Housing Court

Over 30 Organizations and Individual Landlords Impacted by Eviction Moratorium File Friend of the Court (Amicus Curiae) Briefs In State Court Challenge

Our 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.

The small landlord stories are quite compelling. Here are a few excerpts:

  • 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.”

Amicus Brief Submissions

  1. Charles Sachetta
  2. MassLandlords, Inc.
  3. National Institute of Rental Managers
  4. JMA Housing LLC (Jeff Abrams) and Small Landlords
  5. Small Property Owners Association, Cranberry Holdings LLC
  6. Health Law Associates
  7. Jewish Alliance for Law & Social Action
  8. National Housing Law Project/Metrowest Legal Services
  9. City Life/Vida Urbana, Chelsea Collaborative, Lynn United for Change, Springfield No One Leaves
  10. Massachusetts Coalition for the Homeless
  11. ACLU, Harvard Professors
  12. Citizens Housing and Planning Association (CHAPA), Mass. Public Health Ass’n, Massachusetts Ass’n of Community Dev. Corps.
  13. Cities of Chicago, Boston, Baltimore, Cambridge, LA, Oakland, Seattle, Somerville, et al.
  14. Medical Legal Partnership

To 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.

Amicus Curiae Submissions o… by Richard Vetstein on Scribd

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Facing increasing pressure from state legislators, tenant groups, and the Attorney General, Governor Charlie Baker today extended the statewide moratorium on evictions and foreclosures for another 60 days until Oct. 17. The Moratorium was originally set to expire on August 18.

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 

I will keep you posted on future developments.

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Federal Lawsuit Filed by Marie Baptiste, a Nurse Originally from Haiti Who Is Owed Nearly $19,000 in Back Rent

As 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).

Local Nurse Owed Nearly $19,000 from Tenants

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.

Federal Constitutional Claims

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.  

State Court Lawsuit Remains Pending, Hearing Scheduled for July 30

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 Paypal https://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.

Memo re. Preliminary Injunc… by Richard Vetstein on Scribd

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Justice Paul Wilson, Mass. Superior Court

Superior Court Justice Paul Wilson Sets Preliminary Injunction Hearing for July 30, Asks For Amicus Curiae Briefs Filed by July 24

After 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!

Superior Court Amicus Invitation, Matorin v. Commonwealth by Richard Vetstein on Scribd

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Rental Housing Providers Strongly Opposed to 12+ Month Proposed Eviction Moratorium Extension, Rent Freezes Without Adequate Financial Relief

State 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:

12+ Month Extension of Eviction Moratorium

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.

Just Cause Eviction Provisions

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-19

With 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.

Rental Increase Freeze

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* tenant regardless of 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.

Housing Stability and Recovery Fund

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.

Foreclosure Relief

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 requires anyone who obtains mortgage forbearance, whether owner-occupied or small landlord, “must forever waive and hold harmless tenants from the obligation to pay that month’s rent for 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 the other tenants in that property* as well. Seems rather draconian.

Impact to Rental Property Owners

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.

I will continue to update you with developments on this bill.

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HUD Director Dr. Ben Carson

Federal COVID-19 CARES Act Eviction and Foreclosure Moratorium Extended Another Two Months

HUD Secretary Ben Carson announced yesterday that federal housing agencies have extended the CARES Act eviction and foreclosure moratoriums through 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 Act

For 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%29

Foreclosure Protections Under CARES Act

The 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, servicers may not initiate a foreclosure, move for judgment, or order a sale, or execute a foreclosure-related eviction or foreclosure sale until August 30, 2020.

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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.

Matorin v Chief Justice, SJ… by Richard Vetstein on Scribd

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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

New Required Form: “Notice of Rent Arrearage”

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, see https://www.masshousinginfo.org/regional-agencies.  Additional information about resources for tenants is available at https://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.

My friends over at MassLandlords have created a sample Notice of Missed Payment form if you desire to download it.

Late Fees and Credit Reporting; Notice of Tenant Financial Hardship

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):

Notice and Certification of Financial Hardship From Residential Tenant Related to COVID-19

Form of Notice -COVID-19 Hardship – Small Business Tenant 

Documentation of Financial Hardship – Small Business Tenant 

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.

Landlord Use of Last Month’s Rent Deposit

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:

Notice to Tenant – Use of Advance Rent Payment 

Conclusion

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.

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Unprecedented, Sweeping Prohibition on Residential and Commercial Evictions Enacted Without Corresponding Mortgage and Tax Relief to Property Owners

Updated (5/31/20): Legal Challenge Against Eviction Moratorium Filed In SJC

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.

Sweeping Eviction (Summary Process) Emergency Coronavirus (COVID-19) Relief

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.

Small Business Impacts

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.

Foreclosure Relief

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 Law

Let 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.

The Act is embedded below (House Bill 4647).

Massachusetts Act Providing… by Richard Vetstein on Scribd

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COVID-19 Impacts: Eviction Moratorium Proposals, Tenant Payment Issues, Housing Court Delays, Stay at Home Order, and Move-In Delays

I’ve written two posts here and here about the Coronavirus (COVID-19) Global Pandemic, both focused primarily on impacts to real estate transactions and closings. Along with my colleague and fellow landlord-tenant attorney, Jordana Greenman, Esq., we want to now discuss the impact on rental housing, evictions and landlord-tenant relationships.

The number of reported cases are exploding and events are changing daily, even hourly. I first wrote about the Coronavirus (COVID-19) global pandemic on March 10, about two weeks ago. As of that writing (data as of March 9), there were 729 reported cases in the US, with 27 deaths. As of today March 27, Johns Hopkins is reporting that the United States has surpassed China with over 86,000 confirmed cases and over 1,300 deaths. With the well publicized testing delays, the real number of cases is likely far higher. Unfortunately, Massachusetts has not been spared, with over 2,400 reported cases, including over 140 Boston city hospital workers.

