A few months ago, no one could have predicted that we would be living in such volatile times and that our everyday lives would have changed so dramatically. The COVID-19 coronavirus has affected us all, and the current “normal” is not at all normal.
The financial impact this public health crisis is having on the nation’s economy, has caused the state and the federal governments to become increasingly worried about the many workers, families, and small businesses who are struggling to pay their rent and mortgages. Therefore, certain measures have been put in place to help those who are struggling financially to navigate these challenging times.
The CARES ACT
On March 27th, Congress passed and President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The CARES Act provides immediate protection for residents living in properties covered by the legislation.
A covered property is any single-family or multifamily property that participates in a covered housing program, such as Fannie Mae, Freddie Mac, or a Department of Urban or the Housing Development [HUD] loan program, as well as, any rental property that participates in a federally assisted housing program.
Pursuant to the CARES Act, for 120 days starting March 27, lessors cannot:
- File a new eviction order for non-payments of rent; or
- Charge fees, penalties or other charges to the tenant related to such nonpayment of rent
The CARES Act also includes a notice that the lessor cannot evict a tenant after the moratorium without a 30-day notice.
Similarly, to protect homeowners who are experiencing financial hardship due to the COVID-19 public health crisis, the CARES Act entitles borrowers with federally backed mortgage loans to request a forbearance of up to 60 days from their loan provider, which may be extended for an additional 120 days in 30-day increments.
A forbearance is a temporary suspension or reduction of your mortgage payment that allows you the time and flexibility to manage your financial situation. During the forbearance period, you will not accrue any late fees and the late payments will not be reported to the credit bureaus. Please keep in mind, however, that your past-due payments are not forgiven, and will be due at the end of the forbearance period.
Massachusetts Senate Bill S.2631
On April 9th, the Massachusetts State Senate passed emergency Bill S.2631 banning evictions and foreclosures throughout the state during the COVID-19 state of emergency.
Under this bill, there is a moratorium on all foreclosure proceedings. This applies to all mortgage holders, renters, and businesses and to all phases of the eviction process for all non-essential evictions for a period of 120 days, which the governor may extend for an additional 120 days if necessary.
As it pertains to all non-essential evictions, this moratorium prohibits landlords and courts from:
- Initiating any eviction process;
- Sending any notice of eviction;
- Scheduling any court hearing related to an eviction;
- Entering any default judgment for eviction; or
- Enforcing any execution to forcibly evict a tenant.
Furthermore, to protect homeowners and residential property owners during the COVID-19 public health crisis, the new law also places a moratorium on the foreclosure process for a period of 120 days. What’s more, the law requires mortgage lenders to provide a forbearance of up to 180 days to homeowners who demonstrate a financial need caused by the public health crisis.
Finally, the bill prohibits landlords from charging late fees on past due rent for residential dwelling and small businesses and from submitting negative reports to credit bureaus related to unpaid rent. This protection is available to any tenant who, within 30 days, submits evidence that the missed payment was related to the financial effects of the COVID-19 public health crises.
Conclusion
The COVID-19 public health crisis has brought with it a great deal of financial uncertainty renters and homeowners. However, if you are a Massachusetts resident and you are unable to pay rent or mortgage due the financial impact of the Coronavirus pandemic, you may be eligible for relief under the federal CARES ACT and/or Massachusetts Senate Bill S.2631
You should note, however, that neither the CARES ACT nor Massachusetts Senate Bill S.2631 will relieve you of your obligation to eventually pay your rent or mortgage. These payments will still be due and owing according to your lease or mortgage agreement and a failure to pay once the moratorium expires may result in you being evicted.
For more information regarding eviction/mortgage relief during the COVID-19 public health crisis, contact The Law Offices of Richard Mucci to speak with an experienced and knowledgeable Massachusetts real estate lawyer. Contact us online or call 781-729-3999.