The Massachusetts Real Estate Law Blog | Featuring Attorney Richard D. Vetstein

Time 2020-10-09 23:07:01

Web Name: The Massachusetts Real Estate Law Blog | Featuring Attorney Richard D. Vetstein

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With Eviction Moratorium Expiring, Housing Court To Resume Hearing Cases With New Two-Tiered Case Scheduling System and Virtual Hearing Rules by Rich Vetstein on October 8, 2020 Housing Court Issues Major Change to Procedures To Tackle Backlog of Cases, and Address Covid-19 Safety ConcernsWith the Massachusetts Eviction Moratorium set to expire on October 17, and barring an extension from Gov. Baker or the passage of a new moratorium, the Housing Court is preparing for arguably the most challenging period in its history. Chief Justice Timothy Sullivan has just released a set of new procedural rules to manage all pending and future cases in the new normal of a Covid-19 world. The new rules dramatically change how all cases will be heard in the Housing Courts, with the vast majority of hearings being conducted via video-conferencing technology instead of in-person. Facing a backlog of some 20,000 pending eviction cases and an unknown number to be filed once the Moratorium expires, the goals of these new procedures are to: (a) start moving pending eviction cases forward, (b) establish new procedures for the filing and case management of new cases, (c) encourage mediation and private agreements as much as possible to decrease the backlog of cases, and (d) above all, keep litigants and court personnel safe. The new rules also contain a new affidavit requirement under the federal eviction moratorium issued by the Centers for Disease Control. The new rules can be found here: Housing Court Standing Order 6-20: Temporary modifications to court operations based on the coronavirus (COVID-19) pandemic and the expiration of chapter 65 of the acts of 2020 (eviction moratorium). Housing Court Physically Open for Business, But Most Proceedings Will Be VirtualThe Housing Court will be physically open with limited staff and judges, but the preference will be for cases to be heard virtually. The court is presently using the Zoom platform quite effectively, and I assume it will continue to do so. For self-represented (pro se) parties who may have limited access to technology, the court will assist that person with the video-conferencing technology or offer a suitable alternative. The old call of the list on Thursday morning hearing days with hundreds of people packed in hallways and courtrooms will now be a relic of the past, and is suspended indefinitely. Instead, going forward, the clerk s office will schedule cases and hearings directly with the parties or their lawyers, with the vast majority being on Zoom. This includes mediations. Lawyers are required to continue to E-File new cases and all pleadings. Rich s Practice Pointer: However it plays out, it s a safe bet to say that evicting anyone in Massachusetts going forward could take anywhere from 6-18 months. This makes mediation and private settlement agreements all the more attractive and cost effective for landlords.Pending cases will be scheduled for hearing in the order in which they were filed, i.e, earlier filed cases get priority. All tenant motions to vacate a dismissal or default for failure to appear between March 1, 2020 and the expiration of the Moratorium (Oct. 17, 2020) will be automatically granted by the court. The rules established a new two-tiered system to move cases forward. In Tier I, a housing specialist (who is typically a trained mediator) will schedule the first court event by video conference or telephone call. The purpose of the first event will be to determine the status of the case, whether the CDC federal moratorium applies to the tenant, attempt to mediate/resolve the case, and explore the availability of any housing assistance. If the case does not settle, the housing specialists and the clerk will hold a case management conference to determine the next steps in the case and/or schedule the case for trial. For Tier 2, the clerk will schedule the next court event by written notice. While the rule provides that trials should be held as soon as practical but no sooner than 14 days after the first tier event, I would have to assume that getting a trial date will be several months away, given the huge backlog of cases caused by the Moratorium. The new rules provide that trials will be held by video-conference, with a small sub-set being held in person, as determined by the Clerk Magistrate and First Justice. In a major change from existing practice, new cases will not be automatically scheduled for a trial on the typical Thursday morning schedule. (The rules provide that lawyers should now put TDB by court in the Summary Process Complaint where the the trial date would typically be listed.) Instead, the clerk s office will send out a notice of the first event, but the rules do not say when that will actually be. The clerk will also send out an information sheet with a resources available to assist the parties in resolving the case. Cases will then proceed based on the two-tiered system outlined above. The rules provide that all new eviction cases for non-payment of rent must be accompanied by a new affidavit indicating whether the landlord has received a hardship declaration under the CDC Eviction Moratorium. For pending eviction cases, the plaintiff must file the CDC affidavit before the first tier court event. The court is coming up with the new affidavit form which will be available on the court website. I believe that this new requirement will be controversial because it may prejudice landlords since the burden of claiming a Covid-19 related hardship remains with the tenant under the CDC Order. For those housing providers holding an execution for possession (move-out order) which has now expired, they may file a written request or motion for a new execution to issue, but they must file the CDC affidavit with it. These new executions will be issued administratively without a hearing. I would expect that tenants will be filing numerous motions to stay execution based on the Covid-19 pandemic, so we will have to see how the judges handle these. As it has done throughout the pandemic and Eviction Moratorium, the court will continue scheduling all emergency matters including those for injunctive relief (lockouts, condemnation, no heat, no water/utilties, access) or a motion for stay of execution. These proceedings will be scheduled virtually to the extent possible. All parties have a right to a jury trial in the Housing Court. Indeed, this is often used as a weapon by tenant attorneys to delay cases. The new rules provide that in-person jury trials with 6 jurors may resume on October 23, 2020, but I don t see how this is achievable. I think getting a jury trial date will be many months down the road for most cases. Like any major change to court procedures, it will take some time for litigants and court personnel to adapt to these new rules. Over the course of the pandemic, I have participated in several Zoom hearings as well as mediations in the Housing Court, and they have worked out just fine. For the mediations, the housing specialists have used the breakout room feature so parties can discuss matters in private. Trials conducted via Zoom will be a different animal, and lawyers will need to come up with some best practices for them. Another thing I m certain of is that it will take longer to move an eviction case through a post-Eviction Moratorium Housing Court. Perhaps many months longer, especially where there s a jury trial demand. The Court is facing an unprecedented backlog and situation with the pandemic plus the Moratorium, and it will take quite a long time for the court to make a dent in the backlog of cases plus we don t know how many new cases are on route. Whatever the actual number, it s been 6 months since new cases were allowed to be filed. However, I vigorously dispute the narrative put forth by the CityLife/Urbana Vida folks that 100,000 evictions are imminent. That s just unsubstantiated nonsense. At minimum, the CDC Moratorium may well delay a large number of non-payment cases until it expires on Dec. 31. Legislators Fast-Tracking 12-36 Month Eviction Moratorium Extension, Rent Freeze Bill, As Moratorium Set to Expire Oct. 17 by Rich Vetstein on October 6, 2020 Lengthy Extension of Eviction Moratorium Likely Unconstitutional; Calls for Adequate Rental Assistance Funding Go UnheededWith Gov. Baker signaling he won t extend the current Eviction Moratorium past Oct. 17, and Federal Judge Mark Wolf s ruling that an extended moratorium would likely be unconstitutional, state legislators and tenant rights activists are frantically pushing an even more draconian 12+ month extension of the moratorium along with a rent freeze. The wide-ranging proposal branded as the Housing Stability Act, is on the fast track to passage, just clearing the Joint Committee on Housing. The new bill coming out of the Joint Committee is H. 5018, and is causing alarm within the real estate community, with the Mass. Association of Realtors and Greater Boston Real Estate Board coming out strongly in opposition to the bill. The new bill would impose a new extended statewide moratorium on all non-essential evictions for at least 12 months after the Covid-19 State of Emergency is lifted by the Governor. This will cover 95% of all evictions, with the only exceptions being for serious criminal activity which threatens the safety of others. The State of