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With an eviction and foreclosure moratorium now in effect in Massachusetts, what does this mean for the state’s residential and commercial landlords and lenders?
The bill, signed by Gov. Charlie Baker Monday afternoon, contains several key points. Its text is available online.
No ‘Non-Essential’ Evictions: Residential landlords and landlords of small businesses and nonprofits can’t evict a tenant who isn’t able to pay rent due to the coronavirus or the recession it’s caused.
Under the law, “small business” is defined as a business that operates solely in Massachusetts, is not publicly traded and has less than 150 staff.
However, landlords will still be able to evict tenants whose leases expired or who otherwise defaulted before the coronavirus state of emergency was declared.
Tenants Must Document Struggles: To be protected under the act, tenants must give their landlords notice within 30 days of a rent deadline that they can’t pay rent due to economic hardships caused by the pandemic. The state Executive Office of Housing and Economic Development is tasked in the law with developing forms for this purpose.
No Notices to Quit: Landlords can’t send tenants notices or requests to vacate a unit. Tenant advocates lobbied for the inclusion of this provision because, they said, such notices can make a tenant unfamiliar with state law think they have to move out in the middle of the pandemic.
Landlords are also barred from setting deadlines by which a tenant must answer a “complaint” about rent payment.
Courts Won’t Accept Filings: Any state court with jurisdiction over housing matters won’t accept any filings related to an eviction case. The courts are also barred from issuing eviction orders or even scheduling court dates in eviction cases.
No Late Fees or Credit Reports: Landlords are barred from charging tenants late fees for missed rent payments if they show they were economically hurt by the pandemic.
Both landlords and mortgage-holders are barred from reporting missed mortgage or rent payments to credit reporting agencies.
Paying for Repairs: Landlords are allowed to dip into the money a tenant has paid up-front for the final month’s rent in order to pay their own mortgages, utility bills or for repairs or other maintenance on the property. However, they must notify their tenant in writing if they do this and they still have to apply the full amount of the last month’s rent payment to its original purpose and pay the tenant all the interest they would have accrued if the money went untouched.
Forbearance for Residential Loans: Anyone who bought a property with a residential loan, whether they are a landlord or a homeowner, is entitled to up to 180 days of forbearance on their mortgage under similar terms renters receive under the law. Interest and fees can’t accrue during the forbearance period, the lender is barred from reporting the forbearance or missed payments to credit agencies and the missed payments must be tacked on to the end of the mortgage’s term and not balloon at the end of the emergency.
This provision is broadly in line with many policies announced by individual lenders and a deal Boston worked out with the city’s 12 largest mortgage lenders.
Law Can Be Renewed: The law automatically expires after 120 days or 45 days after Baker lifts his COVID-19 emergency declaration. However, the governor is empowered to extend the law’s provisions by increments of 90 days or less.
Tenants and Mortgagors Must Still Pay: The law is explicit in saying tenants and mortgagors are still obligated to make their normal payments if they are able.
