From left: Jordana Roubicek Greenman, Esq. and Richard Vetstein, Esq.
The number of reported cases is exploding, and events are changing daily, even hourly. I (attorney Vetstein) first wrote about the coronavirus (COVID-19) global pandemic on March 10. As of that writing (data as of March 9), there were 729 reported cases in the U.S., with 27 deaths. As of March 27, Johns Hopkins was reporting that the United States had surpassed China with more than 86,000 confirmed cases and more than 1,300 deaths. With the well-publicized testing delays, the real number of cases is likely far higher. As of this date, over 976,000 cases have been reported nationwide and 205,000 deaths. Unfortunately, Massachusetts has not been spared, with more than 53,400 reported cases, and 2,730 deaths.
On Monday, March 23, Gov. Charlie Baker issued a stay-at-home advisory, essentially closing down all “non-essential” businesses. Gov. Baker has now ordered the shutdown of all schools until fall and day cares through June 29, closed down restaurants and bars, and banned gatherings of more than 25 people. Last week, all trial courthouses were shut down for two full days. They have reopened, but not to the public and with very limited availability for hearing cases (other than true emergencies).
Of course, the big problem for the rental housing industry is that the economy has gone into the tank. Experts predict that unemployment will rise to Great Depression levels. The stock market has lost some 30 percent of its value. When people have lost their jobs and lost their savings, they can’t pay the mortgage or the rent.
Legislation for Eviction Moratorium
In Boston, Mayor Marty Walsh has announced a voluntary eviction moratorium agreement with the city’s largest landlords, including Trinity Financial, Winn Residential and the Community Builders, which manage hundreds of apartments in Boston. On Beacon Hill, legislators have filed a bill calling for a statewide moratorium on evictions during the pendency of the COVID-19 State of Emergency. At the federal level, the Department of Housing and Urban Development (HUD) has suspended all evictions for Federal Housing Administration-insured single-family residences. It’s unclear whether this also applies to HUD Section 8 rental subsidy participants. Lastly, Massachusetts Attorney General Maura Healey just implemented new regulations prohibiting consumer debt collection activities for a 90-day period. However, landlord-tenant payments are excluded from the regulation.
The problem with these legislative efforts, of course, is that there needs to be a corresponding moratorium on the payment of mortgages, real estate taxes and property expenses for rental property owners. Otherwise, small landlords will shoulder an enormous amount of the financial burden during this crisis. “If renters don’t have money to pay rent, landlords don’t have money, either,” Doug Quattrochi, executive director of the group MassLandlords, told the Boston Globe recently. “That’s money that pays plumbers and electricians and mortgage bills. If they’re a senior on a fixed income, it might be how they buy food.”
Gov. Baker initially indicated in an early press conference that he was not at a point where he would impose such a moratorium. However, as of Monday, April 20, a moratorium on evictions in Massachusetts is in place. The Legislature has passed, and Gov. Baker has just signed into law, “An Act Providing For a Moratorium On Evictions and Foreclosures During the COVID-19 Emergency” (House Bill 4647), a statewide moratorium on the vast majority of evictions in Massachusetts during the COVID-19 emergency — and possibly well beyond. The new law will be in effect until 45 days after the COVID-19 emergency is lifted by Gov. Baker, or four months, whichever is earliest. However, Gov. Baker is permitted to extend the law for 90-day increments. This moratorium, which the authors feel is unconstitutional, will disproportionately affect the small landlords.
The moratorium is likely to result in widespread “rent strikes” due to the fact that there is now no enforcement mechanism for landlords, and the moratorium results in tenants being given no financial repercussions for not paying rent. While this may be a loss that larger corporate landlords can handle, small landlords are left to shoulder an unsustainable financial burden.