Emergency, which is tied to federal disaster funding, will surely be in place until an effective Covid vaccine is available and infection levels are close to zero which could be years away. Thus, the proposed eviction moratorium could be in place for the 18-36+ months or even longer, on top of the existing moratorium which has been in place since April. The new moratorium, unlike other states moratoriums, does not require a tenant to demonstrate a Covid-19 hardship. The new eviction moratorium would be constitutionally suspect based on the 102-page ruling issued in late September by Federal Judge Mark Wolf considering housing providers challenge to the original Moratorium. (I am lead counsel in that case). Judge Wolf called into question the constitutionality of a moratorium which extended further past Oct. 17, ruling that: “A public health emergency does not give Governors and other public officials carte blanche to disregard the Constitution for as long as the medical problem persists.” If this new bill is enacted, rest assured it will face a swift and vigorous legal challenge. The bill imposes an across the board rent increase freeze for the next 12-36 months, regardless of whether a tenant is actually impacted by Covid-19. The bill prohibits housing providers from increasing rent payments in excess of the rental amount in place as of March 10, 2020. The rent freeze will be in place for 12 months after the Covid-19 State of Emergency is lifted. Thus, like the new eviction moratorium, the rent freeze could likely be in place for the next 12-36+ months. This will effectively stop landlords from agreeing to defer rent as an accommodation to financial hardship and enter into a payment plan that recovers the deferred rent through a new lease with a higher payment. This provision would also face legal challenge because it substantially impairs existing leases under the federal Contracts Clause. The bill also provides for “just cause” eviction protections to tenants. This has been on tenant group’s wish list for some time now, and has been rejected across the board in the last several years. Under the bill, landlords can only evict for “just cause” if:Tenant fails to pay rent (but no requirement to show Covid-19 hardship)The tenant has materially violated an obligation or covenant of the tenancy or occupancy, other than the obligation to surrender possession upon proper notice, and has failed to cure such violation within 30 days after having received written notice thereof from the owner; The tenant is committing a nuisance in the unit, is permitting a nuisance to exist in the unit, is causing substantial damage to the unit or is creating a substantial interference with the quiet enjoyment of other occupants; The tenant is using or permitting the unit to be used for any illegal purpose.Owner intends to make personal use of the unit within 180 days, including personal use or use by family member. With the just cause protections in place, rental property owners would be effectively prohibited from evicting tenants on a “no-fault” basis, such as terminating a tenancy at will, holding over past the lease term, or refusing a rental increase.In a first-of-its-kind proposal, the new bill gives the Housing Court exclusive jurisdiction to hear claims to recover unpaid rent. This is clearly intended to frustrate the collection of unpaid rent by housing providers who are able to file small claims in district courts across the state. The Housing Court will already be incredibly backlogged with pending and new eviction cases after the moratorium, and they have little interest in wasting their scarce judicial resources with small collection cases. This provision will essentially make it nearly impossible to collect unpaid rent balances. As I have been screaming from the rooftops since the first moratorium was passed, the fatal flaw with all of these proposals is that they remain unfunded. By my calculations, we need at least $300 Million in rental assistance funding. (Taking 100,000 renters at risk of eviction per tenant groups x $3,000 per tenant). The new bill purports to establish a new Covid-19 Housing Stability and Recovery Fund but it does not appropriate ANY funds for it. Proponents of the bill simply say that the federal government must fund rental losses. Without adequate rental assistance funding, the burden of Covid-19 impact will unfairly flow down from tenants to small housing providers who are equally unable to sustain those losses. The new bill also provides for certain state tax credits for rental losses. However, there is a cumbersome application and approval procedure that housing providers must use to obtain these credits, rather than being able to simply claim the credit on personal tax returns. Landlords who claim tax credits cannot proceed with an eviction. Also, state credits are typically quite low (based on 5% state income) so it would not amount to much benefit to owners. This bill now moves to the Joint Committee on Rules where it may be amended. Tenant groups are planning a week long push next week to pass this bill. With over 80 co-sponors, it appears the bill has a strong chance of passing on Beacon Hill. The question will be whether Gov. Baker will sign or veto, and whether the State House can obtain a veto-proof 66% vote. If you are opposed to this bill, I urge you to email the members of the Rules Committee below, as well as your own state rep and senators. Federal Judge Mark Wolf: Eviction Moratorium Constitutionally Problematic If Extended Past Oct. 17 by Rich Vetstein on September 25, 2020 The COVID-19 pandemic is not a blank check for the Governor and other elected officials. U.S. District Court Judge Mark Wolf Issues Landmark 102-Page Opinion on Constitutionality of Massachusetts Eviction Moratorium; Gov. Baker Signals He Will Allow Moratorium to Expire On Oct. 17As readers of this blog know, I, along my colleague Jordana Greenman, Esq., are lead counsel for several housing providers in a federal court challenge to the Massachusetts Eviction Moratorium in the case ofBaptiste v. Kennealy, United States District Court – Massachusetts, CA 1:20-CV-11335(MLW). For the past three months, we have been battling with the Attorney General s Office over the constitutionality of the Moratorium and whether the court should enjoin it. After five days of hearings and thousands of pages of legal briefing, Judge Mark Wolf has issued a landmark 102-page opinion in the case. The opinion is embedded and linked to below. A public health emergency does not give Governors and other public officials carte blanche to disregard the Constitution for as long as the medical problem persists. In a nutshell, Judge Wolf declined for now to enjoin the Moratorium, reasoning that legislators had a reasonable basis for enacting it as a temporary emergency measure back in April during the beginning of the pandemic. However, and most notably, Judge Wolf expressed serious concerns over the constitutionality of the Moratorium if it is extended past its current expiration date of Oct. 17. Judge Wolf wrote: The COVID-19 pandemic is not a blank check for the Governor and other elected officials. Rather, it should be recognized that a public health emergency does not give Governors and other public officials carte blanche to disregard the Constitution for as long as the medical problem persists. As more medical and scientific evidence becomes available, and as States have time to craft policies in light of that evidence, courts should expect policies that more carefully account for constitutional rights. In other words, in deciding how to exercise their broad discretion in responding to the evolving COVID-19 pandemic, elected officials have a duty to consider the limitations imposed by the Constitution, rather than merely to rely on courts to remedy any violations of it. As Justice Anthony Kennedy has written, the very fact that an official may have broad discretion . . . makes it all the more imperative for him or her to adhere to the Constitution and to its meaning and promise. Judge Wolf also recognized that the Moratorium imposes a substantial impairment of leases between housing providers and tenants across the state: The rights to evict and recover property if a tenant does not pay rent are important elements of the contractual relationship that a lease creates. The Moratorium deprives the landlords of a remedy for a violation of these rights while it is in effect. It does not prevent a landlord from suing a tenant for rent owed. However, that remedy will often be illusory because landlords are unlikely to benefit from money judgments against tenants who are unable to pay rent during the COVID-19 pandemic or who are unwilling to do so. Therefore, the Moratorium materially undermines the contractual bargain.”Judge Wolf did rule in our favor that the Moratorium Regulations violate the First Amendment as they force housing providers to provide a state mandated missing rent notice which directs tenants to pro-tenant advocacy groups like City Life/Urbana Vida. Echoing many of Judge Wolf s concerns, and as the Boston Globe reported yesterday, Gov. Baker suggested he won’t extend the moratorium. Instead, he wants to devise a system that protects both renters and landlords. “We would really like to see if we can put a plan together to make sure that we can do, with the courts, what needs to be done to ensure that people are protected with respect to their housing,” Baker said. “But the longer this thing goes on, the deeper the hole gets, not just for tenants but also for