Summary of New Law Restricting Evictions and Foreclosures

Friends,

As part of our ongoing efforts to keep you advised of new legal developments during the COVID-19 Emergency, we are writing to advise you that Governor Baker has signed into law a new Act imposing a temporary moratorium on certain evictions and foreclosures.

Importantly, this new law does not relieve tenants from the obligation to pay rent to a landlord, nor does it restrict a landlord’s ability to ultimately recover rent owed by a tenant. Similarly, this new law does not relieve a homeowner from the obligation to make mortgage payments, nor does it restrict a lender’s ability to ultimately recover mortgage payments owed by a homeowner, Instead, this new law addresses what actions can and cannot be taken in relation to residential dwelling and small business premises unit evictions and residential mortgage forbearance and foreclosure actions during the COVID-19 Emergency. In summary, the new law provides as follows:

Eviction Moratorium

1.    Applies to both residential and small business premises units.

·     A small business premises unit is defined as one occupied by a tenant for commercial purposes where that small business tenant does not operate multi-state or multi-nationally; is not publicly-traded; or has 150 or more full-time equivalent employees.

2.    Temporarily stops all “non-essential evictions” by a landlord or property owner for a residential dwelling unit

·     A “non-essential eviction” is defined to include, among other things, eviction for non-payment of rent; eviction resulting from a foreclosure; eviction for no fault or no cause; and eviction for cause where the cause does not involve or include allegations of 1) criminal activity that may impact health or safety, or 2) lease violations that may impact health or safety.

3.    Temporarily prohibits landlords and owners of a residential dwelling unit from 1) terminating a tenancy; 2) sending any notice, including a notice to quit, that requests or demands that a residential tenant vacate the premises.

 4.    Temporarily prohibits courts that handle summary process (eviction) actions for “non-essential evictions” from taking action on these matters, stating that such courts shall not:

·     accept a writ, summons, or complaint;

·     enter a judgment or default judgement for a plaintiff for possession of a residential dwelling or small business premises unit;

·     issue an execution for possession of a residential dwelling or small business premises unit;

·      deny, at the request of a defendant, a stay of execution or, upon request by a party, a continuance of a summary process case; or

·     schedule a court event, including a summary process trial.

5.    Temporarily tolls deadlines or time periods for action by a party to a non-essential eviction for a residential dwelling or small business premises unit.

 6.    Temporarily prohibits a sheriff, deputy sheriff, constable, or other person from enforcing or levying upon an execution for possession for a non-essential eviction of a residential dwelling or small business premises unit.

7.    Temporarily prohibits a landlord from imposing a late fee for non-payment of rent or furnishing rental payment data to a consumer reporting agency related to non-payment of rent if, not later than 30 days from the missed rent payment, the tenant provides notice and documentation to the landlord that the non-payment was due to a financial impact from COVID-19.

·     Note: The new law requires the MA Executive Office of Housing and Economic Development to develop forms and recommendations to enable a tenant to provide a landlord with the notice required under this provision.

8.    Temporarily allows a landlord who received rent in advance of the last month of tenancy pursuant to M.G.L. ch. 186 sec. 15B to access and utilize the funds from said last month’s rent in advance to pay for certain expenses such as mortgage payments, utilities, repairs, and required upkeep. If electing to do so, however, the landlord must provide written notice to the tenant and maintain his or her other obligations concerning interest owed to the tenant on said funds.

 

Foreclosure Moratorium

1.    As to residential property that is not vacant or abandoned, the new law temporarily prohibits a creditor, mortgagee, or similarly situated person, for the purposes of foreclosure, from the following:

·     Causing a notice of foreclosure sale to be published;

·     Exercising a power of sale;

·      Exercising a right of entry;

·     Initiating a judicial or non-judicial foreclosure process; or

·      Filing a complaint to determine the military status of a mortgagor under the federal Service members Civil Relief Act.

2.    As to residential property, a creditor or mortgagee shall be required to grant a forbearance of not more than 180 days if the mortgagor of said property submits a request to the mortgage servicer affirming that the mortgagor has experienced a financial impact from COVID-19.

·     Note that the law restricts the creditor or mortgagor from applying fees, interest, or penalties beyond those calculated as if all contractual payments had been made on time. This provision does not, however, relieve the mortgagor from the obligation to ultimately make all payments owed under the mortgage contract – instead, all payments subject to the forbearance shall be added to the end of the term of the loan unless otherwise agreed.

3.    Where a mortgagor receives payment forbearance under this Act, the mortgagee is prohibited from furnishing negative mortgage payment information to a consumer reporting agency related to the mortgage payments subject to forbearance.

 

As always, if you have any questions or need assistance, please do not hesitate to contact us.

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