More than a month after Governor Charlie Baker declared a state of emergency arising from the novel coronavirus in the Commonwealth of Massachusetts on March 10, 2020, the “COVID-19 Emergency Declaration,” the state Legislature enacted and Governor signed emergency legislation providing moratoriums on certain evictions and foreclosures of primarily residential properties and some commercial properties. The Eviction and Mortgage Foreclosure Moratorium Act (the “EMFM Act”) is an emergency law that takes effect immediately, and provides restrictions on covered eviction and foreclosure activities generally for a period of 120 days, or until 45 days after the lifting of the COVID-19 Emergency Declaration, whichever is sooner. However, the term of the EMFM Act is subject to possible extension by Governor Baker in increments of 90 days or less, with the outside term of the EMFM Act set to expire 45 days after the lifting of the COVID-19 Emergency Declaration. The substantive provisions of the EMFM Act are summarized in this legal update.
Residential Property and Small Business Premises Unit Eviction Moratorium
The EMFM Act bars landlords and property owners, courts, and sheriffs and constables from proceeding with certain non-essential eviction-related activities during the period of the EMFM Act, primarily with regard to residential properties and commercial premises units occupied by small businesses in Massachusetts. The term “non-essential evictions” is defined to include evictions (i) for non-payment of rent; (ii) resulting from a foreclosure; (iii) for no fault or cause; or (iv) for cause not involving allegations of (a) criminal activity that may impact the health or safety of other residents, health care workers, emergency personnel, persons lawfully on the property, or the general public; or (b) lease violations impacting the same health or safety concerns. Small business premises units are commercial premises occupied by for-profit and non-profit businesses, but do not include tenants or tenants in control with others that (i) operate multi-state; (ii) operate multi-national; (iii) are publicly-traded; or (iv) have not less than 150 employees. Non-essential evictions also do not include evictions from small business premises units if the expiration of the lease or tenancy, or the default giving rise to the eviction, occurred before the COVID-19 Emergency Declaration on March 10, 2020.
For Residential Properties, during the term of the EMFM Act, landlords and owners are barred from (i) terminating a tenancy; and (ii) sending any notice to quit or other demand to a tenant to vacate the property, for the purpose of pursuing a non-essential eviction. For Residential Properties and Small Business Premises Units, courts that have jurisdiction over summary process evictions are barred from taking the following actions with respect to non-essential evictions: (i) accepting for filing writs, summonses and complaints; (ii) entering defaults or default judgments; (iii) issuing executions for possession; (iv) denying any defendant’s request for a stay of eviction or a third-party’s request for a continuance; or (v) scheduling any court event, including summary process trials. Also for Residential Properties and Small Business Premises Units, sheriffs and constables are barred from enforcing or levying upon executions for possession of properties during the term of the EMFM Act for non-essential evictions. The EMFM Act further provides that all deadlines and time periods in non-essential summary process eviction cases are tolled, including but not limited to answer, appeal, and levy of execution deadlines.
In addition to barring non-essential eviction-related actions, the EMFM Act imposes other restrictions on landlords and owners, along with clarification as to rental payment obligations. Specifically, for Residential Properties and Small Business Premises Units, the EMFM Act bars landlords from charging late fees or furnishing rental payment data to credit reporting agencies if, not later than 30 days after the missed rental payment, the tenant provides the landlord with notice and documentation that the missed payment was due to a COVID-19 Emergency Declaration financial impact. The Massachusetts Executive Office of Housing & Economic Development (“EOHED”) is charged with developing model notice forms for this purpose, as well as emergency regulations to the extent deemed necessary. The EMFM Act also clarifies that it does not relieve tenants from their obligation to pay rent or restrict landlords’ ability to collect rent, but obviously provides severe restrictions on landlords’ and owners’ remedies due to non-payment of rent during the COVID-19 Emergency Declaration.