Gov. Baker has ordered the shutdown of all schools and day-cares through May 6, closed down restaurants and bars, and banned gatherings over 25 people. Last week, all Trial Courthouses were shut down for two full days. They have re-opened, but not to the public and with very limited availability for hearing cases (other than true emergencies). On Monday March 23, Gov. Baker issued a “stay at home” advisory, essentially closing down all “non-essential” businesses.

Of course, the big problem for the rental housing industry is the economy has gone into the tank. Experts predict that unemployment will rise to Great Depression levels. The stock market has lost some 30% 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 state-wide moratorium on evictions during the pendency of the COVID-19 State of Emergency. At the federal level, HUD has suspended all evictions for FHA insured single family residences. It’s unclear whether this also applies to HUD Section 8 rental subsidy participants. Lastly, Attorney General Maura Healy 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. Charlie Baker indicated during his last press conference that he was not at a point where he would impose such a moratorium. Thus, as of now, a moratorium on rental payments in Massachusetts is unlikely, but of course, that could change, and such change would disproportionately affect the small landlords.

Housing Court COVID-19 Response

Practically speaking however, there exists a de facto moratorium on evictions because the statewide Housing Court has deferred hearing eviction cases through April 21. Under two new Standing Orders, all Housing Courts are closed to the public through at least until April 6, 2020, and are hearing only emergency matters. All evictions (summary process) are impacted by the order, and are currently on hold until April 21, 2020. 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., 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 still allowed to issue a 14 day notice to quit for non-payment of rent. You are also allowed to file an eviction complaint in the Housing Court. But you will likely not get in front of a judge until sometime in May, and possibly longer. So, it’s a good idea to go ahead and have an attorney send out the notice to quit and get the summary process complaint filed, and then you’ll have to wait in line and see what happens. We do not yet know the order in which cases will be scheduled or if those filed during this time will be given priority.

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 inter-personal contact in the ordinary course of business. Boston Mayor Marty 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 added that open houses should not be used to market properties that are for rent or for sale. Anecdotally, I’m hearing that some (but not all) rental agencies are shutting down operations and many are simply working remotely.

Legal Guidance: showing rental properties live 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, 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 locations. Landlords and tenants should be encouraged to work together in the event of delays.

We have 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 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. The Massachusetts’s official COVID-19 website contains the most up-to-date information. We are also available to consult regarding your current or pending landlord-tenant needs.

Feel free to email Rich at [email protected] or Jordana at [email protected].

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Significant Impacts Hitting: Registry and Court Closures, Closing and Financing Delays, Social Distancing, School Closings, Quarantine Potential

As I was writing this post tonight, Gov. Baker ordered the shutdown of all schools through April 6, closed down restaurants and bars, and is banning gatherings over 25 people. Also announced tonight is the shut down of all Trial Court facilities on March 16 and March 17, which includes the Cambridge and Suffolk (Boston) Registries of Deeds. We are now hitting the tipping point, and going forward there will be substantial impacts on the real estate and legal industry.

I first wrote about the Coronavirus (COVID-19) global pandemic five days ago. Seems like an eternity ago. As of that writing (data as of March 9), there were 729 reported cases in the US, with 27 deaths. As of tonight March 15, cases have over quintupled with Johns Hopkins reporting 3,722 confirmed cases and 61 deaths. With the well publicized testing delays, the real number of cases are likely far higher.

Registry of Deeds Impacts

As mentioned above, Gov. Baker just ordered the closure of all Trial Court facilities for Monday March 16 and Tuesday March 17. Both Cambridge and Suffolk (Boston) Registries are housed in Trial Court facilities so they will be closed for those two days. I spoke to Maria Curtatone, Registrar of Deeds for Cambridge Middlesex South, and she indicated that this may well be the precursor to widespread shutdown of all registries of deeds and courts throughout the state. We will await further announcements on that.

Update (3/17/20) — Suffolk and Cambridge are closed to the public until at least April 6. Currently, they are both still processing electronic recordings for recorded land. All Land Court recordings and plans must be sent in by overnight or regular mail.

We have just received a chart below showing current Registry status:

I remain concerned, however, that all Registries will be forced to shut down and will not offer in person, mail or electronic recordings. If that occurs, we will see a potentially catastrophic impact to real estate in Massachusetts. Title insurance companies have assured its attorney agents that they will offer “gap coverage” in case recordings are delayed. This coverage offers insurance coverage between the time of the physical closing and the time of actual recording of documents at the registry. However, it remains to be seen how this will play out. Will mortgage payoffs still be processed even though deeds will not be recorded? Will sellers allow buyers to get keys and move into homes if deeds aren’t recorded and their sale proceeds are held in escrow? We will need to work through these issues.

I am also concerned if COVID-19 starts hitting closing attorney offices. If a lawyer or staff member is infected, it could result in the quarantine of their entire office, essentially shutting it down for some time.

COVID-19 Contingency Provision

In my previous post, I discussed a new COVID-19 Impact Clause for Offers Purchase and Sale Agreements. (Sample language below). It is imperative that these clauses are used in both Offers and PSA’s. It’s also very important that all parties and their attorneys work together cooperatively throughout this crisis, acknowledging that there will likely be substantial impacts and delays. The goal, as always, is to get to the closing and complete the deal, by any means necessary.