Housing Court COVID-19 Response
Practically speaking, there also exists a de facto moratorium on evictions because the statewide Housing Court has deferred hearing eviction cases — initially through April 21 and now through at least June 1. Under new standing orders, all housing courts are closed to the public through at least June 1 and are hearing only emergency matters. All evictions (summary process) are impacted by the order and are currently on hold until at least June 1. A party may seek to advance their case upon a showing of “good cause,” but my feeling is that those will be quite rare. “Emergency matters” include the following circumstances: applications for injunctive relief; temporary restraining orders where a complaint involves a lockout, condemnation, no heat, no water, and/or no utilities; conduct and/or conditions endangering the health, safety and welfare of residential occupants and others; stay of levy on an execution; or where access is required to address an emergency (e.g., a burst water pipe, gas fumes, etc.).
We want to highlight the likely scenario that once this crisis (hopefully) ends, the Housing Court will be swamped with cases in spring/summer 2020. On average, the Boston Housing Court itself receives hundreds of new eviction cases weekly. The COVID-19 postponement is sure to result in a huge backlog of eviction cases for many months to come and even more crowding in the courthouses.
Legal Guidance: Advice to landlords dealing with tenants who cannot pay rent — You have to take a wait-and-see approach. Legally, you are not allowed to issue a 14-day notice to quit for nonpayment of rent, and you cannot file an eviction complaint in the Housing Court. It may have been a good idea to have an attorney send out a notice to quit to get the process started a week ago, but that is no longer an option. Speak to your tenants in an effort to come to an agreement on rent payments.
Stay-at-Home Order: Impact on Rental Agent Activities
Gov. Baker’s stay-at-home guidance/order appears to apply to real estate and rental agent activities. They are not specifically mentioned as one of the enumerated “essential” businesses, and their activities do involve much interpersonal contact in the ordinary course of business. Mayor Walsh has issued a formal letter advising rental agents not to hold showings of occupied rental units. He also issued guidance that any prospective tenants who are sick should not be allowed to view a unit in person, and he added that open houses should not be used to market properties that are for rent or for sale. Anecdotally, we’re hearing that some (but not all) rental agencies are shutting down operations and many are simply working remotely.
Legal Guidance: Showing rental properties in person is a violation of the stay-at-home order and incongruent with the public health policy behind it. Rental agents should instead use virtual showing technology, such as FaceTime and Zoom, to replicate in-person showings. Moreover, holding in-person showings could lead to someone getting infected with COVID-19, then a big lawsuit against the rental agent. We don’t want to see that either.
Move-in Delays
Many tenants are scheduled to move in the coming months and, while moving companies have been deemed “essential” under the stay-at-home order, many people may feel safer staying in place than moving to an unknown location. Landlords and tenants should be encouraged to work together in the event of delays. The moratorium will cause delays for those planning to move into apartments occupied by tenants who refuse to move out and whose leases are protected under the moratorium.
We (attorneys Greenman and Vetstein) created a COVID-19 Lease Rider addressing the issue of move-in delays during this crisis. While it may be tempting for a landlord to keep a prepaid first month’s rent, last month’s rent and security deposit in the event that a tenant either cannot move or feels unsafe doing so, this may open landlords up to liability, and legal claims are sure to ensue. We encourage the parties to work together and be flexible.
For current occupancies, landlords should remind their tenants to keep the apartments clean and sanitary. Most importantly, during tenant turnovers, landlords should hire a sanitization company (e.g., Service Master) to clean and disinfect units prior to a new occupancy.
Conclusion
Our collective appreciation goes out to the many health care and public service employees working to help combat this epidemic.
Massachusetts’s official COVID-19 website contains the most up-to-date information. The authors of this article are also available to consult regarding your current or pending landlord-tenant needs. Attorney Jordana Roubicek Greenman can be reached
here, and attorney Richard Vetstein can be reached
here.
Jordana Roubicek Greenman is a wellrespected landlord-tenant lawyer, well known in the various Massachusetts housing courts. She is also a writer for Massachusetts Bar Association publications and hosts seminars for landlords and small property owners through the Metropolitan Boston Housing Partnership.
Richard Vetstein is a leading landlord-tenant attorney and regularly practices in the Housing Court. He writes the well-known Massachusetts Real Estate Law Blog.