The Maine Supreme Judicial Court has affirmed a lower court ruling that awarded $6,000 plus attorney fees and costs to tenants who sued their landlord for wrongfully withholding their security deposit and violating habitability standards.
In *Zakaria Allaf v. Shoreline Holdings Five, LLC*, decided Dec. 4, 2025, the state's highest court rejected arguments from Shoreline Holdings Five, LLC, and Robb Crawford that the evidence was insufficient to support the small claims court's liability finding. The landlords also unsuccessfully challenged the court's authority to award attorney fees in addition to the $6,000 damage award.
The case originated when tenants Zakaria Allaf and Stephanie Crosby filed a small claims action against their former landlords, alleging two primary violations: wrongful retention of their security deposit and breach of the implied warranty of habitability for their residential tenancy. The District Court in Portland, presided over by Judge Nofsinger, ruled in favor of the tenants on both claims.
According to the small claims court's findings, Crawford agreed in August 2020 to lease an apartment in Biddeford to Allaf, Crosby, and two other individuals. The lease term ran from Sept. 1, 2020, to Aug. 1, 2021. The court found these facts were supported by competent evidence in the record.
After the District Court entered judgment for $6,000 plus attorney fees and costs, Shoreline appealed to the Superior Court in Cumberland County. Judge O'Neil affirmed the small claims judgment, prompting Shoreline to appeal again to the Maine Supreme Judicial Court.
In their appeal to the state's highest court, Shoreline raised two main arguments. First, they contended that the evidence was insufficient to support the small claims court's finding of liability on the wrongful retention claim. Second, they argued that the court erred by awarding attorney fees in addition to the $6,000 in damages, claiming this violated the statutory "monetary limit" of $6,000 on small claims actions under 14 M.R.S. § 7482.
Chief Justice Stanfill, writing for the five-member panel that included Justices Mead, Connors, Lawrence, and Douglas, rejected both of Shoreline's contentions. The court found that competent evidence supported the small claims court's factual findings and liability determination.
Regarding the attorney fees issue, the Supreme Judicial Court disagreed with Shoreline's interpretation of the small claims monetary limit. The landlords had argued that because small claims actions are capped at $6,000 under Maine statute, awarding attorney fees on top of that amount exceeded the court's authority. However, the high court found this argument unpersuasive and affirmed the award of attorney fees and costs in addition to the damages.
The case highlights important protections for Maine tenants under state law. The implied warranty of habitability requires landlords to maintain rental properties in habitable condition, while security deposit laws protect tenants from wrongful retention of these funds after lease termination.
Security deposit disputes are among the most common landlord-tenant conflicts, and Maine law provides specific protections for tenants. When landlords wrongfully withhold security deposits, tenants can recover not only the deposit amount but also attorney fees and costs, as demonstrated in this case.
The implied warranty of habitability claim adds another layer of tenant protection, requiring landlords to ensure their rental properties meet basic living standards. Violations of this warranty can result in damages even when tenants continue to occupy the premises.
The Supreme Judicial Court's decision reinforces that small claims courts retain authority to award attorney fees and costs beyond the monetary damage limits in appropriate cases. This ruling could encourage more tenants to pursue legal action against landlords who violate deposit retention or habitability requirements, knowing they can recover legal costs if successful.
The case also demonstrates the multi-level appeal process available in Maine's court system. After losing in small claims court, Shoreline appealed to Superior Court and then to the state's highest court, but was unsuccessful at each level.
For landlords, the decision serves as a reminder of their legal obligations regarding security deposits and property habitability standards. The award of attorney fees in addition to damages increases the potential cost of violations and emphasizes the importance of compliance with tenant protection laws.
The ruling comes at a time when housing issues remain prominent in Maine and across the nation, with tenants increasingly asserting their legal rights against landlords who fail to meet their obligations. The Supreme Judicial Court's affirmation of the lower court rulings strengthens these tenant protections under Maine law.