COVID-19 Impact Provision. The Time for Performance may be extended by either Party by written notice for an Excused Delay which materially affects the Party’s ability to close or obtain financing. As used herein an Excused Delay shall mean a delay caused by an Act of God, declared state of emergency or public health emergency, pandemic (specifically including Covid-19), government mandated quarantine, war, acts of terrorism, and/or order of government or civil or military authorities. Notwithstanding anything to the contrary contained in this Agreement, if the Time for Performance is extended, and if BUYER’S mortgage commitment or rate lock would expire prior to the expiration of said extension, then such extension shall continue, at BUYER’S option, only until the date of expiration of BUYER’S mortgage commitment or rate lock.  BUYER may elect, at its sole option, to obtain an extension of its mortgage commitment or rate lock. Notwithstanding the foregoing, said Extension shall not exceed [insert number of days].

Virtual and Remote Closings

Another impact that we are already seeing is that parties to the real estate transaction are afraid of traveling outside their homes right now (or even being visited at home) and being in contact with other people, especially those who are high risk. My colleagues and I are working on an emergency executive order for Gov. Baker to sign which would temporarily authorize remote or virtual closings using such technology as Zoom and Docusign.

For more information on this please read my new post, Massachusetts Remote Notarization Bill Filed in Legislature

Court Closings

Update (3/17/20): The Supreme Judicial Court today ordered that, because of the public health emergency arising from the COVID-19 pandemic, beginning tomorrow (March 18, 2020) and until at least April 6, 2020, the only matters that will be heard in-person in Massachusetts state courthouses are emergency matters that cannot be held by videoconference or telephone. Each of the seven Trial Court departments, in new standing orders to be issued today, will define emergency matters for their departments.  As a result of the SJC order, courthouses will be closed to the public except to conduct emergency hearings that cannot be resolved through a videoconference or telephonic hearing.  Clerk’s offices shall remain open to the public to accept pleadings and other documents in emergency matters only.  All trials in both criminal and civil cases scheduled to commence in Massachusetts state courts between today and April 17, 2020, are continued to a date no earlier than April 21, 2020, unless the trial is a civil case where the parties and the court agree that the case can be decided without the need for in-person appearance in court. Where a jury trial has commenced, the trial will end based on the manifest necessity arising from the pandemic and a new trial may commence after the public health emergency ends. Courts, to the best of their ability, will attempt to address matters that can be resolved or advanced without in-person proceedings through communication by telephone, videoconferencing, email, or other comparable means.

A link to the SJC Order OE-144 is here.

In addition to the closings on March 16-17, the Massachusetts Court System announced over the weekend major “triage” changes reducing the number of persons entering state courthouses. These rules are effective Wednesday March 18, 2020. A link to all of the new changes can be found here — Court System Response to COVID-19. A summary of each court and respective changes are as follows:

Superior Court — All jury trials postponed until April 22. Motions handled by individual judges with preference for telephonic hearing and postponement where necessary to limit number of people entering courtroom. Emergency matters may proceed normally. The new Standing Order 2-20 can be found here.

Housing Court — All cases including evictions (except emergencies) postponed until after April 22. Matters may be heard earlier upon a showing of good cause. New Housing Court Standing Order is here.

Probate and Family Court — Trials postponed until May 1. Motions and pre-trials heard telephonically or postponed until after May 1. Modification complaints won’t be heard until after May 1. New Probate and Family Court Standing Order 1-20 is here.

District Court — No jury trials until after April 21. All criminal appearances rescheduled for 60 days, and no earlier than May 4. Arraignments and Bench trials may proceed. The new District Court Standing Order is here.

Land Court — All trials postponed until after April 21. All other motions and proceedings shall be held telephonically at judge’s discretion. Registration of title documents should not be done in person. Mail or email is now preferred. (Not sure how that will work). New Land Court Standing Order 2-20 is here.

Appeals Court — Oral argument for March will be telephonic.

Supreme Judicial Court — Please see the Court’s website.

As you can glean from the changes, virtually all trials are being pushed out through the end of April. Motion hearings are court specific with telephonic hearings being substituted for in-person hearings. Of course, if the courts are all shut down, all bets are off. With no staff, the courts will not even be able to handle new filings. The system would just stop in its tracks, except for the most emergency of matters.

Lender/Financing Delays

This week we will see if there are any major disruptions to lenders’ ability to provide financing. I am seeing some smaller mortgage companies moving to remote employee staffing. I’m also hearing about appraisal delays. If there are government employee impacts such as at the IRS for processing tax transcripts, there could be delays with underwriting. I think it’s inevitable that we will be seeing lender delays moving forward.

Municipal Closings

I am also hearing of closings of municipal departments, which may affect the availability of final water/sewer readings and possibly smoke detector certificates. Title 5 inspections could also be impacted.

25 Person Social Gathering Restriction

New restrictions on crowd sizes that Gov. Charlie Baker issued on Sunday, March 15, could upend open houses. The restrictions banned gatherings of 25 or more people. Brokers seemed to anticipate a possible drop-off in attendance, even before Baker’s restrictions and despite strong numbers the past couple of weeks. “Next week may be a different story,” Jason Gell, a Keller Williams broker and president of the Greater Boston Association of Realtors, said on March 12. “Unfortunately, any decline in open houses or listings is likely to make the conditions for buyers even more difficult.”

Social Distancing, School Closures and Possible Lockdown

The impacts of COVID-19 are manifesting not necessarily in the actual infection and sickness of patients (which I’m not discounting at all) but all the measures we are taking to “flatten the curve.” I want to urge all my readers that COVID-19 could wind up being the worst global pandemic since the Spanish Flu and should be taken as seriously as life and death. If you can work from home, do that and don’t go into the office. If you can arrange for remote employee access, please do that. Take advantage of technologies like Zoom, Docusign and Dotloop. Please keep your kids at home. No playdates, family gatherings or hang-outs. They say we are only 2 weeks behind Italy and you see what’s going on there. Stay safe! More updates to follow as I get them.

