Non-Payment of Rent During Coronavirus

Non-payment of rent is an important issue for landlords, especially during the coronavirus pandemic and eviction moratorium. Here, I’ll discuss what landlords should do regarding tenants who owe them rent.

Non-Payment of Rent: What Landlords Cannot Do During the Eviction Moratorium

With the exception of evictions for emergency matters, landlords cannot evict tenants. This includes the sending of notices to quit and the filing of eviction cases. Doing so can get landlords into trouble.

Non-payment of rent is not considered emergency grounds for evicting. If a landlord is not receiving rent from their tenant, unfortunately, not much can be done now to remedy the situation.

Non-Payment of Rent: What Landlords Can (And Should) Do During the Eviction Moratorium

While landlords cannot evict now for unpaid rent, landlords can (and should) notify their tenants about unpaid rent. Massachusetts has recently issued a regulation on this matter, and explains the reason for doing so:

In order to minimize the risk that a tenant will face eviction for an accumulated non-payment of rent once the Act expires, and to promote the prompt resolution of such situations without resorting to the court system, landlords should provide tenants of residential dwelling units a written notice of each missed rent payment.

This regulation, notably, states that landlords should do this. As such, it is a good practice for landlords to send these notices. This regulation includes language that should be included in these notices, including a disclaimer that the notice is not requiring the tenant to leave the apartment (very important).

Final Thoughts

If you need assistance with a landlord-tenant matter, contact me for a consultation.

Eviction Moratorium in Massachusetts: FAQs

UPDATE: The eviction and foreclosure moratorium has been extended through October 2020.

As expected, Governor Baker signed into law “An Act providing for a moratorium on evictions and foreclosures during the COVID-19 Emergency.” This law puts the brakes on all current and future evictions for the time being.

Who’s Covered by the Eviction Moratorium?

The eviction moratorium applies to all residential landlords and tenants, and commercial “small business premises unit” tenants, who fit a narrow definition for a small business.

What’s Covered Under the Eviction Moratorium?

Landlords are not permitted to serve notices to quit, file eviction cases, or seek a default judgement against tenants. The moratorium also bans nearly all other possible action that could occur in an on-going eviction proceeding.

How Does This Affect Current Eviction Cases?

The eviction moratorium suspends any deadlines involved with a pending eviction case. In cases where the landlord has already obtained an execution for possession, the bill prevents landlords from being able to use it (known as “levying an execution”).

How Long Will This Last?

120 days after the passage of the bill or 45 days after the COVID-19 emergency declaration has been lifted . . . whichever is sooner. The Governor also has the power to extend this moratorium.

In essence, this means that, most likely, no evictions will be proceeding until July 2020, at the absolute earliest.

What Are the Exceptions to the Eviction Moratorium?

Evictions are allowed for cases concerning:

(a) criminal activity that may impact the health or safety of other residents, health care workers, emergency personnel, persons lawfully on the subject property or the general public; or

(b) lease violations that may impact the health or safety of other residents, health care workers, emergency personnel, persons lawfully on the subject property or the general public

There are also several exceptions for certain commercial evictions.

My take is that a landlord will need a strong, documented case against a tenant to even try one of these limited exceptions. Few judges are going to readily allow an eviction with the coronavirus ongoing.

Are There Any Protections for Landlords During the Eviction Moratorium?

The law allows landlords to use a last month rental deposit for “expenses”, such as mortgage payments and repairs. From my reading of the law, a landlord cannot use a last month rental deposit for unpaid rent alone.

If the landlord uses this deposit, the landlord must notify the tenant, inform the tenant that the deposit will still be applied for rent at the last month of the tenancy, and that the landlord must still pay the tenant interest on this deposit.

This is not allowed for a security deposit.

Must Tenants Continue Paying Rent During the Eviction Moratorium?

Yes. However, given this moratorium, a landlord will have limited means of doing anything about non-payment of rent for quite some time.

For landlords, be extremely careful when dealing with non-paying tenants. Any conduct that could be considered a “self-help” eviction is not worth the risk.

Final Thoughts

With the courts (and the rest of Massachusetts) closed, evictions aren’t happening anyway. This moratorium will continue this status quo for months ahead, and push most evictions into Summer/Fall 2020.

As I’ve written before, there will be an enormous backlog of cases when the courts reopen, from both existing cases and the inevitable future cases that will arise over the next few months.

If you need assistance with a landlord-tenant matter, feel free to contact me.

Tips for Obtaining Mortgage Payment Assistance

Due to the ongoing coronavirus pandemic, many homeowners will likely need mortgage payment assistance in months ahead. Here are some tips for homeowners in need of such help.

Speak to Your Lender

For anyone seeking mortgage payment assistance, the first step is to speak with your lender. Most lenders have some form of mortgage assistance available, which can sometimes be granted through a simple phone call with the lender.

