GOV. CHARLIE BAKER signed a bill Monday that will temporarily pause evictions and some foreclosures during the coronavirus pandemic, sparking an intense debate over the rights of landlords and tenants.
Real estate industry officials said they worried the new law would embolden tenants to stop paying their rent, while advocates for the legislation said it was desperately needed to protect tenants from being evicted in the middle of a pandemic.
Some saw the outcome as a pivotal statement by lawmakers on Beacon Hill. “Hopefully there is a bigger lesson to be learned: Access to safe and affordable housing is (or should be) a basic human right,” said Georgia Katsoulomitis, executive director of the Massachusetts Law Reform Institute
Lisa Owens, executive director of City Life/ Vida Urbana, a tenants’ rights group, called the legislation very strong for both tenants and homeowners. “It does exactly what it needs to to stop evictions and foreclosure from the very beginning of the process to the very end of the process,” Owens said.
But Kate Franco of Fall River, the former CEO of a property management company and a former landlord and small business owner, called the bill “very one-sided.” Franco said if tenants can stop paying rent with no incentive to negotiate terms, they are likely to far too fall behind on rent to make it up – and the landlord still has to pay expenses like water, sewer and property insurance. Once the moratorium ends, Franco said, “Nothing’s stopping (tenants) from moving to another property. That landlord’s not going to recover.”
Franco worries that in six to eight months, there will be a huge spike in evictions and foreclosures, as tenants can’t pay back rent and landlords miss mortgage payments. “It’s almost like a tsunami,” Franco said. “They think they’re making everything right at the moment, but then the wave is going to hit.”
The bill, the subject of intense negotiations and back-and-forth between the state Senate and the House, would place a moratorium on evictions during the pandemic. Although the Housing Courts have already issued an order indicating that they are not taking up non-emergency evictions, the bill prohibits all stages of the eviction process – from the time a landlord first sends a “notice to quit” to a tenant to the final action of removing someone from their home.
Emergency evictions – if a tenant does something that affects health and safety – can still go forward.
The bill also prohibits non-emergency evictions of small businesses.
A tenant who misses rent payments and provides documentation that they are experiencing a COVID-19-related hardship cannot be charged late fees. The rent will be due once the pandemic ends.
If an owner who lives in the building and owns less than four units experiences a COVID-19-related hardship, the bill establishes a forbearance period of up to 180 days in which the owner does not have to make mortgage payments. The missed payments will be tacked on to the end of the mortgage and repaid then.
The bill will let landlords access a tenant’s last month’s rent, if it has been prepaid, to cover expenses. It does not allow a landlord to use a tenant’s security deposit.
The moratorium will remain in effect for 120 days, or 45 days after the coronavirus state of emergency expires, whichever is sooner.
Housing rights advocates had been pushing for the bill as a way to avoid having tenants or homeowners forced out of their homes for financial reasons during a pandemic, at a time when people are being instructed to stay at home for public health reasons. They argue that just the threat of eviction could incentivize people to continue working even if they have the highly contagious illness.
While the courts have stopped processing non-emergency evictions, advocates say allowing landlords to send a “notice to quit” is enough to scare many tenants into leaving. More than 600 eviction filings have occurred since mid-March, according to housing advocacy groups, which is the first step toward an eviction.
Rep. Mike Connolly, a Cambridge Democrat who sponsored the initial version of the bill, called it a “strong and robust” bill to keep people in their homes, while giving some assistance to landlords by letting them draw on prepaid rent money.
Katsoulomitis of the Massachusetts Law Reform Institute called the law “a fair and equitable bill that protects both renters and homeowners during this unprecedented crisis.” “This legislation will help keep thousands of individuals and families out of harm’s way during this pandemic and will provide not only economic stability but also will advance public health concerns by ensuring people remain safely housed,” Katsoulomitis said in a statement.
But property owners say that while the bill may serve public health interests in the short-term, it will create problems in the long-term for landlords, tenants, and communities.
Gregory Vasil, CEO of the Greater Boston Real Estate Board, warned that large and small property owners could “get crushed by this.”
Vasil said often landlords start the eviction process as a way to get a tenant’s attention and get access to services provided through the Housing Court. He said he has been told by Housing Court officials that 70 percent of cases currently going through the court system are being settled by phone mediations. Courts can arrange for a tenant to get mental health services or help dealing with hoarding.
Letting a landlord file a notice to quit, Vasil said, “doesn’t mean the person’s in the street with their belongings, it means the court gets involved, then the process begins.”
Vasil worried that under the bill, tenants will stop paying rent, then fall so far into arrears they cannot catch up once the moratorium lifts. At that point, the court will also face a backlog of eviction cases, so it could be late 2020 or 2021 before a property owner could get rent or get a tenant evicted. Tenants could also simply move out. “If you go down that road, they’re going to have to consider a bailout for property owners because you’ll have a mess on your hands,” Vasil said.
Skip Schloming, executive director of the Small Property Owners Association, worried that the bill will open up the possibility of widespread “rent strikes.” Eviction, he said, is “what makes most tenants pay rent.”
If there is widespread nonpayment, he said, landlords will not have money to clean and maintain buildings, especially in low-income areas where the rents are lower. Schloming also worried about a spike in foreclosures and abandoned properties once the moratorium lifts.
Doug Quattrochi, executive director of Mass Landlords, said in a 24-hour survey of members conducted Thursday and Friday, 118 landlords responded and 22 percent reported that they did not know how they were going to pay their bills. “A lot of renters are perceiving they don’t need to pay rent for this four-month period,” Quattrochi said.
Quattrochi noted that the forbearance period for mortgage payments only applies to a small segment of landlords, and many others are likely to default. He said landlords don’t have access to unemployment benefits, and there is no talk about forgiving real estate tax payments. “The whole economy is crumbling around us and unless we shore it up here, we’re going to have long-term issues,” he said.