Governor Baker Signs Moratorium for Evictions and Foreclosures in Massachusetts
Governor Baker has just signed and enacted into law a Moratorium for Evictions and Foreclosures in Massachusetts. The law impacts both residential and specific commercial properties, and has several key parts. First, it provides that a landlord or owner of a residential dwelling unit shall not, for the purposes of a non-essential eviction (which term includes non-payment of rent): (i) terminate a tenancy; or (ii) send any notice, including a notice to quit, requesting or demanding that a tenant of a residential dwelling unit vacate the premises. Thus, while a residential landlord could technically send a notice of default for non-payment, they cannot thereafter terminate the lease or suggest in any writing that they might terminate or demand the tenant vacate. There are exceptions, including for health and safety, and for expiration of lease term, but residential landlords must now put evictions on hold. While the above applies only to a residential dwelling unit, other sections impact commercial tenancies.
The bill also includes an order prohibiting the courts – in the context of any non-essential eviction for a residential dwelling unit OR a small business premises unit – from accepting a summons or complaint, entering judgment, or scheduling any events in summary process. Sheriffs are also prohibited from enforcing or levying for those same categories. A “small business premises unit” includes premises occupied by a tenant for a commercial purpose (profit and not for profit), but excludes tenants that operate multi-state, operate multi-nationally, are publicly traded, or have not less than 150 full-time equivalent employees. Thus, if you have a multi-national corporation as your tenant, this provision would not apply Also, distinct from residential landlords, commercial landlords are able to declare a default and terminate a tenancy, but the Courts themselves are still closed for all non-emergency matters through at least May 4, 2020. In addition, landlords cannot impose a late fee for non-payment of rent for a residential dwelling unit or small business premises unit, or report to a credit reporting agency, if within 30 days of the missed payment the tenant provides notice to the landlord that the missed payment was due to the financial impact from COVID-19. Interestingly, the bill permits property owners who received rent in advance for the last month of the tenancy to dip into those funds to pay for certain expenses, which may include mortgage payments, utilities, repairs and upkeep, provided that it cannot be used for non-payment of rent and that landlord must provide written notice to the tenant. Further, the bill provides that a creditor or mortgagee of a residential property that is not vacant or abandoned shall not cause a notice of foreclosure to be published, exercise a power of sale or right of entry, or file a SCRA Complaint. It also requires such creditors and mortgagees to grant a forbearance for not more than 180 days to those impacted by COVID-19. The bill’s moratorium expires 120 days after it is enacted or 45 days after Governor Baker rescinds his emergency declaration, whichever comes sooner.
If you have any questions on how this new law impacts you or your business, please contact your Bernkopf Goodman team member, or the author of this client alert, Jason Manekas at email@example.com or 617.790.3308, or Nick Schneider.
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