Prepaid Rental Flexibility Available to Lessors
The EMFM Act provides a small measure of flexibility to lessors (landlords and owners) of Residential Properties allowing them to immediately use tenants’ prepaid last month rental payments for certain property-related expenses, such as mortgage payments, utilities, and property repairs and maintenance. However, lessors cannot use such prepaid last month rental payments for non-payment of rental late fees caused by the COVID-19 Emergency Declaration, and lessors are required to notify impacted tenants in writing that it (i) used the last month’s prepaid rental payment before the last month of tenancy; (ii) remains obligated to apply said rental payment in advance to its intended last month of tenancy; and (iii) the tenant is entitled to the same amount of interest on the prepaid rental payment, per M.G.L. c. 186, § 15B, as if it accrued until the last month of the tenancy or lease without having been used. Further, the EMFM Act expressly provides that nothing relieves lessors of their obligation to comply with the requirements of M.G.L. c. 186, § 15B. As with other provisions, the EOHED is charged with issuing any emergency regulations, guidance, and forms needed to effectuate this provision of the EMFM Act.
Mortgage Foreclosure and Payment Forbearance Provisions
The EMFM Act also contains mortgage foreclosure and payment forbearance provisions applicable to certain Massachusetts properties and mortgage loans. For Residential Properties that are not vacant or abandoned, creditors, mortgagees and persons having an estate in mortgaged properties shall not, during the term of the EMFM Act: (i) cause a notice of foreclosure to be published pursuant to M.G.L. c. 244, § 14; (ii) exercise a power of sale in a mortgage; (iii) exercise a right of entry; (iv) initiate a judicial or non-judicial foreclosure process; or (v) file a pre-foreclosure complaint under the Servicemembers’ Civil Relief Act, 50 U.S.C. § 3901 et seq. These mortgage foreclosure forbearance restrictions do not apply to commercial properties, including Small Business Premises Units. In addition, for Residential Properties as defined in M.G.L. c. 244, § 35B (i.e., a mortgagor’s principal residence if a 1-4 family property), creditors and mortgagees shall grant to mortgagors a forbearance on mortgage payments for not more than 180 days, if the mortgagor submits to the mortgage servicer a request affirming a COVID-19 Emergency Declaration financial impact. Such a mortgage payment forbearance shall include:
- waiver of additional fees, interest and penalties as if the mortgagor had made timely payments under the mortgage;
- a provision that the amount of the forborne payments will be added to the end of the mortgage, unless otherwise agreed by the mortgagor and mortgagee; and
- the mortgagee shall not furnish negative payment reports to consumer credit agencies with regard to mortgage forbearance payments.
With regard to contractual mortgage payment obligations owed to mortgagees, lenders and loan servicers, the EMFM Act expressly provides that it does not relieve borrowers from making payments on their mortgage loans, or restrict mortgage servicers and lenders from collecting such payments, but as with the eviction moratorium provisions it clearly provides stark restrictions on the available foreclosure and collection remedies during the COVID-19 Emergency Declaration. The EMFM Act also provides that mortgagees and lenders are not required to grant payment forbearances on any mortgage loans on Residential Properties where the request is made after expiration of the EMFM Act.
Reverse Mortgage Provisions Allowing for Credit Counseling by Video or Phone
Massachusetts law currently requires borrowers taking out a reverse mortgage to first attend and complete an in-person credit counseling course offered by a third-party organization approved by the Massachusetts Executive Office of Elder Affairs (“OEEA”). Recognizing social-distancing requirements imposed in light of the COVID-19 Emergency Declaration, and the advent of remote technologies that have come to the forefront during this period, the EMFM Act provides that for the origination of reverse mortgage loans, borrowers may take a synchronous, real-time credit counseling course by video-conference or telephone from an OEEA-approved source.
 EMFM Act §§ 6, 7.
 EMFM Act § 3.
 EMFM Act § 1.
 EMFM Act § 3(a).
 EMFM Act § 3(b).
 EMFM Act § 3(d).
 EMFM Act § 3(c).
 EMFM Act § 3(e).
 Id.; EMFM Act § 3(g).
 EMFM Act § 3(f).
 EMFM Act § 4(a).
 EMFM Act § 4(b).
 EMFM Act § 4(c).
 EMFM Act § 5(a).
 EMFM Act § 5(b).
 EMFM Act § 5(c).
 EMFM Act § 8.
 See M.G.L. c. 167E, § 7A; M.G.L. c. 171, § 65C1/2.
 EMFM Act § 2.