We continue to monitor pandemic-related legislation of interest to the BBA, and below we offer another bi-weekly update on a couple of bills in particular:
Moratorium on Foreclosures and Evictions
Since our last update, the Senate and House set up a conference committee to work out differences between their respective versions of legislation to impose a moratorium on foreclosures and “non-essential” evictions during, and a bit beyond, the current state of emergency.
The BBA submitted a letter to the conferees on April 13, asking them to act quickly to resolve the matter in order to relieve pressure on tenants and mortgagors by restricting evictions and foreclosures. The letter recommended adoption of one eviction provision in particular, preventing any judgment from being entered on a move-out agreement reached out of court—which we understand may still be happening in Massachusetts courts, notwithstanding the current Housing Court restrictions on non-essential eviction actions—thus pausing evictions from beginning to end, except in emergencies.
The conference committee reached an agreement on April 15, one that included the specific language we sought, and the Governor signed this into law on April 20, with immediate effect. Among the key provisions (which go beyond what was provided in the federal CARES Act):
- No late fees for non-payment of rent—nor can a landlord notify a credit-reporting agency—if the tenant provides documentation within 30 days of the missed payment that the non-payment of rent was due to a financial impact from COVID-19.
- Landlords may apply last month’s rent (but not a security deposit) to certain qualified expenses, with notice to the tenant—and with no effect on the interest that would otherwise have accrued as owed to the tenant.
- Notices to quit may not be sent, nor may sheriffs execute evictions. Housing Court may not hear “non-essential” evictions (as defined), and deadlines are tolled.
- Tenants are not relieved of their obligation to pay rent. Instead, the Act is intended to provide temporary relief without unduly penalizing landlords from being able to collect unpaid rent. The Act does not provide any guidance as to when and how any unpaid rent must be paid back to a landlord, though this may be covered later in regulations. [Corresponding provisions are in place for mortgagees.]
- Covers residential tenants and small businesses.
- For homeowners, including owner-occupants of most buildings with four or fewer units, creditors and mortgagees may not publish a notice of foreclosure sale, commence a judicial or non-judicial foreclosure process, or exercise their power of entry.
- Creditors must grant a forbearance of mortgage payments for up to 180 days, if requested, during which time fees may not accrue.
- No additional fees, penalties, or interest beyond what the borrower was obligated to pay under the mortgage may accrue during the forbearance period. Payments subject to forbearance will be added to the end of the term unless otherwise agreed to. Borrowers and lenders may enter into alternative payment agreements, but no negative credit information may be provided by a lender to a credit reporting agency relating to the payments subject to the forbearance.
- The law is in effect for 120 days, or for 45 days beyond the end of the current state of emergency, whichever is shorter. But after 120 days, the Governor may extend its effectiveness by 90 days, so long as it ends no later than 45 days beyond the end of the current state of emergency.
Remote Notarization and Witnessing
You may recall that the BBA recently endorsed legislation to temporarily authorize remote notarization and witnessing of documents during this state of emergency, and for three days thereafter. The issue has also received media coverage, and Massachusetts Lawyers Weekly recently editorialized about the need for this legislation.
Remote notarization and witnessing would allow attorneys to conduct signings remotely by videoconference, with protections in place to prevent fraud and abuse. This temporary emergency relief is urgently needed to help clients sign their wills and other essential documents when they (or the notary or attorney) are sick or merely quarantined, and to help keep courts from being overwhelmed by cases after they re-open and the crisis passes.
At last count, forty-two states, including all the rest of New England, have acted to authorize some form of remote notarization during the COVID-19 emergency. And at this time of writing, the Senate and House have each passed identical legislation, which will now be sent to the Governor. If he signs it, the bill will take effect immediately—and we will update you here, with a summary of its provisions.
Government Relations Director
Boston Bar Association