landlords, especially small landlords who . . . have in many cases already run out of rope.”We would like to think that our lawsuits and Judge Wolf s ruling will play a significant factor in Gov. Baker s ultimate decision whether to allow the Moratorium to expire. We want to make clear that our clients, and housing providers across the state, do not want mass evictions during the Covid-19 pandemic. As we have said from the start, if the state had enacted a large rental assistance funding package from the start, we would likely not be in this situation where thousands of private landlords have been forced to subsidized housing for tenants impacted by the pandemic. We are ready, willing and able to work with the courts and tenant groups to put reasonable safeguards in place to assist tenants if the Moratorium is lifted. I cannot stress enough how important rental assistance funding is. What is Next? CDC Eviction Moratorium In Place Until Dec. 31, Housing Stability ActEven if the Massachusetts Moratorium expires on Oct. 17, the new CDC federal eviction moratorium will be in place through Dec. 31. However, the CDC order is far narrower than the Massachusetts moratorium. Tenants must affirmative certify under oath they are financially impacted by Covid-19, and it does not apply to expiration of leases, for cause situations (like bad behavior or criminal activity) and to many no fault situations. At a recent Bench-Bar conference, several Housing Court judges stated the court will likely allow service of notices to quit and accept eviction filings unless tenants affirmatively raise the CDC order as an affirmative defense to the eviction. Also, the National Apartment Association and a group of housing providers have challenged the CDC Order in Atlanta federal court. We will see how this will play out. State legislators and tenant activists also continue to advocate for a 12 month extension of the moratorium through the Housing Stability Act, but again, without meaningful rental assistance funding. A few million dollars in RAFT funding will not cut it. We need upwards of $200 million dollars or more in state rental assistance funding, and unfortunately, that is nowhere to be found right now. Based on Judge Wolf s ruling, I believe the Housing Stability Act s 12 month eviction moratorium would likely be unconstitutional. To all of our faithful supporters, donations to our Legal Fund would also be very much appreciated as we put our law practices on hold for several months now while spending hundreds of hours on this case:  Link: https://paypal.me/pools/c/8orbLzpxbY Centers for Disease Control (CDC) Issues Nationwide Eviction Moratorium Through Dec. 31 by Rich Vetstein on September 3, 2020 CDC Eviction Moratorium Pushes Boundaries of its Public Health Authority, Raises Other Serious Constitutional ProblemsWhile we have been in federal court arguing the constitutionality of the Massachusetts Eviction Moratorium, the Trump administration s Centers for Disease Control and Prevention (CDC) just issued an emergency order (embedded below) imposing a nationwide residential eviction moratorium through December 31, 2020. The moratorium, issued under the CDC s emergency authority to respond to public health crises and without the usual rule-making and public comment process, would cover millions of renters who are unable to pay their rent due to the Covid-19 crisis. The moratorium is scheduled to be effective as of September 4, 2020. Unfortunately, the moratorium does not provide for any rental assistance funding to landlords or tenants, so like the Massachusetts moratorium, private landlords will again shoulder the entire economic burden of rental losses.The CDC Eviction Moratorium only applies in states where they do not have an existing residential eviction moratorium, or if they do, where it is less strict than the CDC order. Thus, in Massachusetts, the CDC order would not apply while the current moratorium is in place through October 17, because the Massachusetts moratorium is far stricter than the CDC order. Governor Baker could extend our state moratorium for an additional 90 days, and of course, our challenge to it is still pending in federal court. If Gov. Baker does not extend the state moratorium past Oct. 17 or the federal court strikes it down, this new CDC moratorium would take its place through Dec. 31. The CDC retains the authority to extend the moratorium for any amount of time. Of course, by then there could be someone new in the White House. Unlike most other states eviction moratoriums, the CDC eviction moratorium requires that tenants take an affirmative step to qualify for protection. Tenants must send their landlord a CDC-approved form in which they certify under oath that they are:Unable to pay rent due to a coronavirus-related job loss or income reduction, or qualified fora direct stimulus payment under the CARES Act or expect to earn less than $99,000 in 2020, or $198,000 if filing a joint tax return.Have made best efforts to obtain all available government assistance to cover rent;Is unable to pay full rent due to a substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out of pocket medical expenses;Is using best efforts to make timely partial payments of rent that are as close to the full payment as the individual s circumstances may permit, taking into account other non discretionary expenses; andEviction would likely render the tenant homeless or force him/her to move into and live in close quarters in a new congregate or shared living setting because the tenant has no other available housing options. Unable to pay rent because of financial hardship due to Covid-19, that they have made your best efforts to make timely partial payments and that they would likely become homeless if evicted.The order is unclear how all of these certifications will be confirmed for truthfulness. Most likely, state courts will have to establish a process where a landlord can challenge a tenant s hardship declaration. The order does specifically say that tenants are not relieved of the obligation to pay rent, but the overall intent of the order is to ban evictions for renters who cannot pay their rent. The CDC eviction moratorium only applies to non-payment of rent situations, as outlined above. It does not apply to the following situations where a tenant engages in:Criminal activity on the premisesThreats to the health and safety of other residentsDamage or posing an immediate and significant risk of damage to propertyViolations of building, sanitary and health codesViolating any other lease provision, other than the payment of rentThe order, which is quite poorly drafted, applies to any action by a landlord, owner of residential property, or other person with a legal right to pursue eviction or possessory action, to remove or cause the removal of a [tenant] from residential property. Without further definition or clarification, we don t know whether the CDC order would prohibit notices to quit/vacate, commencing an eviction case, prosecuting an existing eviction case, or just the final judicial act of issuing a move-out order. The CDC eviction moratorium also provides for incredibly severe and punitive penalties and even criminal liability for landlords who violated it. Landlords can be fined up to $100,000, or up to $250,000 if the violation results in death. The Department of Justice is also authorized to bring civil and criminal charges against landlords. While I have not yet done a deep dive into the legality of the CDC eviction moratorium, having just fully briefed the federal court on the constitutionality of the Massachusetts eviction moratorium, many of the same problems are clearly present here. There would be an argument that the CDC moratorium constitutes a taking of rental owner s property in violation of the Fifth Amendment, a substantial impairment of leases under the Contracts Clause, a violation of the right to petition and access courts under the First Amendment, and a ban on commercial speech under the First Amendment. There also appear to be substantial problems with the CDC s authority to issue such a sweeping economic regulation under its public health authority, as well as its by-passing of the usual administrative rule making procedures under the federal Administrative Procedures Act. As we told Judge Mark Wolf yesterday the CDC eviction moratorium has no impact whatsoever on our legal challenge to the Massachusetts eviction moratorium. However, we are looking into challenging the CDC order here in Massachusetts. If you are a landlord and receive a hardship form from a tenant under the new CDC order, please contact me via email at [email protected]. Federal Court Will Consider Constitutionality of Eviction Moratorium After State Judge Declines to Issue Injunction by Rich Vetstein on August 29, 2020 Federal Court Judge Mark Wolf (Boston Globe Staff photo by Ted Fitzgerald)Suffolk Superior Court Justice Paul Wilson Leaves Moratorium In Place, But Federal Judge Mark Wolf To Hear Arguments on Federal Constitutionality Next Tuesday For those following the state and federal lawsuits against the Eviction Moratorium (where I am lead counsel), it was a roller-coaster week. While we were arguing the case in federal court on Wednesday, Suffolk Superior Court Justice Paul Wilson released his ruling declining to issue an injunction against the Eviction Moratorium. (See below). We were of course disappointed in the decision, however, it will have no impact on the federal case. This is because we removed all of the federal constitutional claims (First