Many Massachusetts-based residential, commercial and non-profit tenants as well as residential property owners with mortgages will benefit from a new law signed by Governor Baker on April 20, 2020. The law, called “An Act providing for a moratorium on evictions and foreclosures during the COVID-19 Emergency,” provides a halt to evictions of most residential, commercial and non-profit tenants as well as on foreclosures of most residential properties during the COVID-19 state of emergency declared by the governor on March 10, 2020.
The law takes effect immediately. Its prohibitions on evictions and foreclosures as well as its security-deposit related provisions generally are to end on the earlier of 45 days after the lifting of the COVID-19 emergency order or August 18, 2020, however, the governor can extend the expiration in 90 day increments, but not beyond 45 days after a lifting of the emergency order.
It should be noted that rents and mortgage payments are not forgiven by the new law, just the timing of the payments and remedies of landlords and mortgage holders are impacted.
Leasehold Eviction Relief
Non-Termination of Residential Tenancies
Unless a limited exception applies, the new law prohibits residential landlords from terminating a tenancy or sending any notice or request to quit or vacate the premises. NOTE: this does not apply to commercial leases.
Eviction Relief for Residential, Commercial and Non-Profit Tenants
Courts are essentially barred from taking any action to effect non-excepted evictions of any leasehold tenants including accepting complaints for non-exempt evictions, entering eviction judgments, denying most defendants stays with respect to eviction proceedings or scheduling hearings or trials with respect to evictions. All deadlines for non-excepted evictions will be tolled during the operation of the law and sheriffs are prohibited from proceeding with any non-excepted evictions. Landlords are prohibited from charging a late fee or making a report to a credit agent for unpaid rent so long as the tenant provides the landlord notice and documentation that the non-payment of rent was due to a financial impact from COVID-19 within 30 days after the missed rent payment. NOTE: tenants should be mindful to timely send the proper notice. The state’s executive office of housing and economic development is to provide forms for this purpose and may issue emergency regulations.
Special Rules for Last Month’s Rent Deposits
Landlords holding a last month’s rent paid in advance may access and use the deposit to pay expenses such as mortgage payments, utilities, repairs and required upkeep, but the deposit can’t be used to pay the tenant’s missed rent payment. Landlords who access such a deposit must notify the tenant in writing that: (i) the landlord used the deposit before the last month of the tenancy, (ii) the landlord remains obligated to apply the deposit in advance to its intended application, and (iii) the tenant is entitled to the same amount of interest from the lessor under said state law that would have accrued had the lessor not utilized such funds before the last month of the tenancy. NOTE: landlords should be mindful to timely send the proper notice.
Limited Exceptions
Limited exceptions to the lease-related provisions apply including:
- Evictions for non-payment related lease violations such as criminal activity or other lease violations that that may impact the health or safety of other residents, health care workers, emergency personnel, persons lawfully on the subject property or the general public.
- Evictions of business tenants on account of the expiration of the term of the lease or tenancy or a default by the tenant before the declaration of the COVID-19 emergency (March 10, 2020).
- Evictions involving large commercial tenants which include businesses that alone or via affiliates, operate multi-state locations, international locations, are publicly traded or have 150 or more full-time equivalent employees.
Residential Mortgage Relief
The new law also provides residential borrowers experiencing negative economic impacts from the public health crises with substantial mortgage relief. Mortgage holders are obligated to grant residential borrowers forbearance if the mortgagor submits a request to the mortgage servicer affirming that the borrower has experienced a financial impact from COVID-19. NOTE: residential borrowers should be mindful to timely send this notice in the proper form. The forbearance shall be for not more than 180 days. Extra fees, penalties or interest beyond that which would ordinarily be due are prohibited during the forbearance period. Missed mortgage payments are to be added to the end of the term of the loan unless otherwise agreed to by the borrow and lender. Borrowers and mortgage holders are allowed to enter into alternative payment arrangements if they like. Finally, the lender is prohibited from making a report to a credit agency on account of the forbearance.
Mortgage holders such as banks are prohibited from publishing legal notices of foreclosure sales, entering or selling the mortgaged property, instituting a foreclosure in court or otherwise, or filing a complaint to determine the military status of a mortgagor under federal law.
Foreclosures of vacant or abandoned residential properties are excepted from the above mortgage-related provisions of the law.
Should you need assistance or have any questions concerning the new act, contact Peter I. Dunn at dunn@casneredwards.com or (617) 426-5900.