The most important piece of advice for obtaining mortgage payment assistance is (1) get it in writing and (2) keep a timeline of your communications with the lender. If a problem arises later, having this information can be critical in trying to avoid foreclosure.

Understand the Relief Available

Most lenders are offering mortgage forbearances as assistance during the coronavirus pandemic. A forbearance is a postponement of mortgage payments. It gives the homeowner a break from paying their mortgage.

A forbearance, importantly, does not forgive what is owed, or permanently modifies the loan. A homeowner who receives a forbearance needs to remember that their mortgage payments will resume in the future.

I have a feeling that the federal government (and many lenders on their own) will be pushing through more permanent mortgage assistance options in the future, so additional relief may be available soon.

Foreclosures Are Not Occurring Anytime Soon

While many homeowners, understandably, are concerned about losing their homes, foreclosures will not be occurring soon, due to federal and state regulations. Homeowners, however, do need to be proactive in addressing these matters, as foreclosures will resume at some point in the future.

Conclusion

If you need assistance with a foreclosure matter, contact me for a consultation.

Payment Plans With Tenants: What to Know

With the ongoing coronavirus pandemic, many landlords are having an especially difficult time collecting rent from tenants. As the courts will be closed for the near future, landlords are best off trying to work out disputes with tenants on their own. Payment plans with tenants are a great option for attempting to resolve non-payment of rent.

Put Everything in Writing

Oral agreements are always problematic, particularly with any matter concerning real estate. With this in mind, repayment plans with tenants should always be in writing, and include the relevant details about the agreement. In particular, these agreements should state the total amount of owed rent, and when payments are to be made. Aim to be as specific as possible.

Reference The Original Tenancy Agreement And Your Intention to Preserve It

Payment plans with tenants should similarly reference the original tenancy agreement, and your intention to preserve it. Landlords need to be careful about entering into an agreement that could be considered a new tenancy agreement. Be clear that the payment plan is just that: an agreement for the tenant to repay the owed rent and preserve the existing tenancy, and not a new lease or tenancy agreement.

Encourage Tenants To Seek Rental Assistance

Given the enormous economic impacts of coronavirus, there are new resources available for tenants who cannot afford rent. Massachusetts’s Residential Assistance for Families in Transition (RAFT) program, for example, provides short-term assistance for tenants facing eviction. Massachusetts has recently increased funding for RAFT and similar tenant protection programs, and I won’t be surprised if additional aid is approved later on.

Landlords should absolutely encourage tenants to apply for such programs during this crisis. Such efforts can help landlords get their rent and avoid an eviction case after the pandemic passes.

Landlords, however, need to carefully review any paperwork for RAFT and other tenant protection programs. Some of these programs impose obligations on landlords, and landlords need to be certain that they can and will comply with any such requirements.

Conclusion

If you need assistance with a landlord-tenant matter, contact me for a consultation.

Evictions During Coronavirus

Evictions during coronavirus is a topic many Massachusetts landlords have been asking about in recent weeks. As the pandemic continues, this is a matter that will continue to be of importance to both landlords and tenants.

This state of affairs, of course, remains uncertain, but here are my thoughts about addressing a present tenant dispute.

No Eviction Hearings Until the End of April, At the Earliest

Housing Court is not scheduling eviction cases until the end of April (which may get pushed back). In essence, this means that there will be no evictions during coronavirus.

A landlord is permitted to request a court hearing before then, if they have good cause. “Good cause”, however, is likely to be a high burden to meet for most Massachusetts landlords. With the exception of a real emergency, I doubt any judge will permit an eviction to go forward during coronavirus.

Landlords who own homes with a mortgage backed by Housing and Urban Development (“HUD”), Fannie Mae, and Freddie Mac need to proceed with extra caution, as the federal government has temporarily suspended evictions for these types of properties.

Proceed with Caution for Notices to Quit

I’m not aware of any formal restrictions on serving a notice to quit while the pandemic is ongoing. While eviction cases will not be heard anytime soon, a notice to quit (which is a required precursor to most Massachusetts evictions) can still be served.

However, simply because a landlord can serve a notice to quit doesn’t mean it is the best idea right now. Given the ongoing crisis, it may be best to wait a while longer before taking such action.

Attempt to Work Out a Resolution On Your Own

What’s the best thing that landlords can do now, with no evictions during coronavirus ? Try to work out disputes with tenants on their own. If a tenant is behind on rent, try and see if you can work out a repayment plan. Such repayment plans should always be in writing and signed by both parties.

If a landlord is holding a security deposit from a tenant, a landlord may be tempted to use this money towards any owed rent. Landlords, however, need to use extreme caution when dealing with a security deposit, as even a minor violation of this law can result in steep penalties.

Conclusion

The coronavirus pandemic will end eventually, and landlords will be permitted to resume evictions again. Until then, Massachusetts landlords need to proceed with caution in any disputes involving tenants before then.

If you need assistance with a landlord-tenant matter, contact me for a consultation.