Amendment, Right to Petition, Takings and Contracts Clause) to federal court earlier. The state court case only dealt with state constitutional issues. In any event, we are considering an appeal of Judge Wilson s ruling as we feel he gave the state too much deference and there may have been some incorrect legal analysis. In the federal court case, Judge Wolf rejected the Attorney General s argument that he abstain from hearing the case in light of the pending state court case, reasoning that a federal court is duty-bound to hear the constitutionality of the law. Judge Wolf also raised the possibility of the Attorney General engaging in settlement discussions with us or agreeing to mediation. My comment was of course we would consider that but the AG has always been fighting this tooth and nail and that hasn’t changed. The AG attorney confirmed that. Judge Wolf also made an interesting comment about the state s successful pandemic response — essentially that while a Moratorium may have been reasonable back in April, it may not be so reasonable now since Massachusetts has done so well against the virus. Interesting comments as we head into a week of hearings on whether the landlords are entitled to a preliminary injunction stopping enforcement of the Act, starting Tuesday, Sept. 1 at 130pm. Mark your calendars! It will be publicly available. Sign up form below:Access to the hearing will be made available to the media and public. In order to gain access to the hearing, you must sign up at the following address:https://public.mad.uscourts.gov/seating-signup.html.Anyways, this case has been quite the interesting ride. The good news is that we are still in this fight, and very much so! Thank you again for all your support. Funding link for donations to legal fees is here:https://paypal.me/pools/c/8orbLzpxbYIn the federal case (Baptiste v. EOHED, USDC, CA 1:20-cv-11335), we have added Governor Baker as a defendant, and are seeking that the court order him to rescind his recent extension of the Moratorium through Oct. 17, as well as enjoin him from any future extensions.We have also added a new plaintiff, Jonathan DaPonte, a former combat veteran in Operation Iraqi Freedom. DaPonte is a small landlord in Fall River, who works as a local funeral director. His tenant has not paid him thousands of dollars in rent since April, telling him “you can’t evict me so I am not paying shit.” The tenant is still working, has no Covid-19 related hardship, and like many tenants across the state, is taking advantage of the Moratorium to get out of paying rent, as we claim in our lawsuit. A husband and father of two small kids, Mr. DaPonte has been picking up extra hours at his funeral director job, in order to cover his rental losses due to the Moratorium. These stories are playing out across Massachusetts. Jon, like so many other housing providers, are being forced by the state to provide free rental housing to their tenants. The Moratorium has been a disaster and completely unfair for housing providers across the state. A link to our new Amended Complaint is below. The Attorney General has been fighting us tooth and nail, filing hundreds of pages of legal briefs and a motion to dismiss the case, arguing that the state enjoys sovereign immunity against any lawsuits. We have filed an opposition to that motion. Earlier in the case, we were successful in persuading Judge Wolf to deny four tenant groups, including City Life/Urbana Vida s attempt to directly intervene in the case and file friend of the court briefs. We just got word today that Judge Wolf will conduct a hearing in the case on August 24, 2020 at 10am! We aren t sure if it will be live-streamed or not, but we ll let you know here. In the state case pending in Suffolk Superior Court, we had a three hour hearing on July 30th (blog post here), and are waiting for Judge Wilson to rule on the case, hopefully soon! We appreciate everyone s donations and hope to see them keep coming.For those wishing to donate online, the link ishttps://paypal.me/pools/c/8orbLzpxbYThe Boston Globe did a good piece today on how the case is receiving national attention, with friend of the court briefs filed by major rental property groups, the ACLU, and 30 U.S. big cities. Update: The live stream is no longer available, but I have the audio only below: Small Rental Property Owners, ACLU, National Rental Managers, 30 Major Cities Weigh In On Constitutionality of Massachusetts Eviction Moratorium by Rich Vetstein on July 26, 2020 Over 30 Organizations and Individual Landlords Impacted by Eviction Moratorium File Friend of the Court (Amicus Curiae) Briefs In State Court ChallengeOur lawsuit challenging the Massachusetts Eviction Moratorium Act, which Gov. Baker just extended to Oct. 17, has received national attention in the form of friend of court briefs just filed by a slew of organizations representing the rental housing community, medical and public health profession, tenant advocacy groups, major municipalities, and even the American Civil Liberties Union (ACLU). The Suffolk Superior Court (Hon. Paul Wilson) has scheduled a hearing on Thursday, July 30 at 10AM to consider the Plaintiff Landlords request to issue an injunction stopping any further enforcement of the Moratorium. Below is a list of amicus submissions, and I have created a Dropbox link where anyone can read all of the briefs (which are quite interesting): Dropbox Link Amicus Briefs, Matorin v. Commonwealth of MA. Jon DaPonte, military vet, tenant owes him $7,000, told him to F-off, destroyed the apt. He cannot do anything about tenant due to Moratorium.Carlos Baez: Small rental owner of multi-family. Tenant owes me $10k, damaging unit, I cannot bring eviction action under Moratorium. We should all be in this together. Marie Baptiste: Nurse originally from Haiti. Tenants owe her $18k, won t even communicate with her. Has limited means, stuck for foreseeable future. Baris Berk: Tenant hasn t paid since Jan. 1 (before Covid19), owes $14k+, I m trapped, cannot even send a notice of termination to tenant under Moratorium.Bruce Metcalf: father of special needs daughter, owns small rental property in Rockland. Tenant owes thousands in back rent, has to dip into his own 401k to stay afloat.Mark Horn from Falmouth. Sec. 8 tenant was being evicted for damaging unit. Judge ruled for Mark, and Mark gave tenant 5 month extension to move. On eve of move out, Moratorium passed, and case suspended. Any short term emergency halt on evictions should have immediately been followed up by a funded solution for how to pay those rents to the landlords providing the essential housing. Charles SachettaMassLandlords, Inc.National Institute of Rental ManagersJMA Housing LLC (Jeff Abrams) and Small LandlordsSmall Property Owners Association, Cranberry Holdings LLCHealth Law AssociatesJewish Alliance for Law Social ActionNational Housing Law Project/Metrowest Legal ServicesCity Life/Vida Urbana, Chelsea Collaborative, Lynn United for Change, Springfield No One LeavesMassachusetts Coalition for the HomelessACLU, Harvard ProfessorsCitizens Housing and Planning Association (CHAPA), Mass. Public Health Ass’n, Massachusetts Ass’n of Community Dev. Corps.Cities of Chicago, Boston, Baltimore, Cambridge, LA, Oakland, Seattle, Somerville, et al.Medical Legal PartnershipTo all our supporters who are reading this, I would be remiss if I did not bring up the subject of legal fees and donations. At this point, Jordana Greenman and I are basically working for free, and we have many many hours of work going forward. All of our funding has come from generous folks like you, but we need to spread the word out again. Funding link here:  https://paypal.me/pools/c/8orbLzpxbY.  Thank you!!!Also, please share this post. I have embedded the small landlord stories below, which are quite compelling. The Moratorium, originally enacted in April, will now be in place for a total of six months, while small rental property owners face additional financial hardship from tenants who cannot or refuse to pay rent. The Moratorium unfortunately does not provide for any rental assistance fund to offset losses for rental housing providers. As posted on this Blog, I am lead counsel in a state and federal lawsuit challenging the Moratorium on several constitutional grounds. The lawsuits are proceeding quickly, with a hearing in Suffolk Superior Court on July 30, and a hearing in federal court on August 6.If there s any silver lining with this announcement, it is that the proposed bill extending the Moratorium for 12+ months *may* have a lower chance of passing, given that Baker went ahead and extended the original Moratorium. We will see. With the two lawsuits, we are still fundraising and remain way short of our goal, with triple the work. At this point, my co-counsel, Jordana Greenman and I are essentially working for free. Feel free to donate again and pass the link around:  https://paypal.me/pools/c/8orbLzpxbY  Federal Court Challenge to Massachusetts Eviction Moratorium Filed by Small Housing Providers by Rich Vetstein on July 16, 2020 Federal Lawsuit Filed by Marie Baptiste, a Nurse Originally from Haiti Who Is Owed Nearly $19,000 in Back RentUpdated (9/25/20): Judge Wolf Rules That Extension of Moratorium Past Oct. 17 Likely Unconstitutional; Gov. Baker Signals No ExtensionAs the Legislature and Gov. Baker consider extending the Eviction Moratorium Act, which expires Aug. 18, a new lawsuit challenging the Moratorium has been filed in Federal Court in Boston. I am lead counsel in the case, along with my colleague, Jordana Greenman, Esq. The case is Baptiste v. Commonwealth of Massachusetts, United States District Court Massachusetts, CA 1:20-CV-11335 (MLW). The federal suit is filed by Marie Baptiste, a long time dedicated nurse originally from Haiti, who owns rental property in Randolph. Unfortunately Ms. Baptiste s tenants owe her nearly $19,000 in back rent, and they refuse to even communicate with her. Under the current Eviction Moratorium, she cannot even send out a notice to quit or start a new eviction case. If the Act is extended, as new legislation provides, she will be forced to house these non-paying tenants potentially for another 12+ months, which will certainly result in financial ruin. The second plaintiff is Mitch Matorin, who owns rental property in Worcester and has a pending Housing Court eviction against his tenants who owe him $7,200 in back rent. Ms. Baptiste s and Mr. Matorin s stories are being replicated throughout the state as thousands of small rental housing providers struggle to keep afloat during the Covid-19 crisis. In the new lawsuit, we are seeking to strike down and enjoin the Moratorium, as unconstitutional. The Moratorium has shut down virtually every pending and future eviction case statewide since April 20, 2020. Massachusetts has survived the Civil War, Great Depression, two World Wars, the 1917 Influenza pandemic, and numerous recessions, and until now has never implemented a wholesale moratorium on the exercise of the most basic right underlying the entire field of rental housing, the right to evict.We believe that the Act violates the following four separate constitutional rights of our clients:(1) the right to petition the judiciary; (2) the right of free speech under the First Amendment; (3) the right to just compensation for an unlawful taking of their property under the Fifth Amendment; and (4) is an unconstitutional impairment of their leases under the Contracts Clause of the U.S. Constitution. Housing providers like Marie and Mitch remain obligated to pay their mortgages, real estate taxes, insurance, and water/sewer used by non-paying tenants, and to maintain their properties in compliance with the state sanitary code, while being deprived of the revenue required to do those things. With the Governor having the unfettered right to extend the Act for unlimited 90-day periods and ongoing legislative efforts to extend the moratorium for a full year or longer, this one-sided obligation and burden will continue indefinitely.Many small rental property owners, especially those on fixed income rely on rents to afford to live in their own homes.The case has been assigned to Judge Mark Wolf. The court will schedule a hearing on our request for an injunction, likely in early August. Our lawsuit in Suffolk Superior Court is still pending. We have a major hearing on July 30 (with friend of the court briefs due July 24), and with this new federal case being filed, we are hopeful that two lawsuits in play will give pause to legislators and the Governor as they consider whether to extend the Moratorium and the new extension bill, H.D. 5166.Thank you all for your continued support. We would be remiss if we didn’t post the link to our fundraising Paypalhttps://paypal.me/pools/c/8orbLzpxbY. We have spent many many hours and long nights on this case, as you can imagine. Our legal brief can be read below. Superior Court Agrees to Fast Track Eviction Moratorium Challenge, Seeks Friend-Of-The-Court (Amicus Curiae) Briefs by Rich Vetstein on July 13, 2020 Justice Paul Wilson, Mass. Superior CourtSuperior Court Justice Paul Wilson Sets Preliminary Injunction Hearing for July 30, Asks For Amicus Curiae Briefs Filed by July 24After the Supreme Judicial Court sent our legal challenge to the recently enacted Eviction Moratorium Act back down to the Suffolk Superior Court, the case is now moving quickly. Justice Paul Wilson, who was specially assigned to preside over the case, has issued briefing and scheduling orders, and has invited affected property owners (and tenants) to file friend-of-the-court (amicus curiae) briefs by July 24, 2020. He has scheduled a hearing on the plaintiff rental property owners motion for a preliminary injunction to enjoin the Act, for July 30, 2020. Judge Wilson s order inviting amicus briefs is embedded below. If you are a rental property owner and have an interest in submitting a friend of the court brief detailing how you have been impacted by the Moratorium (and the possibility of it being extended further), please contact me ([email protected]) or my co-counsel, Jordana Greenman ([email protected]), and we can coordinate with you. The hearing on July 30 will most likely be on Zoom, and we are not sure yet of whether it will be open to the general public. We ll keep you posted! Legislators Seek 12+ Month Extension to Eviction Moratorium, Rent Freeze, Just Cause Tenant Protections by Rich Vetstein on July 2, 2020 Rental Housing Providers Strongly Opposed to 12+ Month Proposed Eviction Moratorium Extension, Rent Freezes Without Adequate Financial ReliefState Rep. Mike Connolly (D-Cambridge) and Rep. Kevin Honan (D-Allston), the lead sponsors of the Eviction Moratorium Act, have filed a wide-ranging tenant protection bill as the COVID-19 crisis wears on into the summer months. The COVID-19 Housing Stability Act (H.D. 5166) would extend the Eviction Moratorium for at least 12 months, as well as freeze rents statewide for a one year period after the COVID-19 emergency lifts. The bill also provides for just cause tenant protections, foreclosure relief, and establishes a Housing Stability and Recovery Fund, but without any specific funding source. As I will outline below, the bill is extremely problematic for, and one-sided against, rental property owners in a number of respects:The bill would prohibit any eviction for non-payment of rent until 12 months has expired from whenever Gov. Baker lifts the COVID-19 State of Emergency. Thus, all non-payment evictions would likely be prohibited statewide until 2022, because Gov. Baker will keep the Emergency Declaration in place for as long as possible. The measure also allows any city/town to unilaterally extend the ban on evictions*forever*by an act of the city/town council.The bill also prohibits recovery of unpaid rent in any pending eviction, if the non-payment was caused “in any way, directly or indirectly” by COVID-19. The bill then creates a rebuttable presumption that the tenant falls within that category, shifting the burden of proof to the property owner who must prove by “clear and convincing evidence” that failure to pay was not based in whole or in part” on Covid-19. Running a 4 minute mile is easier than satisfying this standard, and virtually guarantees that landlords will be unable to evict based on non-payment even if tenants are simply refusing to pay, and also guarantees that owners will be unable to ever recover any unpaid rent. Combine this with a later provision which prohibits any credit reporting for non-payment of rent, there is little financial incentive pay rent. The bill also provides for certain just cause eviction protections to tenants. Just cause (the Jim Brooks Rent Stabilization bill) has been on tenant group s wish list for some time now, and has been rejected across the board for the last several years. Under the bill, landlords can only evict for just cause if:The tenant has materially violated an obligation or covenant of the tenancy or occupancy, other than the obligation to surrender possession upon proper notice, and has failed to cure such violation within 30 days after having received written notice thereof from the owner; The tenant is committing a nuisance in the unit, is permitting a nuisance to exist in the unit, is causing substantial damage to the unit or is creating a substantial interference with the quiet enjoyment of other occupants; The tenant is using or permitting the unit to be used for any illegal purpose.Non-payment of rent unrelated to financial hardship due to COVID-19With the just cause protections in place, rental property owners would be effectively prohibited from evicting tenants on a no-fault basis, such as holding over past the lease term or refusing a rental increase. The bill effectively imposes an across the board rent increase freeze for the duration of the COVID-19 Emergency plus 12 months after it is lifted. So there can be no rent increase whatsoever on *any* tenantregardlessof whether they are affected by COVID-19. This will effectively stop landlords from agreeing to defer rent as an accommodation to financial hardship and enter into a payment plan that recovers the deferred rent through a new lease with a higher payment. And as noted above, there is no other mechanism for a landlord to have an enforceable agreement to recover any unpaid rent.This is true even if the tenant is completely amenable to it, because any such agreement is declared to be contrary to public policy and unenforceable.So the existing Moratorium, which purportedly required continued payment of rent and encouraged payment plans, is now meaningless – any such payment plan is now null and void.The bill sets up a Housing Stability and Recovery Fund, but provides no specific funding for it whatsoever.This Fund is to provide assistance to owners who were “unable to pay housing and housing-related costs” due to COVID-19.It is unclear what “housing and housing-related costs” mean, but it clearly does not mean that the money (if any) can be used to reimburse landlords for unpaid rent. At best, it might allow some payments to landlords if they were “unable” to pay taxes, insurance, maintenance, mortgage because of COVID. The bill also requires an Oversight Board that comprises “members of the Legislature’s coronavirus working groups” – not clear who that is who then select 8 people from communities hardest hit, considering race/ethnic/income impacts. I must have missed rental property owners from this list.Similar to the existing Moratorium Act, the bill provides for foreclosure relief. However it does contain a poison pill of sorts. While the bill extends mortgage forbearance to non-owner-occupied if owned by a non-profit or a small landlord (15 or fewer residential “apartments ), it requiresanyonewho obtains mortgage forbearance, whether owner-occupied or small landlord, “must forever waive and hold harmless tenants from the obligation to pay that month’s rentfor each rental unit located on the property”In other words, if you need mortgage forbearance because *some* tenants are not paying and you can’t cover the mortgage, you must *waive all rent from all of theothertenants in that property* as well.Seems rather draconian.While we all realize that the Covid-19 crisis has caused unprecedented financial hardship for many tenants, it has also created unprecedented financial hardship for small landlords as well. The fundamental problem with the first Moratorium and this new bill is that it does not FUND what it seeks to accomplish. Without adequate funding, this bill simply shifts the economic devastation from tenants to small rental property owners who are in no better position to undertake millions of dollars in losses. Moreover, a 12+ month long Moratorium would raise significant constitutional problems, as has been raised in the recently filed legal challenge to the original Moratorium. It s not an exaggeration to say that this bill would be a total and complete disaster to the rental housing market, and ultimately would hurt both tenants and small rental housing providers. SJC Punts On Challenge to Eviction Moratorium Act by Rich Vetstein on June 25, 2020 Mass. Supreme Judicial Court JusticesSJC Sends Case Down to Suffolk Superior Court; Rental Property Owners Gear Up For Federal Court FightAs many of you know, I am lead counsel in the legal challenge to overturn the COVID-19 Eviction Moratorium Act, which was filed with the Supreme Judicial Court at the end of May. The case is Matorin v. Chief Justice of the Housing Court, SJC-2020-0442. The Attorney General s Office agreed with us that the SJC should take up the case. However, yesterday, Justice David Lowy ordered the case sent down to the Suffolk Superior Court for consideration of all the issues raised by the petition. Suffice to say, we are very disappointed that the SJC has declined to take up the constitutionality of the Eviction Moratorium, which is causing widespread financial and personal harm to rental housing providers across the state. Perhaps the Act is simply too much of a political hot potato for the SJC to weigh in during this global pandemic. Justice Lowy provided no reasoning or rationale for taking such action. See Order below. Nevertheless, the case will still proceed in Suffolk Superior Court and we have lost nothing except for some time. The merits of our claims have not yet been addressed and will be considered by the Superior Court in due course. We will do everything we can to fast-track the case. The case has been specially assigned to the very well respected Justice Paul D. Wilson, appointed by Gov. Patrick and formerly a partner at Mintz, Levin. Despite this, we are not going down without a fight. We have decided to file our federal constitutional claims in Federal Court in Boston, seeking to strike down the Moratorium. We are hopeful that the federal court will give us a fair shot. I’ll keep you posted on that front as well.It seems like we are fighting everyone on these important issues for the rental property community. Meanwhile, state Cambridge Rep. Mike Connolly and Congresswoman Pressley just held a virtual town hall on Facebook, and said they are filing a bill to extend the Moratorium for 12 MONTHS. They are also filing a bill to FREEZE rents, as well as RENT CONTROL. Obviously, this would be devastating to rental housing providers. We could use some positive PR and stories about small landlords being really hurt by this Moratorium.This fight will go on — to the end. I ll keep you posted. Also, with more litigation, comes more legal fees and expenses. We are still seeking donations to the cause. To contribute please click our secure Paypal link:https://paypal.me/pools/c/8orbLzpxbY. Federal CARES Act Eviction and Foreclosure Moratorium Extended To August 31 by Rich Vetstein on June 18, 2020 HUD Director Dr. Ben CarsonFederal COVID-19 CARES Act Eviction and Foreclosure Moratorium Extended Another Two MonthsHUD Secretary Ben Carson announced yesterday that federal housing agencies have extended the CARES Act eviction and foreclosure moratoriumsthrough August 31 for tenants and homeowners with Fannie Mae, FHA, VA, USDA-insured single-family mortgages. The current moratorium was set to expire on June 30.“While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” said HUD Secretary Ben Carson. “Our foreclosure and eviction extension means that these families will not have to worry about losing their home as they work to recover from the financial impacts of COVID-19.”The CARES Act eviction moratorium applies to approximately 28% of all rental properties in the United States. It prohibits the eviction of tenants residing in any single-family or multifamily property financed by federally backed mortgages (Fannie Mae, Freddie, FHA, VA, USDA loans) and renters living in federally assisted housing (Section 8). Overlap With Massachusetts Eviction Moratorium ActFor Massachusetts rental property owners, the state already has a statewide eviction and foreclosure moratorium in place until August 19, 2020 which covers virtually every residential rental eviction situation. The Massachusetts Moratorium does not have any distinctions between federal insured or non-insured mortgages; rather, it covers the type of eviction, i.e, non-essential vs. essential evictions. Gov. Baker may extend the state Moratorium for unlimited 90 day increments. The general consensus in the rental housing community is that Baker will extend the Moratorium through the end of 2020. However, led by yours truly, two landlords have filed a legal challenge to the Moratorium with the Supreme Judicial Court, which is pending. If the Massachusetts Eviction Moratorium is struck down, the CARES Act Moratorium will still be in place, at least through Aug. 31. That could be extended as well, however. There are several databases and search websites to see if your rental property has a federally backed mortgage subject to the CARES Act NHLP has created a searchable database of multifamily projects subject to federal eviction moratoriums,https://nlihc.org/federal-moratoriums?ct=t%28update_041720%29The CARES Act provides foreclosure protections for borrowers with property secured by federally backed mortgage loans. Borrowers who affirm they are experiencing a COVID-19 related hardship can request a forbearance from their loan servicer of up to 180 days, which can be extended for an additional period of up to 180 days. Except with respect to a vacant or abandoned property, servicersmay not initiate a foreclosure, move for judgment, or order a sale, or execute a foreclosure-related eviction or foreclosure sale until August 30, 2020. { 0 comments } State Reps Using COVID-19 Crisis To Push Rent Control, Just Cause Eviction Measures by Rich Vetstein on June 14, 2020 State Rep. Mike Connolly (D-Cambridge)Self-Proclaimed Socialist State Rep. Sponsors Rent Control and Tenant Protection Bills; Measures Pass Important CommitteeAfter passing the nation s strongest COVID-19 Eviction Moratorium, a group of far left legislators are now using the Coronavirus public health crisis to push many more controversial measures, including Rent Control and Just Cause Evictions. The Legislature’s Joint Committee on Housing voted last week to recommend passage of two measures that would let cities and towns impose rent control and other tenant protections, effectively undoing a 1994 ballot measure that banned rent control in Massachusetts.One bill (H.B. 3924), sponsored by self-proclaimed socialist Rep. Mike Connolly of Cambridge (pictured left), would establish a new Tenant Protection Act, enabling towns and cities to restore local rent control boards. However, this measure goes much further, seeking to adopt a radical wish list of tenant protection proposals previously rejected over the last several years. These include new anti-displacement zones, stricter condominium conversion rules with mandatory tenant relocation payments, a broad just-cause eviction statute (which the Legislature previously rejected a year ago), mandatory rent deposit installment plans, and other tenant-favorable provisions. The other bill (H.B. 1319) would cap rent increases at the annual change in the Consumer Price Index (CPI) or 5%, whichever is less. The only exception to this would be for owner-occupied units of three-family homes or less with a Sec. 8 or other federal/state subsidized tenant. As I ve written here before, Rent Control is an experiment tried and failed many times before, and universally rejected by economists. The great thing about the 1994 vote banning rent control is we now have empirical data and a reliable study from prominent economists which has compared the Cambridge housing market during