Client Alert: Massachusetts Moratorium on Evictions & Foreclosures

Massachusetts Governor signs Statewide Act Providing for a Moratorium on Evictions and Foreclosures During COVID-19 Emergency

By Molly M. Carroll and Brendan P. Slean

On April 20, 2020 Massachusetts Governor Charlie Baker signed into law An Act Providing For a Moratorium on Evictions and Foreclosures During the COVID-19 Emergency (the “Act”). Effective immediately, the Act authorizes a temporary state-wide restriction on “non-essential evictions” for residential and small business unit tenants and impacts the ability of residential landlords to issue notices to quit and utilize the court system to enforce rental payment during the COVID-19 Emergency. The Act also limits the ability of creditors and mortgagors to foreclose on residential property and mandates temporary loan forbearance.

Outline of the Act

The Act has three main sections: sections 3, 4 and 5. Each section may be extended for additional periods of time depending on the Governor’s orders and the length of time that the COVID-19 Emergency Declaration remains in effect. While this Act may delay and defer landlords’ ability to file eviction actions against both residential and small business tenants, nothing under the Act relieves tenants of their obligations to pay rent and perform under the obligations of their lease.

Section 3: Effect of Eviction Moratorium

Temporary ban on “non-essential evictions” for residential and “small business premises unit” tenants.

A “small business premises unit” is defined as a premise occupied by a tenant for commercial purposes, but does not include premises that are occupied or operated by large multi-state or multi-national companies or businesses with more than 150 employees, or is in common control with a company that has the aforementioned characteristics.

A non-essential eviction is an eviction resulting from a foreclosure, non-payment of rent, or for no fault or cause.

The Act does not prohibit landlords from pursuing eviction actions against commercial tenants that operate outside of Massachusetts, are publicly traded, or have 150 or more full-time equivalent employees or against residential tenants when health and safety would be at risk by an ongoing tenancy.

Who is impacted?

1. Residential Landlords

2. Small Business Unit Premises Landlords

3. Residential Tenants and Small Business Unit Tenants

4. Court System

How are they impacted?

1. Residential Landlords: While the Act is in effect, a residential landlord may not attempt to evict or terminate a tenancy or send a notice to quit or demand a residential tenant vacate a premises for purposes of a “non-essential eviction”

a. Landlords are limited in their ability to bring a court action to enforce evictions.

b. Landlords may not impose late fees for non-payment of rent or furnish residential payment data to commercial reporting agency related to non-payment of rent, if the tenant provides notice and documentation to landlord that non-payment of rent was due to a financial impact from COVID-19.

2. Small Business Unit Premises Landlords: Landlords of small business units also may not enforce “non-essential evictions.” However, they may still evict small business unit premises tenants (1) due to the expiration of a term or lease of tenancy that occurred prior to March 10, 2020, or (2) due to a default of the small business premises lease or tenancy that occurred before March 10, 2020.

3. Residential Tenants and Small Business Unit Tenants: For the duration of the Act, landlord or property owners may not attempt to evict a tenant or foreclose on a property or send notice to quit or vacate the property if it is a “non-essential eviction.”

a. Landlords may not impose late fees for the non-payment of rent for the duration of the Act as long as the tenant provides notice to the landlord regarding the inability to pay rent due to the impact of COVID-19 within 30 days after the missed rent payment.

b. Deadlines and time period for actions related to “non-essential evictions” for residential dwellings and small business premises units are tolled for the duration of the Act.

TIP FOR TENANTS: If you are unable to pay your rent due to the impact of COVID-19, you are encouraged to immediately send your landlord notice and documentation relating to your inability to pay rent due to the effects of COVID-19. Tenants have a 30-day period from the non-payment of rent to notify their landlords to have the Act’s waiver over late fees and credit reporting apply.

c. The Executive Office of Housing and Economic Development recently published a series of notice forms and documentation that should be used by tenants to notify landlords of non-payment of rent due to financial hardship related to COVID-19:

4. Court System: For the duration of the Act, a court having jurisdiction over summary process may not perform actions in relation to a “non-essential evictions” for both small business unit premises and residential dwellings including the following:

a. (i) accept for filing a writ, summons or complaint in relation to a “non-essential eviction” for a residential unit or small business premises; (ii) enter a judgment or default for a plaintiff for possession of a residential dwelling or small business unit in relation to a “non-essential eviction”; (iii) issue an execution for possession of a residential unit or small business premise unit in relation to a non-essential eviction. Additionally, courts may not deny the request of a defendant for a stay of execution or a request by a party for the continuance of a summary process case or schedule a court event, including a summary process case.

How long does Section 3 of the Act remain in effect?

1. 120 days after the effective date of the Act, April 20, 2020, or 45 days after the COVID-19 emergency declaration has been lifted, whichever is sooner. The Governor may incrementally extend Section 3 of the Act up to 90 days at a time.

Section 4: Effect Of Landlords’ Use Of Tenants’ Advance

Payment For The Last Month’s Rent

Who is impacted?