Hot news: lawsuit over eviction moratorium in NY

May 28, 2020:- Alleging that the eviction moratorium operates as a taking of their property without just compensation, a group of housing providers in New York have filed suit in federal court, according to the New York Law Journal.

Stay tuned.

man reading burning newspaper
Photo by Danya Gutan on Pexels.com

NY lawmakers extend eviction moratorium

May 28, 2020:- According to this report in News Brig, the New York legislature voted to extend the moratorium on residential evictions to last as long as the state of emergency. Originally, the moratorium was scheduled to expire in August.

Unlike Massachusetts (whose eviction moratorium will end on August 18 unless the Governor extends it)* New York’s moratorium is confined to cases where the reason for non-payment is related to COVID 19.  In contrast, the Massachusetts law, Chapter 65, prohibits housing providers starting evictions for any and all reasons, except where a tenant’s criminal activity or lease violations “may impact the health or safety” of another person on the premises or the general public.

*Under Chapter 65, if Governor Baker so chooses, he could extend the moratorium for the length of the state of emergency plus 45 days. How long will state of emergency last? How long is a piece of string?

gray yarn ball
Photo by Steve Johnson on Pexels.com

 

Eviction moratorium still in effect

May 26, 2020:- The eviction moratorium (Chapter 65) is still in effect. The earliest date on which is will expire is August 18 (120 days after Chapter 65 became law). However, the Governor could extend it by 90 days, and keep doing so until 45 after the end of the state of emergency.

End?

When will the state of emergency end? The Governor has not said. There has to be a state of emergency in effect for the Governor to issue emergency orders, so the chronology of his four-phase re-opening plan gives some clues.

No NTQs

Until the moratorium expires (August 18 at the earliest, and possibly later), housing providers must not send notices to quit, except for “essential evictions,” i.e. where the tenant’s criminal activity/lease violations “may impact the health or safety” of another person lawfully on the premises or the general public.

P.S.

May 28, 2020:- In addition to the State-level eviction moratorium established by Chapter 65, there is also a federal moratorium that Congress imposed on some properties by way of the CARES Act. As this reminder from HUD points out, housing providers are not allowed to charge late fees that accrue for unpaid rent during the 120-day federal moratorium (which ends July 25). To determine whether your property is subject to the federal moratorium, you may want to ask your lawyer.

pexels-photo-1186851.jpeg
Photo by Brett Sayles on Pexels.com

 

Rent guarantee insurance

May 22, 2020:- Missed rental payments are on the rise in Massachusetts, but a market solution may be available.

Even though the eviction moratorium law (Chapter 65) says that tenants are required to pay rent, the lack of an enforcement mechanism is leading some to skip paying the rent with a sense of impunity. Housing providers still have to pay to maintain the property and keep it up to code even when they are not receiving rent. One way for providers to stay afloat might be rent-guarantee insurance, also known as rent default insurance, which promises coverage in the event that a tenant stops paying rent.

Unless and until the Massachusetts Legislature takes up the Fair and Equal Housing Guarantee surety-bond policy that MassLandlords is promoting, some housing providers may find this kind of product helpful. And I see that one company, Avail, has a short video on the subject.

If affordable, insurance might be a viable market solution to government failure. By “government failure” I mean the Commonwealth requiring one party to provide housing without being able to go to court to make the other party pay for said housing. This forces rental-property owners to either (a) provide free housing (not a great business model) or (b) exit the market, thereby reducing the amount of rental housing available.

Ideally, Governor Charlie Baker would let Chapter 65 expire on August 18 rather than exercising his option to extend it. But if he chooses to prolong the moratorium, insurance might do the trick.

Please note that I have no contractual, fiduciary, relationship with Avail or Steady Marketplace, either oral or written, and receive no remuneration of any kind from the companies, make no representations regarding them, and suspect that there are other entities out there that offer similar insurance products. In the vernacular, I am not shilling for Avail or Steady Marketplace, or any other insurance company for that matter.  I just think that for some housing providers, rent-guarantee insurance might be worth exploring.

bitcoins and u s dollar bills
Photo by David McBee on Pexels.com

Dear Governor: One housing provider’s message to Charlie Baker

April 29, 2020:- Massachusetts law now bans property owners from seeking summary process except where a tenant’s criminal activity/lease violations “may impact the health or safety” of others.  It forces some landlords to extend credit that they cannot afford to give. This near-barring of the courthouse doors to one particular class of people (plus its forced-loan feature) prompted Frederik Winsser to write a letter to Massachusetts Governor Charlie Baker, which Mr. Winsser kindly gave me permission to publish here.

______

Dear Governor Baker:

I am writing about the effect that the COVID-19 epidemic is having on housing in the Commonwealth of Massachusetts.

I am Housing Provider – a ‘Mom and Pop’ small property owner/landlord in Massachusetts. I am a retired senior and receive a small pension, a limited social security benefit, and a small VA service connected disability payment. I depend upon my rental income to pay for my medical expenses, my mortgages, property taxes, insurance, and other bills.

