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On April 20, 2020 the Massachusetts legislature enacted a Moratorium on Evictions and Foreclosures During the COVID-19 Emergency.

Here are the key provisions of the Act:

1. “Non-essential” evictions and foreclosures are prohibited.

This means that no steps may be taken by a landlord or mortgage company to evict a tenant or foreclose a mortgage.  Such actions are permissible only when public health or safety is at stake.

2. The Act is effective for 120 days or for 45 days after the state of emergency ends, whichever happens first.

So evictions and foreclosures may resume 120 days after the Act’s effective date (April 20, 2020) or 45 days after Governor Baker ends the current state of emergency, whichever occurs first.

3.  Homeowners may receive a 180 day forbearance on mortgage payments. 

The Act requires mortgage companies to grant a 180 day forbearance to homeowners who have been financial harmed by the economic impact of COVID-19.  To receive this forbearance a homeowner must simply submit a written request to his mortgage company notifying them of his financial hardship and stating that a 180 day forbearance is needed.  Your lender cannot add additional interest, fees, or penalties for providing this forbearance.

4. Landlords cannot impose late fees for non-payment of rent if they are notified of a tenant’s financial hardship due to COVID-19.

This provision applies only if “the tenant provides notice and documentation to the landlord that the non-payment of rent was due to a financial impact from COVID-19”.  The act requires the executive office of housing and economic development to develop forms for the tenant to use in order to document his or her hardship.

5.  Neither landlords nor mortgage companies can furnish negative reports to credit bureaus if they have been notified of a tenant or a homeowner’s financial hardship due to COVID-19.

In other words, your credit score will not be negatively affected for non-payment of rent or for failure to make a mortgage payment if you give your landlord or mortgage company written notice for your economic hardship due to COVID-19.

6. If a landlord is holding a tenant’s last month rent payment, the landlord may use the funds to pay for necessary expenses related to the rental property.  

This provision allows a landlord to use funds advanced by the tenant for the tenant’s last month of rent in order to pay for “expenses, which may include, but shall not be limited to, mortgage payments, utilities, repairs and required upkeep.”  The tenant’s last month of rent must still be considered paid and the landlord cannot use these funds as compensation for rent payments that were not paid due to a COVID-19 financial hardship.

7. The Act applies to both residents and small businesses.

The Act protects “residents”, i.e., residential tenants and homeowners.  It also applies to small businesses.  A small business, according to the Act, is any business that operates exclusively within Massachusetts and has less than 150 full-time employees.

8.  The Act does not eliminate a tenant or homeowner’s obligation to eventually pay the full amount owed on his lease or mortgage.

Any payments that are not made during the effective date of the Act must be made at a future date.  However, the Act does not provide any direction for how this is to be done.

If you need legal representation, please contact me at justin@jrmccarthy.com