, with blinkers on.
鈥淭his is not a standard contract dispute,鈥� Leo Kane said. 鈥淭his is fraudulent activity by a company that should know better and a university that should be protecting their students.鈥�
Who is responsible?
The terms of UMD鈥檚 public-private partnership with COCM and the Maryland Economic Development Corporation has never been so critically analyzed by students as it has been now. Who exactly has the authority to cancel student leases in this 鈥減ublic-private partnership鈥�?
It depends on who you ask.
MEDCO is a state corporation that promotes economic development in the state through bonds and projects, which includes student housing projects. The agency currently owns The Courtyard and South Campus Commons.
Capstone On-Campus Management is a private managing company that MEDCO hired to manage administrative and leasing services.
Only UMD students who are approved by the Department of Resident Life can live in the two apartment complexes.
Once MEDCO-issued bonds that were used to finance student housing projects are repaid, ownership of South Campus Commons and The Courtyard will go back to the University System of Maryland (USM), according to MEDCO鈥檚 2019 annual report.
In the spring, USM had 鈥渁sked MEDCO to provide refunds for unused rents,鈥� Robert Brennan, the executive director of MEDCO wrote in an email to Del. Marc Korman (D-Montgomery) on July 29.
鈥淢EDCO complied with the request and was told by the System that they would work with MEDCO to assure we did not run into cash flow problems. At this time, the University has not asked MEDCO to offer cancellations or any payment assistance in the event of cash flow short falls.鈥�
Still, the university does not recognize any responsibility over the leases.
鈥淪tudents have signed contracts with a private management company, not the university,鈥� said Hafsa Siddiqi, a spokeswoman for UMD College Park.
This suggests that all leasing decisions fall on MEDCO, where officials said they have received around 500 requests from students leased with the two apartment complexes to cancel their contracts.
鈥淢EDCO is unable to release all students due to our obligations to bond holders, vendors and other entities, as well as not being eligible for any of the federal relief programs currently available,鈥� Amy Velich, the associate director of bond financing in MEDCO, said in an email.
Yet students and parents strongly believe that UMD has more power to influence public-private housing contract decisions.
鈥淲hen we signed these leases, we put our trust in UMD鈥檚 endorsement,鈥� said Simin Li, a rising senior who wants to cancel her lease at South Campus Commons. 鈥淎ll pressure has to be on UMD.鈥�
A short-sighted decision
Although MEDCO is looking out for the best interests of its bondholders now, the agency will be liable if a tenant dies due to coronavirus, Leo Kane said.
鈥淭he broader strategy needs to be minimizing the number of students that are around the campus,鈥� said state Sen. James C. Rosapepe (D-Prince George鈥檚), whose district includes College Park.
If some students are let out of their leases, it will help depopulate the area, which is healthier for everyone, Rosapepe said. 鈥淩esidential universities are like cruise ships on land.鈥�
First month鈥檚 rent for these apartments was due on Aug. 1, but per legal advice, students who want to cancel their contracts did not pay, Spengler, a parent, said.
Frostburg State University students living in Edgewood Commons, which is also owned by MEDCO, received a similar response if they are trying to get out of their leases 鈥� those decisions lie in MEDCO鈥檚 hands.
鈥淚f a student wants to make a responsible decision to stay at home and practice social distancing, we want to encourage that rather than create an incentive for an action that goes against what is good public health,鈥� said Del. Ben Barnes (D-Prince George鈥檚), who represents College Park.
鈥淚 think all parties are seeking a solution to this,鈥� Barnes continued. 鈥淭here is a state role and a university role in coming up with funds to hold MEDCO harmless.鈥�
Although the University and MEDCO will lose money if they release students from their leases, 鈥渋t鈥檚 about doing the right thing,鈥� said Del. Joseline A. Pe帽a-Melnyk (D-Anne Prince George鈥檚), who also represents College Park. 鈥淚t鈥檚 about finding a compromise and understanding that these are very trying circumstances where everyone is hurting financially.鈥�
There are several possible outcomes that could play out.
First, the university and the state could successfully find funds that relieve MEDCO鈥檚 concerns about bondholder obligations and enables the agency to release students from their leases.
Or MEDCO does not find any money, students refuse to pay their rent and MEDCO files a deficiency appropriation in the next legislative session.
Or students can bring MEDCO to court. But until they experience some harm, it is unclear whether they have a definitive standing to sue.
鈥淲e are hoping for the best, but also preparing for the worst,鈥� Li said. Around 100 students have obtained a lawyer together, in case they have to fight in court.
鈥淲hile I do have sympathy for UMD, COCM and MEDCO, responsibility should not ultimately fall on the students,鈥� Li said. 鈥淓veryone is struggling, but students should not be the ones who are footing this bill.鈥�
