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Massachusetts Issues Moratorium on Evictions and Foreclosures

Posted By USFN, Wednesday, April 22, 2020

by Joseph A. Camillo, Jr., Esq.                        
Brock and Scott, PLLC
USFN Member (AL, CT, FL, GA, MA, MD, ME, MI, NC, NH, OH, RI, SC, TN, VA, VT)

On April 20, Massachusetts Governor Charlie Baker signed into law “An Act providing for a moratorium on evictions and foreclosures during the COVID-19 Emergency” (hereinafter the "Act"). The new law places a moratorium on non-essential evictions of residential and small business tenants and residential mortgage foreclosures. Specifically:

For foreclosures, the Act prohibits mortgage lenders on 1-4 family "residential property" from (i) publishing notices of a foreclosure sale, (ii) exercising a power of sale, (iii) exercising a right of entry, (iv) initiating a judicial or non-judicial foreclosure or (v) filing a complaint to determine the military status of a borrower under the federal Servicemembers Civil Relief Act. It is important to note that "residential property" is defined pursuant to M.G.L. 244 sec. 35B as four or fewer separate households occupied or to be occupied in whole or in part by the borrower and is limited to principal residences (excluding commercial or investment property, residence other than a primary residence, residential property taken in whole or in part as collateral for a commercial loan or a property subject to condemnation or receivership). It does not apply to vacant or abandoned property. Furthermore, lenders are required to grant forbearance of 180 days based on a borrower request to the lender affirming that he or she has experienced negative financial impact due to COVID-19. Loan payments subject to the forbearance will be added to the end of the loan unless agreed otherwise. Lastly, the Act prohibits the imposition of fees, penalties or interest and providing negative information to reporting agencies.

For Evictions, the Act prohibits "non-essential" evictions on both residential and small business premises units. A "non-essential eviction" is defined as an eviction for (i) nonpayment of rent, (ii) resulting from a foreclosure, (iii) for no fault or no cause, or (iv) for cause that does not involve allegations of: (a) criminal activity that may impact the health or safety of other residents, health care workers, emergency personnel, personal 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. The eviction moratorium does not apply to i) commercial tenants that operate outside of Massachusetts, are publicly traded, or have 150 or more full-time equivalent employees; or ii) commercial tenants arising from the expiration of a lease term or a tenant default that occurred prior to March 10, 2020.

The moratorium shall expire 120 days after the effective date of this act or 45 days after the COVID-19 emergency declaration has been lifted, whichever is sooner.

A link to the full copy of the Act: https://malegislature.gov/Laws/SessionLaws/Acts/2020/Chapter65

 

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