rent control vs. after rent control. We also have data and a similar study out of San Francisco. Both studies (and others from the past) have found that rent control did not work at all, and actually had the exact opposite effect — contributing to gentrification, displacement of tenants and income inequality.The bills fate is far from clear. Lawmakers have a host of issues on the agenda before their formal session ends in July, and have been voting remotely, which has slowed the legislative process. Baker signaled his opposition to the bill when it was first filed last year, saying it would hinder construction of new housing, though he has said little about it lately. Rental property owners should email their representatives to reject House Bill 3924 and House Bill 1319. { 0 comments } Constitutional Challenge to COVID-19 Eviction Moratorium Act Filed With SJC by Rich Vetstein on May 29, 2020 Rental Property Owners File Emergency Petition with Massachusetts Supreme Judicial Court Asserting COVID-19 Eviction Moratorium Act Is Unconstitutional Attorney Richard D. Vetstein and his colleague, Jordana Roubicek Greenman, Esq., have filed an Emergency Petition with the Supreme Judicial Court on behalf of two local rental property owners challenging the constitutionality of the recently passed, Act Providing For a Moratorium On Evictions and Foreclosures During the COVID-19 Emergency and the its regulations. A copy of the Petition can be viewed below.One of the plaintiffs is a elderly woman on a fixed income whose tenant owes her over $6,000 in back rent and told her The Governor says I don t have to pay my rent anymore. She risks bankruptcy and foreclosure if something isn t done. The other plaintiff has a non-payment eviction in progress in Worcester Housing Court, and is owed several months of rent with no likelihood of any payment while the Act suspends his case. As outlined in the Petition, the Eviction Moratorium Act imposes an unprecedented and indefinite shutdown of virtually every future and pending eviction case in the state, as well as prohibiting landlords from even issuing notices to quit.The Petitioners, two local rental property owners saddled with non-paying tenants whom they cannot evict, claim irreparable harm on behalf of themselves and all other similarly situated rental property owners across the state.The Petitioners assert the Act is an unconstitutional infringement on their constitutional right to access the courts and right to petition. They also claim the Act is an unconstitutional interference by the Legislature on the core functions of the courts. Further, the Act operates as a taking without just compensation because it forces rental property owners to house non-paying tenants without any recourse. Lastly, the Petitioners argue the Act violates the U.S. Constitution’s Contracts Clause as it unconstitutionally impairs their lease agreements. The operation of the Act obligates rental property owners to pay their own mortgages, real estate taxes, insurance, and water/sewer used by non-paying tenants, and to maintain their properties and comply with the state sanitary code, while being effectively deprived of the revenue required to do those things.Given the unpredictable nature of the COVID-19 pandemic, this one-sided obligation and burden will continue indefinitely and quite possibly into 2021.Many small rental property owners, especially those on fixed income, rely on rents to afford to live in their own homes.The Supreme Judicial Court is expected to take up the case next week, and will hopefully schedule it for hearing. I will provide you with updates of course. We are also still seeking donations to the cause. To contribute please click our secure Paypal link: https://paypal.me/pools/c/8orbLzpxbY. Emergency Regulations, Required Notices, and Forms Issued For COVID-19 Eviction Moratorium Compliance by Rich Vetstein on May 7, 2020 New Mandatory Forms and Regulations Released in Wake of Eviction Moratorium ActOn April 20, 2020, Gov. Baker signed into law An Act Providing for a Moratorium on Evictions and Foreclosures During the COVID-19 Emergency (the “Act”), which puts in place a moratorium on non-essential evictions of residential and small business tenants during the COVID-19 state of emergency. The Executive Office of Housing and Economic Development (EOHED) has released follow up regulations to ensure compliance with the Act. Several mandatory notices and forms have also been released which will be discussed and linked to below. The Regulations expire 120 days after the effective date of the Act, or 45 days after the state of emergency has been lifted, whichever is sooner, unless further extended by the secretary of EOHED. A link to the new regulations is here: 400 Code of Mass. Regulations 5.0: COVID-19 Emergency Regulations Under the Moratorium and the new regulations, landlords are prohibited from issuing a notice to quit for non-payment of rent, may not impose late fees for non-payment, or notify a credit reporting agency of the non-payment of rent if the tenant provides a notice and documentation of a financial impact from COVID-19. Instead, the new regulations allow landlords to send a new type of notice for a late or missing rent payment, called a Notice of Rent Arrearage which must contain the following special language:“THIS IS NOT A NOTICE TO QUIT. YOU ARE NOT BEING EVICTED, AND YOU DO NOT HAVE TO LEAVE YOUR HOME.An emergency law temporarily protects tenants from eviction during the COVID-19 emergency.The purpose of this notice is to make sure you understand the amount of rent you owe to your landlord.”“For information about resources that may help you pay your rent, you can contact your regional Housing Consumer Education Center.For a list of agencies, seehttps://www.masshousinginfo.org/regional-agencies. Additional information about resources for tenants is available athttps://www.mhp.net/news/2020/resources-for-tenants-during-covid-19-pandemic.”“You will not be subject to late fees or a negative report to a credit bureau if you certify to your landlord in writing within 30 days from the missed payment that your non-payment of rent is due to a financial impact from COVID-19.If possible, you should use the approved form at:https://www.mass.gov/lists/moratorium-on-evictions-and-foreclosures-forms-and-other-resources.If you cannot access the form on this website, you can ask your landlord to provide the form to you.You may also send a letter or email so long as it contains a detailed explanation of your household loss in income or increase in expenses due to COVID-19.”The notice may also include other information that will promote the prompt and non-judicial resolution of such matters, such as the total balance due, the months remaining and the total of lease payments expected to be made on a lease for a term of years, information on how to contact the landlord to work out a revised payment arrangement, and a reminder that after the state of emergency ends the tenant may face eviction if rent remains unpaid. The notice should also also have language informing the tenant of the importance of having it translated to their native language. Under the Moratorium Act, tenants are allowed to provide notice and documentation of a Covid-19 related financial hardship to their landlords, in order to avoid negative credit reporting. EOHED has issued forms so residential and commercial tenants can provide notice and documentation of a COVID-19 related financial hardship. Those forms can be found here (click on link):Under the new regulations, a tenant who misses multiple rent payments due to a financial impact from COVID-19 is required to provide a separate notice to the landlord for each such missed payment.The use of an alternative written form of notice by a residential tenant shall be deemed effective and timely if it includes a statement that the tenant has experienced a financial impact from COVID-19, and states in reasonable detail the cause of such financial impact. Under the Moratorium, a landlord who has a last month s rent deposit may use it to pay for mortgage payments, utility costs, maintenance costs and other operating expenses incurred by the landlord for the leased premises. The last month s deposit, however, must be accounted for and paid back if necessary, with accrued interest, at the end of the lease or tenancy. This is one of the reasons why I do not recommend that landlords utilize this remedy. If the landlord uses a last month s deposit it must provide the following form to the tenant:We will keep you updated with further development on the Eviction Moratorium and any further regulations or guidance issued by the state. I still believe that the Act is unconstitutional on several grounds, and myself along with several other lawyers are getting ready to file a legal challenge to the Act. If you are interested in donating or participating in the case, please contact me at[email protected]. We have set up a secure Paypal funding link for any donations here:https://paypal.me/pools/c/8orbLzpxbY.