-Rich

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Rent Escrow Orders Upheld by Supreme Judicial Court

by Rich Vetstein on September 16, 2019

Huge Victory for Landlords and Property Managers

Today, in Davis v. Comerford, Justice Scott Kafker of the Massachusetts Supreme Judicial Court issued the first appellate decision confirming that Housing Court and District Court judges have the legal authority to issue rent escrow orders in favor of landlords while eviction cases are pending. The hard working folks at MassLandlords, who filed a friend of the court brief in the case, and I have been working very hard to get this much needed ruling and guidance from our appellate courts on rent escrow orders. It finally came today.

For those who don’t know, a rent escrow order is an order issue by a Housing or District Court judge in an eviction case requiring the tenant to continue to pay rent (also called use and occupancy) during the pendency of the case which can drag on for many months. It seems like common sense, and several housing court judges do issue them, but up until now, there has never been a formal ruling by a Massachusetts appellate court that rent escrow orders were legal. The district courts, however, in my experience, have traditionally been unwilling to grant these orders.

Davis v. Comerford: Seminal Ruling on Rent Escrow Orders

In the Davis v. Comerford, the Southeastern Housing Court in Brockton issued a rent escrow order in a case where the tenant also claimed various housing code violations and security deposit violations. Arguing that the judge did not properly consider tenant’s counterclaims, he appealed the rent escrow order.

The SJC took the unusual step of transferring the case to its full court panel, using it as an opportunity to consider the legality of rent escrow orders in general, and the various factors that lower court judges should consider in making these orders. First, the Court confirmed what we landlord attorneys have been arguing for years — that rent escrow orders are fully within the statutory umbra and equitable powers of the Housing and District Courts, and should be issued on a case-by-case basis. Second, the Appeals Court held that a tenant’s counterclaims for code violations, property conditions and other defenses are relevant in the calculation of any rent escrow order. Third and lastly, the Court set forth a framework for lower courts to use in considering rent escrow orders, which I will outline below.

Factors for Judges to Consider in Issuing Rent Escrow Orders

  • A landlord must file a written motion for rent escrow. A hearing must be held on the motion, and the judge should issue written findings supporting his/her ruling.
  • A judge should consider the time delay expected before trial or final resolution, noting that a request for a jury trial will typically delay the case substantially.
  • A judge should consider the amount of rent due, whether the landlord has received full or partial payments, and (critically) the amount of the landlord’s mortgage and property expenses and whether there is a threat of foreclosure to the landlord.
  • The tenant’s counterclaims and defenses (and the merits of each) should be considered, especially any code violation/property condition claims which would result in a reduced fair rental amount.
  • A judge should consider whether the tenant had to pay out of pocket for any repairs under the repair and deduct law.
  • The tenant’s own financial situation is also relevant, as well as whether they have a lawyer or are proceeding on their own (pro se).
  • Rent escrow payments may be placed into court, into the tenant’s attorneys account, into a landlord attorney’s account, or if warranted, paid directly to the landlord

This is a great ruling by the SJC, and will be very helpful to both the landlord and tenant bar as cases move forward in our Housing and District Courts. I was also able to discuss this case with Attorney Arthur Doubleday, who represented the tenant. He said: “I am happy with the decision because it gives clarity and a road map through which Judges can now deny or allow use and occupancy orders.  Whereas before, use and occupancy orders were Judge specific, hopefully soon we will begin to see uniformity and in how these orders are denied or allowed. The requirement for an evidentiary hearing and a written finding after such hearing will let both tenants and landlords give their reasons as to why a use and occupancy order should or should not be made. That said, I am fearful that landlords will prevail in their request for use and occupancy orders even when there are poor living conditions for the tenants who may not know how to advocate for themselves in court.” I do agree with much of what Attorney Doubleday says, however, I’m confident that our Housing Court judges are up to the task in considering all the various factors which go into a rent escrow request.

If you have any questions about this court ruling or rent escrow orders in general, please reach out to me at [email protected].

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Accurate Court Data Shows The “Eviction Crisis” Is A Fallacy

You may have noticed the featured article in Sunday’s Boston Globe Magazine on the supposed “eviction crisis” in Massachusetts. Titled “As rents soar in Boston, low-income tenants try to stave off eviction,” investigative reporter Jenifer McKim cited inaccurate court statistics to create the false narrative that thousands of innocent tenants are being thrown out on the street by greedy landlords. Using this fallacy, McKim then advocates for a new legislative proposal giving all tenants (but not landlords) a “Right to Counsel” i.e, free legal representation courtesy of the Massachusetts taxpayer. I’m not a fan of the term “fake news,” but it is really justified here. Where do I begin?

McKim first claims that “eviction initiations in Massachusetts spiked in 2008, following the Great Recession. Each year since then, landlords have sued about 40,000 heads of household across the state seeking to evict them, according to data gathered by the New England Center for Investigative Reporting.”

Well, she’s totally wrong and does not know how to read court statistics. Take Fiscal Year 2018 for example. Housing Court publicly available data shows 29,684 summary process cases filed. Summary process is how Massachusetts defines an eviction case. There were about 10,000 other types of cases filed in Housing Court (code violations, search warrants, small claims and civil money actions) but those are not evictions. So she’s already off by 10,000 cases or 25% of her cited data. To the extent she’s using district court filings, one would have to determine whether those were residential or commercial. Commercial evictions are always filed in the district court. Making that important distinction would entail physically reviewing each case file which she didn’t do. So you can’t reasonably rely on that data either.

