ALERT: STATEWIDE MORATORIUM ON RESIDENTIAL AND SMALL BUSINESS COMMERCIAL EVICTIONS
On Monday, April 20, 2020, Governor Baker signed a new bill into law which dramatically restricts residential and commercial evictions in Massachusetts. A complete copy of the legislation can be found at the following link:
This new law is different from the federal moratorium on evictions which went into effect in late March 2020 pursuant to the CARES Act. The Massachusetts moratorium could potentially last longer than the Federal moratorium. It also applies to more properties. Although the new law specifically states that tenants are still obligated to pay rent during the moratorium, landlords will have no ability to enforce rent payment obligations while the moratorium is in place.
Moratorium on “Non-Essential” Evictions in Residential Tenancies
First, the new law halts all “non-essential” eviction activity in Massachusetts for residential tenancies. A non-essential eviction includes evictions based on non-payment of rent, evictions following foreclosures, no-fault evictions (such as failure to vacate at the end of a lease term), and any evictions based on lease violations that do not involve allegations of criminal activity or matters of public health and safety.
The impact of the law will be widespread. Landlords are prohibited from sending notices to quit or filing new cases for non-essential evictions. Landlords must stop sending out notices to quit for non-payment of rent. Additionally, the law prohibits courts from accepting new eviction filings, entering judgments, issuing executions for possession, or denying requests for stays in non-essential eviction cases. Finally, constables and sheriffs are prohibited from performing move outs in non-essential eviction cases until the moratorium ends.
All deadlines for legal action in non-essential eviction cases (including filing pleadings, appeals, use of executions) are automatically tolled while the moratorium is in place.
Certain Commercial Properties Are Subject to Moratorium:
Some commercial properties are subject to the non-essential eviction moratorium. The new law includes a restriction on non-essential evictions for “small business premises units.” A small business premises unit (“SBPU”) is defined as a premises occupied by a tenant for a commercial purpose (including not-for profits) that does not have any ownership interest in the leased premises. The definition of an SBPU also excludes commercial entities which operate nationally or in multiple states; publicly traded entities; and/or businesses with 150 or more employees.
Notably, the new law includes an exception that allows non-essential evictions of SBPU’s for defaults or tenancy terminations which occurred prior to the Governor’s declaration of the COVID-19 emergency in early March.
Timeline for Moratorium:
The moratorium on non-essential evictions is scheduled to last for 120 days (through August 18, 2020) or 45 days after the emergency declaration has been lifted, whichever is sooner.
Late Fee Restriction:
In certain circumstances, the new law prohibits landlords from charging late fees or reporting payment data to any credit or other consumer reporting agencies during the moratorium. This prohibition applies if the tenant provides written notice and documentation within 30 days of an event of non-payment showing that the default was due to the financial impact of the COVID-19 pandemic.
Last Month Rent May Be Applied to Landlord Expenses:
The new law states that landlords who received a last month’s rent payment from a tenant may use those funds to pay for expenses, such as mortgage payments, utilities, repairs and upkeep. However, the law prohibits use of a last month’s rent payment for a tenant’s own unpaid rent obligations. If the landlord pursues this option, the landlord will be required to provide written notice to the tenant and will still be obligated to apply the same amount to the tenant’s last month of rent with all interest accrued through the end of the tenancy as if the funds had not been used by the landlord.
If you are a landlord and you have a residential tenant or a tenant in a SBPU that is behind in rent, you must cease all non-essential eviction activity immediately. You may not send out a notice to quit, tenancy termination notice, or any equivalent documents. For now, we suggest you keep accurate records of what amounts are due from your tenants. Even though the moratorium is in place, the rent is still due and owing. When the moratorium ends, landlords will again be able to exercise their rights. Remember, however, if your tenant provides you with written notice showing the non-payment was due to the pandemic within 30 days of the default, you cannot charge a late fee. If you receive no such documentation, you may charge late fees provided the lease authorizes them.
If you are struggling to pay other expenses on your rental property, such as utilities and/or mortgage payments, you should consider whether application of a tenant’s last month’s rent is a viable option for you. Finally, if you have tenants who are engaging in any criminal behavior or engaging in any activity which threatens health or safety, you may be able to proceed with an eviction.
Attorney Andrew M. Kepple has more than 10 years of experience in state and federal courts, concentrating his practice in the areas of landlord-tenant law, civil litigation and employment law.
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