{ 0 comments } Remote Virtual Notarization Act for COVID-19 Emergency Enacted by Massachusetts Legislature by Rich Vetstein on April 23, 2020 New Laws Allow Video-Conferencing Technology For Notarization of Legal Documents during COVID-19 Crisis Update 4/28/20: Gov. Baker has signed the bill. Remote virtual notarizations are now allowed during the COVID-19 State of Emergency! After what seemed like an eternity during this unprecedented COVID-19 crisis, the Legislature has finally passed a bill providing for the remote virtual notarization of legal documents through video-conferencing technology. The measure will be in place temporarily during Gov. Baker s declared COVID-19 State of Emergency, and will dispense with the legal requirement for in-person notarizations of real estate, probate and other legal documents requiring a notary public stamp. After over a month of intense lobbying by attorneys and the banking industry, and several revisions to the original bill, the House and Senate finally agreed on a final language today. The measure now goes to Gov. Baker s desk where he is expected to sign it shortly. This is great news for everyone in the real estate industry as the new law will allow attorneys, paralegals, buyers, and sellers to sign important legal documents safely in their homes during the COVID-19 crisis. The new law, An Act Providing for Virtual Notarization to Address Challenges Related to COVID-19, provides for a series of requirements and steps to effectuate a valid remote virtual notarization Remote notarizations may be conducted through video-conferencing technology such as Zoom or FaceTime. No specific type of technology is spelled out, but we are hearing that title insurance companies and lenders will require real estate closing attorneys to use approved virtual notary software. Some may not however. All remote notarizations must take place with both the notary and the signatory within Massachusetts state lines. For example, a Massachusetts notary cannot notarize a document of a person signing in New York. The signatory must show the notary a government issued photographic form of identification (a state issued driver s license is OK). Non-US citizens must show a valid passport or government I.D. A copy of the front and back of the I.D. must be sent to the notary which must be retained for 10 years. The notarization must otherwise be conducted in the usual manner over video-conference with the notary observing the actual signing of the legal document and taking the required affirmation, i.e., this is your free act and deed. The original notarized documents must then be sent back to the notary, and for real estate closings, a second video conference must be conducted where the signatory authenticates the signed documents. Once the above process is complete, the notary or attorney can stamp the documents as notarized, and must also complete and sign an affidavit attesting that all requirements have been met. The affidavit must be kept on file for 10 years. Each video-conference conducted under the law must be recorded and retained for 10 years. For real estate transactions and certain probate documents (will, trust nomination of guardian or conservator, durable power of attorney, health care proxy or caregiver authorization, only licensed attorneys (or a paralegal under their supervision) may conduct a remote notarization. For real estate closings, a second form of I.D. may be required. The new law expires 3 days after Gov. Baker lifts the COVID-19 State of Emergency, at which time, only standard in-person notarizations will be allowed. The text of the bill is embedded below. In an unprecedented, sweeping, and likely unconstitutional move, the Massachusetts Legislature has passed, and Governor Charlie 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 all evictions and foreclosures in Massachusetts during the COVID-19 Emergency and possibly well beyond. The new law is in effect until 45 days after the Coronavirus (COVID-19) Emergency is lifted by Gov. Baker, or four (4) months, whichever is earliest, however, Gov. Baker is permitted to extend the law for 90 day increments. The Eviction Moratorium covers 90% of all evictions (summary process), including non-payment and no-fault evictions, both residential and commercial. The only exception is if a tenant is engaged in criminal activity or a lease violation which impacts the health and safety of other residents or first responders. Under the Act, Housing and District Courts will not even accept new eviction filings. Eviction cases which are already pending in court are effectively suspended until the law expires. (Under previous Housing Court orders, all evictions have been stayed until May 4). Eviction move-out orders are also suspended. All court deadlines and statutes of limitations are suspended. Further, Landlords are prohibited from issuing notices to quit or terminating a lease. Late fees for unpaid rent are also banned. Landlords are also barred from reporting delinquencies to credit reporting agencies if the tenant provides documentation of financial hardship related to the COVID-19 crisis. Throwing a bone to landlords, the Act allows them to use last month deposits to pay for mortgage and property expenses, but they must account for the deposit at the end of the tenancy. (I don t see any benefit there at all). The Act does not suspend the obligation to pay one s rent. As stated above, the eviction moratorium also applies to certain small business commercial spaces. Small businesses are defined as any in-state for-profit and non-profit business with less than 150 full-time equivalent employees. It does not apply to chains or businesses operating multi-state, multi-nationally, or publicly traded companies. Commercial landlords may, however, issue payment default notices and notices to quit. Under the Act, all residential property foreclosure proceedings are prohibited and suspended. The Act appears not to give foreclosure relief to investment or rental property owners, and that is one of the glaring inequities as discussed below. Lenders are banned from sending foreclosure notices, filing Land Court Servicemembers proceedings, conducting foreclosure auctions, or otherwise engaging in any foreclosure related action under state law. The Act also requires banks to grant up to 180 days of mortgage forbearance to homeowners who have been hurt by the coronavirus crisis. However, the forebearance will be added to the end of the term of the loan. The foreclosure relief part of the law expires 45 days after the Covid Emergency is lifted, or 4 months, whichever is sooner, but the Governor may issue 90 day extensions. The Act does not suspend the obligation to pay one s mortgage. Analysis: Potentially Devastating Impact to Small Property Owners, Potential Unconstitutionality of LawLet me just say that I have compassion for everyone suffering through this pandemic. I have friends who are Covid-19 positive. My business is down, as are my colleagues and friends. I m actually in favor of widespread financial relief for anyone who has been financially impacted by this crisis. However, as I have pointed out from the very beginning of this debate on evictions, the flaw with this bill is that it does not provide for corresponding meaningful mortgage, foreclosure and real estate tax relief to rental property owners. It only goes one way. There s no doubt that many tenants are in dire financial straights, but without providing similar relief to small landlords, they will be bearing the financial brunt of this crisis. And that s simply unfair. This Act will likely result in widespread suspension of rent payments by tenants because there is now no enforcement mechanisms for landlords and very little if any financial repercussions. Activists are already calling for rent strikes. As Gregory Vasil, CEO of the Greater Boston Real Estate Board, correctly stated to Bisnow, the bottom line is, if you are an owner on the commercial or residential side, you likely won t be getting rent until sometime in the third quarter or fourth quarter of 2020. If you end up in legal proceedings against a tenant, you very likely aren t going to be getting rent until sometime in 2021. Aside from the financial considerations, there are also a number of constitutional and legal flaws with the law under the Massachusetts State Constitution, including violating the right to access courts, the Equal Protection Clause, usurping the exclusive role of the judiciary, violating the Takings Clause, and other major problems. We have not seen this type of sweeping restriction on property owner rights since the days of rent control. State legislators are essentially telling Housing Court judges how to do their job. Judges are already well-equipped to deal with this crisis, and have been doing so admirably. Shutting down the courthouse doors to only landlords and lenders while keeping it open to everyone else smacks of unfair and unequal treatment. I think this Act has a high chance of being struck down by the Supreme Judicial Court. With the backing of MassLandlords, our statewide trade association, a group of talented attorneys including myself are exploring a legal challenge to the Act. If you are interested in donating or participating in the case, please contact me at [email protected]. We have set up a secure Paypal funding link for any donations here: https://paypal.me/pools/c/8orbLzpxbY. Your Invited! Boston Globe Business Reporter Jon Chesto to Speak About COVID-19 by Rich Vetstein on April 15, 2020 My weekly Real estate Corona-Therapy Zoom meeting is back on for tonight at 730pm.I have another special guest. Boston Globe Business Reporter Jon Chesto will talk about COVID-19 impacts on real estate and business in general. Zoom link below:Join Zoom Meetinghttps://us02web.zoom.us/j/2622828798CDC Eviction Moratorium Pushes Boundaries of its Public Health Authority, Raises Other Serious [...] For those keeping track of our legal challenge to the Eviction Moratorium Act, tomorrow July 30 [...]

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