Second, one would also have to account for Housing Court’s recent expansion to statewide jurisdiction which has increased its filings while district court filings are down. Actually as you can see from the PDF linked above, summary process filings in Housing Court were trending down and level from ’14 to ’15, to ’16 and to ’17, but then slightly up for ’18 (by only 6% or so) because of the statewide jurisdiction enactment. Eviction filings in District Court were down about 10% in 2018. So McKim is being intellectually dishonest if she’s attributing the slight bump in Housing Court filings in ’18 as some sort of trend of increased evictions. The overall trend has been down and level, as you can see below in the chart I quickly created. Sure doesn’t look like a crisis to me…

Then McKim makes the most egregious inaccurate statement: “The state doesn’t track how many of these have resulted in actual evictions, but the Eviction Lab at Princeton University found that in 2016, there were roughly 15,708 forced removals in Massachusetts — an average of nearly 43 a day. That’s about double the number of evictions in 2005, before the housing bubble burst…”

This is another totally bogus statistic. She’s right, the state does not track the number forced removals (accurately called a levy on an execution for possession). Researching that would entail physically reviewing every single eviction case in the state — 6 separate Housing Court divisions and in our roughly 80 district courts. Did Princeton University send a small army of interns checking every case file for 2016? That’s the only way they could accurately conclude that there were 15,708 “forced removals,” however they are defining that. So I was curious and did some research. After some digging I found the Princeton Eviction Lab’s Report on Methodology, and no surprise, their researchers relied on online available statistics, and as McKim acknowledged, you cannot see if there was a forced move out from the basic online data. I can tell you that in my 20 years of experience handling thousands of evictions, forced move outs are around 1-2% of all cases. It is the rare exception indeed because it costs landlords no less than $3,000 for movers and storage costs. The vast majority of cases are either default no-shows or negotiated move out agreements.

So the truth is that there is nowhere near 43 forced removals per day in Massachusetts, as McKim claims. Not. Even. Close.

Also, the number of evictions has not “doubled” since 2005, as McKim states. In 2005, there were approximately 30,000 total eviction cases filed (and this includes commercial cases which cannot be carved out without reviewing the case files). In 2018, there were about 40,000 total cases filed (again, this includes commercial cases). So McKim is off by 20,000 cases. And of course, the vast majority of all eviction cases are resolved amicably between the parties, without the need for a forced move out. I find it incredulous that highly regarded Boston Globe investigative reporters would be so sloppy with these critical statistics which are publicly available online.

Lastly, Ms. McKim interviewed me for a solid hour on this story, but only used a small snippet of my extensive commentary on the issue, pertaining to how I’ve been physically threatened by tenants in Housing Court. Yes unfortunately this is true. But I’ve been practicing in the Housing Courts for 20 years now and I gave her a small treatise of information which she ignored for her article. Ms. McKim also extensively interviewed Doug Quattroci, the Executive Director of the largest trade association for landlords, MassLandlords.net. Mr. Quattroci has led our lobbying efforts to level the playing field for landlords and offered extensive data on the topics Ms. McKim was writing about. None of Mr. Quatrocci’s comments made it into the article. Contrast that with paragraph upon paragraph dedicated to the tenant side of the story. I e-mailed Ms. McKim about all of these inaccuracies and her response was “feel free to write a letter to the editor.” I gave her an “LOL” on that one!

Ms. McKim’s article was certainly not fair and balanced, in my humble opinion. I guess we can’t expect that from the Boston Globe these days, can we? How sad.

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Rent Escrow, Security Deposit Reform, and Elderly Housing Legislation Filed By Trade Group

Historically, Massachusetts rental property owners have struggled to overcome the coordinated and organized political lobbying of tenant rights and rent control groups at the State House. I remember just a few years ago I testified on Beacon Hill for the rent escrow bill against a small army of tenant advocates. That is now changing in a big way.

Previously splintered across many small groups, property owners have consolidated their lobbying efforts through a state-wide organization, MassLandlords.net. Created by Executive Director Doug Quattrochi, MassLandlords.net has hired a full time lobbyist, and has been instrumental in filing a record number of legal reform bills during the current legislative session. This is really important given that tenant rights groups have been very active recently in pushing just cause eviction, rent control and other socialist proposals.

Here is a summary of some of the bills backed by MassLandlords filed in the current legislative session:

H.D. 1191 – Rent Escrow (sponsored by Rep. Boldyga) — Tenants must pay rent into court if they are invoking rent withholding due to code violations or necessary repairs

H.D. 1194 – Elderly Tenants (sponsored by Rep. Boldyga) — Creating rental voucher program for elderly tenants (age 75+), protections during evictions

H.D. 1205 – Equal Counsel (sponsored by Rep. Boldyga) — Allowing rental companies to represent themselves in court without an attorney

H.D. 1192 – Late Fees (sponsored by Rep. Boldyga) — Changing late fees on unpaid rent to 10 days overdue from 30 days

H.D. 1202 — Tenant Sale Disclosure (sponsored by Rep. Boldyga) — Requiring property owners to notify tenants upon advertising of property for sale

H.D. 1457 — Security and LMR Deposit Reform (sponsored by Rep. Barrows) — Eliminating triple damage penalty and streamlining payment of deposit interest

H.D. 1474 — Rent Escrow (sponsored by Rep. Barrows) — Requiring tenants to pay monthly rent into escrow during pendency of any eviction action unless it would cause undue hardship

S.D. 231 – Rent Escrow (sponsored by Sen. Tarr) — Requiring rent escrow where tenant is withholding rent due to code violations

Whether these bills will advance through committee hearings to actual vote and passage is unknown. But this is a great start for the up and coming MassLandlords group, and I’ll be monitoring the progress of the bills in the coming months.

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Bill Sent to Study Committee, Effectively Killing It

After intense lobbying on both sides by property owner groups and tenant rights activities, lawmakers sent the Jim Brooks Community Stabilization Act to study effectively killing it for this legislative session. The Act, a Home Rule Petition requiring full State House approval, would require that a landlord or foreclosing owner provide a city-approved “notice of basic rights” and a list of tenant assistance organizations simultaneously with the issuance of a notice to quit/termination or notice of lease renewal/expiration. It also provided that tenants of foreclosed properties could only be evicted for certain “just cause” reasons. The Boston City Council had originally approved the measure in November 2017, but state lawmakers had to approve it as well. Property owner groups were vehemently opposed to the measure, asserting that it was actually a return to Rent Control.

The reactions by proponents and opponents of the bill were naturally mixed on social media. Boston City Councilor Ayanna Pressley, a supporter of the measure, said that the bill “was not supported by the Judiciary Committee…but where it stands now is not promising.” The bill was vehemently opposed by property owner groups, such as Masslandlords.com and the Small Property Owners Association, which mounted a strong coordinated campaign to lobby legislators.

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New Judges to Serve Expanded Statewide Jurisdiction

In the 2018 Fiscal Year budget, the jurisdiction of the Housing Court expanded to full state-wide coverage, and with it, the Legislature created five new judgeships. Earlier this week, Governor Charlie Baker nominated five attorneys as new Associate Justices to the Housing Court:

Donna T. Salvidio of Worcester nominated as a Circuit Justice
Neil K. Sherring of Westwood nominated as a Circuit Justice
Joseph L. Michaud of Dartmouth nominated to the Metro South Division
Irene Bagdoian of Westborough nominated to the Metro South Division
Gustavo A. del Puerto of Salem nominated to the Northeastern Division

Each judge must be approved by the Governor’s Council before stepping onto the bench. While I do not know all the nominees personally, this group appears to have very solid experience and background. I look forward to seeing them before the Governor’s Council and hopefully on the bench.

Donna Salvidio currently leads the Condominium Law Practice Group within the Real Estate department at Fletcher Tilton PC in Worcester. Click here for her Firm Biography. Her work covers a full spectrum of real estate related matters, with particular emphasis on residential housing law, condominium law, property management, commercial leasing and transactional work. She has over 27 years of experience in residential housing law including landlord-tenant law and the development of affordable housing. Attorney Salvidio served as Board President of Worcester Community Housing Resources, Inc., a non-profit which creates and preserves affordable housing opportunities for low to moderate income households, and is currently a member of its Property Development and Management Committee. She also served on the Housing Court Committee of the Worcester County Bar Association and was a Commissioner of the Worcester Civic Center Commission for 10 years. Attorney Salvidio received her Bachelor’s Degree cum laude in Psychology from the University of Vermont and her Juris Doctor cum laude from Suffolk University Law School where she served as an editor of the Suffolk University Law Review. She currently resides in Worcester, Massachusetts.

Neil Sherring has 25 years of experience practicing law. Since 2001, he has been a partner in his own law firm Dakoyannis & Sherring, LLC, where he concentrates on landlord tenant and real estate related cases, personal injury claims, insurance disputes, and employment discrimination claims. Previously, he was a trial attorney at Mintz, Levin. Attorney Sherring also has a wealth of experience representing the Commonwealth as an Assistant Attorney General, Assistant District Attorney for  the Northwestern District of Massachusetts, Massachusetts Superior Court Law Clerk and Hearing Officer for the Division of Insurance. He has served as the Deputy Commissioner of the State Athletic Commission and has been a frequent lecturer at Suffolk University and Curry College. Within his community, he is a current Board Member of the Westwood Community Chest, where he has also served as President and Vice President. He earned his Bachelor’s Degree from Curry College and his Juris Doctorate from Suffolk University Law School. He resides in Westwood with his family.

Joseph Michaud has been practicing law for 25 years. He is currently an attorney partner at his own practice, the Law Offices of Joseph L. Michaud, where he specializes in residential and commercial real estate transactions and landlord-tenant matters. Attorney Michaud is also a decorated member of the United States Army, having served on active duty intermittently for the last 30 years as a Lieutenant Colonel in the Judge Advocates General Corps. He first enlisted as a Tanker in 1986, and went on to serve in both Desert Storm and Operation Noble Eagle. Attorney Michaud has earned 3 Meritorious Service Medals, 6 Army Commendations, a Joint Service Achievement Medal, a National Defense Medal, a Global War on Terrorism Medal, and an Outstanding Volunteer Medal. Attorney Michaud continues to serve his local community as Chair of the South Coast Chamber of Commerce in New Bedford and as a Board Member of the Veterans’ Transition House. He graduated with his Bachelor’s Degree from University of Massachusetts in Amherst and received a Master’s of Arts from Sam Houston State University. He earned his Juris Doctorate from the Franklin Pierce Law Center at the University of New Hampshire. Attorney Michaud is a lifelong resident of Dartmouth, MA. In his spare time, you can find him playing bass guitar in a local band.

Irene Bagdoian has practiced law in the Commonwealth for nearly thirty years. During the last decade, she has been a solo legal practitioner at her own law firm in Brockton, representing individuals and businesses in civil litigation matters related to housing, foreclosure, real estate, and consumer protection. She was one of the founders of the Brockton Housing Court Lawyer for the Day Program, which provides advice to unrepresented landlords and tenants, and has organized educational programming for volunteer lawyer programs in collaboration with the Southeastern Housing Court for the past nine years. Attorney Bagdoian is a member of the Steering Committee for the Tenancy Preservation Program and a Board Member of the Justice Center of Southeast MA. She graduated with her Bachelor’s Degree from Wheaton College in Norton, MA and received her Juris Doctorate from Boston University School of Law. She resides in Westborough with her husband, Paul Sangree.

Gustavo del Puerto has nearly 25 years practicing law in Massachusetts. He currently serves as Assistant Clerk Magistrate in the Northeast Housing Court. Prior to that, he practiced as a Senior Associate at Sassoon & Cymrot in Boston where he focused on commercial litigation, including the resolution of contract, business, and construction disputes, tort matters and the protection of creditors’ rights. Attorney del Puerto served as Counsel for the Chelsea Commission on Hispanic Affairs, Inc., where he also provided pro-bono work for immigration law. Attorney del Puerto earned his Bachelor of Arts from the College of the Holy Cross, and his Juris Doctorate from Northeastern University’s School of Law. He currently resides in Salem, MA.

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Landlord Attorneys Active In Court and In Legislature On Rent Escrow Issue

Massachusetts Lawyers Weekly Reporter Patrick Murphy just did a great write up of the current state of Rent Escrow in the Legislature and at the Housing Court. As reported by Mr. Murphy, attorneys representing residential landlords (like myself) are hopeful that this is the year the Legislature closes what is perceived to be a loophole that allows tenants to remain in possession of the premises rent-free during eviction proceedings. Bills moving through both the House and Senate would require judges to order tenants to pay rent into escrow during the pendency of a case upon motion by property owners. In the meantime, Housing Court judges including Marylou Muirhead (pictured below) are becoming more receptive to approving motions for rent escrow filed by landlord attorneys.

Free rent trickery?

As I’ve written on this Blog, the Massachusetts eviction system contains a loophole that allows tenants to avoid paying rent while a dispute is pending. Specifically, they point to G.L.c. 239, §8A, which authorizes tenants to raise defenses or counterclaims — such as those alleging the landlord’s breach of the terms of the lease or housing code violations — justifying the withholding of rent. In terms of the escrow of rent, the statute provides that the court, after hearing the case, “may” require the tenant to pay to the clerk of the court “the fair value of the use and occupation of the premises,” less any amount awarded on the tenant’s claims.

We call this the “Free Rent Trick” — where the tenant will stop paying rent and file a complaint with the local board of health over minor code violations, such as a broken window screen. Rent accrues as the landlord gets around to hiring a lawyer to file a 14-day notice to quit the premises and commence summary process. Three to five months of rent may have accrued before a case is typically heard, and tenants can extend the process another three to six months, depending on the court, by requesting a jury trial.

Rare win for landlords?

As Mr. Murphy highlighted in his article, I recently succeeded in obtaining a rare rent escrow order in Worcester Housing Court in a case in which months of back rent had accrued before I ever became involved in the matter. In Eda Ema, LLC v. Kirby, Judge MaryLou Muirhead (pictured right) ordered the tenant to begin making escrow payments of $975 a month, reflecting the terms of her lease. The tenant owed $12,675 in past due rent at the time the case was filed in January.

The case points to the plight of many landlords even if they are ultimately successful in obtaining a judgment against the tenant for back rent. Such judgments are often uncollectible. However, the escrow order I obtained in Eda Ema is a rarity in my experience, with several Housing Court judges and most District Court judges still resistant to ordering such relief.

Pending Rent Escrow Bills

Putting an end to the so-called “free rent trick” in Massachusetts is long overdue, according to my colleague Brighton landlord attorney Emil Ward who has drafted Senate Bill 778, calling for mandatory rent escrow.

Another bill, House rent escrow bill, H. 980, was filed in January 2017 by Middlesex Democrat Rep. Chris Walsh. The bill would amend G.L.c. 239, §8A, to provide that “the court after hearing shall require” the tenant to pay into escrow “the amounts due for use and occupancy, calculated according to the fair market value of the premises.”

Walsh said his bill is intended to help small landlords, many who have complained to him in the past about being victimized by the free rent ploy. He said he has heard complaints of tenants who knew how to “work the system,” invoking housing regulations to “essentially stop paying rent.”

While we haven’t been successful in getting a rent escrow bill passed, I’m hopeful that Legislators are finally listening to landlords’ legitimate concerns that the eviction playing deck is stacked against them.

As always, I will keep tabs on these developments.

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No Triple Damages Although Landlord Failed To Provided Sworn Statement of Itemized Damage at Move Out

When a tenant leaves damage to a rental unit at move out, the Massachusetts Security Deposit Law allows a landlord to deduct the cost of repairs from the security deposit, provided the landlord issues a sworn statement of itemized damage along with repair estimates within 30 days of the move out. I’ve seen many landlords attempt to comply with the law only to be on the receiving end of a Chapter 93A letter from a tenant attorney demanding triple damages for messing up this requirement. This is one of many reasons why I advise my landlord clients to decline taking a security deposit from tenants.

Last week, the Supreme Judicial Court had the opportunity to clarify this particular provision of the law in the class action case of Phillips v. Equity Residential Management LLC. In this case, Equity Residential, attempted to deduct $968.08 in carpet and other cleaning charges from a tenant’s security deposit. However, Equity failed to provide the required itemized statement sworn under the pains and penalties of perjury. The tenant filed a class action seeking return of the deposit, triple damages, and attorneys’ fees under the statute.