Thirty years ago, I purchased my first house, a two family in Waltham. Over the years, I was working as an Electrical Engineer and invested work income as well as a tremendous amount of sweat equity into the house. My hard work allowed me to purchase additional rental properties, the most recent being a four family house fifteen years ago needing a lot of work.

Over the years I have invested a significant amount of time and money to improve the apartments with new kitchens, bathrooms, refinished interiors, high efficiency heating systems, and much more. For my four family house, after fifteen years of sweat equity and money invested, I still have a net $94,223.00 negative cash flow balance on my original investment. Only in 2019 did I finally have a small positive cash flow of $10,800.00.

I very well understand that there currently is a housing crisis in the country. A large number of people have lost their jobs and are unsure of their future financial security. I do understand that their ability to pay for the necessities of shelter, food, and health care are being seriously impacted.

There are programs such as Section 8, SNAP, etc., but placing the burden on the housing providers is unfair. Speaking for myself and other housing providers, we still have to pay mortgages, taxes, insurance, utilities, and expenses. If we don’t pay the property taxes, the city will place a lien on the property. With the current eviction moratorium, there is no practical remedy for us if the renters cannot or will not pay their rent. Yes, we can take them to court in three to six months for the back rent and hope to be able to collect the rent. By way of an example, last year I went to court to evict a tenant for repeated non payment of rent. In July she moved out with no forwarding address, still owing me over $3,500.00 in rent and legal expenses. Neither the police nor I can locate her.

In closing, would someone go to the supermarket, fill up a shopping cart full of groceries, and at the checkout counter say ‘I’ll pay for the groceries after the COVID crisis is over’. I don’t think so. Please do consider the plight of the housing providers as well.

Sincerely,

Frederik C. Winsser

Eviction moratorium: how long?

April 20, 2020:- Today Governor Charlie Baker signed the eviction-moratorium bill that will last as long as the state of emergency that he proclaimed on March 10, plus 45 days. What is the duration of the state of emergency? How long is a piece of string?

Unlike Order No. 13 (the business-closure order that expires on May 4, 2020) the state of emergency has no end date. By its terms the proclamation “shall remain in effect until notice is given, pursuant to my judgment, that the STATE OF EMERGENCY no longer exists” (all caps in original).

The new law says that the Governor may extend the moratorium in 90-day increments, so long as he does not extend it to a date more than 45 days after the end of the emergency. If, for the sake of argument, the Governor terminates the emergency on June 30, the earliest date on which a landlord could issue a notice to quit for non-payment of rent would be August 14 and the Housing Court would not have a hearing on the summary process summons and complaint until September at the earliest. Given the backlog of cases, further delays are inevitable.

The conclusion of the moratorium depends on when the emergency expires, and right now that day looks distant. There is no reason to assume that it will be in June. Because although the pandemic may be on the wane, economically we are in tatters.

According to the International Monetary Fund (IMF), by the end of 2020 the global economy will have contracted by 3%, compared with 0.1% in the recession of 2009. Unemployment in the United States is already at 22 million (at least) and likely to go up. Hospitals are laying off workers. The price of oil has fallen below zero. If there wasn’t an emergency on March 10, there certainly is now.

But even if the Governor does lift the state of emergency and lets the moratorium expire 45 days thereafter, that might not mean much. The Legislature could choose to extend the moratorium by amending the statute. That seems more likely than not.

In view of its popularity among the majority and the likely demands by tenants’ advocates for an extension, it would take real political courage to leave the statue in its present form and let the moratorium expire on time. In the language of politics, the definition of “temporary” is almost infinitely elastic.

Legislature poised to give Governor even more power

April 15, 2020:-  Just when you thought it couldn’t get any worse. If the Massachusetts Legislature passes the eviction moratorium embodied in this bill, which emerged from the Senate today, it will not only violate two of the bedrock rights that are guaranteed in the Massachusetts Declaration of Rights, but will also grant to the Governor a power that no executive branch in the Anglosphere — no English monarch even — has claimed since the 17th Century: the power of suspending and dispensing the laws. This is a step backward, a step back to the era of royal absolutism.

It was already bad enough that our full-time salaried lawmakers wished to take private property without compensation and bar people from going to the courts. As I pointed out in a previous post, Article 10 of the Massachusetts Declaration of Rights guarantees reasonable compensation when the government takes property for public uses and Article 11 guarantees everyone the right to a remedy by recourse to the law and the right to obtain justice freely and promptly. Neither of those articles contains a carve-out for when the Governor declares an emergency.

Now the Legislature intends to strip away another right, one that the people of Massachusetts granted to their Legislature, namely the power to decide how long a statute should remain in force. Section 7 of the new bill says that the eviction moratorium will expire in 120 days unless the Governor extends it. Read that again. Unless the Governor extends it. The alleged power to suspend or dispense legislation was a medieval prerogative reclaimed in the 1640s by Charles I. Things went poorly from there, for both the king and the kingdom.

If this were simply a matter of the Legislature surrendering their own rights to the executive branch, it would merit little more than a meh. But the right is not theirs to give. The purpose behind the separation of powers is to protect the rights of the people, not the rights of their full-time salaried servants in the State House.

If Governor Baker signs this bill into law we will have crossed another constitutional threshold.