I won’t bore you with all the technicalities of the Court’s ruling, but the SJC came down on the landlord’s side on this case, holding that while the landlord mistakenly failed to provide the sworn statement the law was clear that this is not one of the situations where triple damages is the proper remedy. (Equity did have to return the tenant’s security deposit in full). Yes, I know a rare victory for property owners in Massachusetts…

Again, while this case came out on the landlord’s side, it demonstrates the risks involved in failing to comply strictly with the Massachusetts Security Deposit Law. As a reminder, if a landlord is claiming that a tenant caused damage at the end of the tenancy and wants to deduct it from the deposit, it must provide within thirty days “an itemized list of damages, sworn to by the lessor or his agent under pains and penalties of perjury, itemizing in precise detail the nature of the damage and of the repairs necessary to correct such damage, and written evidence, such as estimates, bills, invoices or receipts, indicating the actual or estimated cost thereof.” The law also requires that landlord provide a “statement of condition” at the beginning of the tenancy, so that damage can be verified. Only then will a landlord be allowed to deduct repair costs from a security deposit.

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Richard D. Vetstein, Esq. is an experienced Massachusetts residential landlord – tenant attorney. You can contact him at [email protected].

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DPH Proposes Changes To State Sanitary Code

by Rich Vetstein on October 26, 2017

Changes Catching Landlords By Surprise

Without much publicity or property owner input, the Massachusetts Department of Public Health has rolled out proposed revisions to the State Sanitary Code which provides minimum standards of habitability for all rental housing units across the state. There are some significant changes which will definitely impact both small and large property owners/landlords.

Integrated Pest Management Plan
The proposed rules requires that any rental property with 4 or more units implement an Integrated Pest Management Plan with pest inspections conducted at least every 4 months. Owners are required to maintain a record documenting the following activities conducted within the residence including inspection results, complaints filed by occupants, the date, location, product name, and name of any person applying pesticides, and modifications to the original IPM plan, all of which should be available upon request by the board of health.

Mold, Mold, Mold
DPH is on a mission to eradicate mold in rental housing. The new rules place landlords responsible to remove all possible signs of mold in apartments as well as any areas of “chronic dampness.” As every landlords knows, tenants are often the ones who cause mold growth by not using proper ventilation or having poor hygiene. Boards of health are now authorized to conduct mold-specific inspections and conduct air quality tests.

Bathroom Exhaust Fans

The new rules require exhaust fans in every bathroom whether or not there is a window. Previously, landlords did not have to install a fan if there was a bathroom window.

Central Heating Systems

Property owners are required to provide a “central heating system” for all units. Fireplaces, woodstoves, pellet stoves, portable electric space heaters and unvented propane or natural gas-fired space heaters will not meet the requirements of this new standard. This will impact rental housing in the outer counties. Also prohibited from use in any residence are (1) any portable space heater, parlor heater, cabinet heater, or room heater that has a barometric fed fuel control and a fuel supply tank located less than 42 inches from the center of the burner, (2) heating appliances adapted for burning propane, kerosene, range oil or number one fuel oil, and (3) Portable wick type space heaters.

Code Violations/Tenant Remedies

Of course, any violations of the State Sanitary Code entitles tenants to withhold rent under state law. There can also be Chapter 93A/Consumer Protection liability which carries the prospect of triple damages and payment of tenant attorneys’ fees. Code violations can severely de-rail any eviction action so landlords must ensure that any code violations are quickly and properly addressed. Without the passage of a rent escrow law, landlords remain at risk of tenant abuses of the rent withholding statute.

The proposed revisions to the State Sanitary Code, 105 CMR 410 can be downloaded here.

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Updated 11/10/17

Proposal Heads To State House Next

Once thought to be dead, the Boston City Council yesterday approved the first ever “just cause” eviction act in Massachusetts, known as the Jim Brooks Community Stabilization Act. The Act, which opponents dubbed a return to rent control, requires landlords owning 6 or more units to file a notice to quit/termination with the newly formed Office of Housing Stability, prior to starting an eviction. However, after intense lobbying by property owner groups, the council passed a watered-down just cause eviction provision which only applies to foreclosing owners/lenders. The vote was 10-3 in favor of the Act, with City Councilors Bill Linehan, Sal LaMattina, and Timothy McCarthy voted no.

City Rights Notice

The Act requires that a landlord or foreclosing owner provide a city-approved “notice of basic rights” and a list of tenant assistance organizations simultaneously with the issuance of a notice to quit/termination or notice of lease renewal/expiration. In the case of a lease non-renewal or expiration, landlords and foreclosing owners must provide another “City Termination Notice” to the tenant and the City, at least 30 days prior to starting a summary process (eviction) action. All of these notices must be filed with the summary process case, and the failure to provide these notices will result in eviction cases being dismissed. As with any notice to quit, the best practice is to have such notices served by licensed constable or deputy sheriff.

“Just Cause” Grounds for Eviction

The original version of provided that landlords could only evict tenants for nine (9) specified just cause reasons. However, the final version passed only applies to foreclosing owners/lenders, not to ordinary landlords. Some of the just cause reasons include

  • Nuisance/damage to unit
  • Illegal activity such as drug use
  • Refusal to pay reasonable rent
  • Failure to provide access.
  • Owner requires premises for housing for family member

What’s Next?

It’s not all bad news for property owners, however. The bill faces more hurdles before becoming law. It is a Home Rule Petition, so it must be approved by the entire State Legislature before it becomes law. That may prove to be quite difficult for proponents. The bill may also face court challenges because, as opponents argue, it’s an unlawful return to rent control, which was outlawed in the 1980’s, and fundamentally alters existing private contracts and the very nature of a tenancy at will relationship.

The Act is also somewhat of a compromise between property owners and tenant groups. Tenants wanted to require landlords to submit to mediation for rent hikes of more than 5%, but were not able to get support for it among city council members. Tenant groups also pushed for prohibitions on evicting elderly or disabled tenants and long term renters with children in the school system. The Mayor rejected those ideas as well.

Additionally, small landlords owning 6 or fewer units are exempt from coverage as are owner-occupants of multi-family dwellings and Section 8/federally subsidized housing providers.

The final text of the Act can be read here.

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