Restrictions on Eviction under the CARES Act

     Congress passed the Coronavirus Aid, Relief, and Economic Security Act’’CARES Act last week and most of the news has been about the payroll protection program and the checks that the government will be sending out to many Americans in the coming weeks.

     Section 4023 of the Act relate to forbearance of loan payments for multi family homes and a moratorium on certain evictions.  Here is what you need to know:

• If you have a federally backed multi-family mortgage loan and are experiencing a financial hardship because of COVID-19, you can request a forbearance for up to three 30 day periods on your mortgage and should reach out to your lender for relief.  To do so, you had to have been current with your mortgage as of February 1, 2020.  However, these sections apply only to properties designed for 5 or more dwelling units

• If you receive a forbearance on your mortgage, during the time of the forbearance you cannot evict a tenant for non-payment of rent or other charges, nor can you charge any late fees, penalties or other charges.

• You also cannot send a notice to quit to that tenant, for any reason until at least 30 days after the forbearance expires.

     Section 4024 of the Act creates a 120 day moratorium on evictions on "covered dwellings" beginning March 27 and running through approximately July 27.  During this time period a landlord who has a federally backed mortgage for any residence - regardless of the number of units in the building -- cannot evict tenants for non-payment of rent or other charges.  Late fees are not permitted.  Notices to quit cannot be sent until at least 30 days after the 120 day moratorium. 

     Nearly 2/3 of mortgages are federally backed, so you should check with your lender and find out if you might qualify for forbearance.

     Finally, remember that forbearance does not mean forgiveness.  You are still responsible for the payments, but you have a break from paying.

Eviction Basics - Tenant Perspective

     Most of the questions we get from residential tenants fall into 2 categories -- either they have received an eviction notice and are not sure what to do or, they are having a problem with their unit and feel the landlord is not being responsive. We'll address eviction now and conditions in our next blog post.

     There are different types of notices to quit that one can receive -- you can receive a 14 day notice to quit, a 30 day notice to quit or a three month notice to quit.

     A 14 day notice to quit is solely for if you, the tenant, did not pay your rent.  If you have a lease, you have a chance to cure.   So long as you pay all rent due, interest and costs of the suit before the day the answer is due, then your lease is not terminated.

     If you do not have a lease, the rules are bit different.  First, you only have the right to cure if you have not received a notice to quit for non-payment of rent in the past 12 months.  Second, if your notice to quit has some required language requiring you to pay within 10 days, then you must do so to preserve your tenancy.  If your notice to quit does not contain the statutorily required language, then you have until the day the answer is due to get caught up on your rent.

     If you do not have a lease, then a landlord can terminate your tenancy for a good reason (you are violating the rules of the building), no reason (this is a no fault eviction) or for a bad reason (you carry a purple handbag or you like heavy metal music).  A landlord, however, cannot evict you for an illegal reason such as your gender, sexual orientation, ethnicity, national origin, race, religion, disability as well as a few others.  If you pay rent monthly, then the landlord must give you either one full month's notice or 30 days, whichever is longer.  If you pay rent quarterly or you do not pay rent at all, then the landlord must give you three full months' notice in the notice to quit.

     A tenant without a lease, even a long time tenant, can be evicted and there is often little that can be done, unless there are condition issues or other defenses or counterclaims available.

Eviction Basics - Landlord Perspective

     We get a fair amount of calls from landlords who want to evict their tenant.  Here are some basic things to keep in mind.

1.  If you have a lease with your tenant, then the tenant has to have violated the lease in order for you to be able to evict them.  If a tenant with a lease has not paid rent, then you send a 14 day notice to quit.  Any other reason requires a full calendar month's notice or 30 days whatever is longer.  If you serve a 30 day notice to quit today, May 4, 2017 - the tenant has until June 30, 2017 at midnight to vacate.  There are some very narrow exceptions to these rules if there is drug use or if it is at the very end of the lease.  If you have either of those situations, call us to discuss.

2.  If your tenant has no lease, the same rules apply for non-payment of rent.  And, the same rules apply for the timing of a 30 day notice to quit.  The only difference is that if the tenant does not have a written lease, you may evict them without cause.  In other words, you can evict a tenant for: 1.) a good reason -- they are smoking or loud; 2.) a bad reason -- you don't like them anymore.  They have green hair; or .3) no reason at all.  HOWEVER, you cannot evict a tenant for an illegal reason.  You can not evict someone because of their race, gender, religion or nationality.  You can not evict someone because they have a child or a disability or secure a government voucher for housing.  

3.  If your tenant is withholding rent because of conditions at the unit, proceed carefully.  If the tenant followed the requirements under the statute to withhold rent and you stake steps to evict him or her, you must show, by clear and convincing evidence, that you are not evicting the tenant in retaliation for his or her complaints.

4.  Do not undertake self help and change locks or move your tenant's property out of the unit.  The law imposes treble damages, plus an award of attorney's fees to landlords to do not follow the prescribed process.

5.  Hiring a lawyer to undertake the Notice to Quit is a wise investment.  We know the timing requirements and services rules.  If the Notice to Quit is not done right, your case can be dismissed and you have to start all over again, losing considerable time in getting your tenant out of the unit.

Month to Month Tenancies

     When we receive a call at the office from a potential tenant client, the first thing we need to determine is the type of tenancy the tenant has.  If you have no written lease, then the tenant has a month to month tenancy.  That means that the landlord or the tenant can terminate the rental relationship on one full month's notice.

     Not having a lease has advantages and disadvantages for both landlord and tenant.  If you are a tenant, no lease means you can move fairly easily and quickly.  This can be great if you don't like the place, get noisy neighbors or decide to purchase a home.  It can be less than ideal because the landlord can require you move on as little as 30 days' notice for any reason that is not discriminatory.  The landlord can also seek to raise your rent at anytime.  If you receive a notice to quit and do not have a lease, you will need to move.  There may be some negotiating with the landlord to figure out a time that is mutually convenient, but ultimately, you must move.  This is true even if you have lived in the unit for a very long time.

     From the landlord's perspective, not having a lease gives you the freedom to evict someone without reason.  For example, if a tenant has  lease, is paying rent and generally abiding by the terms of the lease, but the landlord just does not like the tenant (for some non-discriminatory reason), the landlord does not have grounds to evict the tenant and must live with the tenant through the end of the lease term.  With no lease, a landlord can send a notice to quit and with any luck, the tenant will move.  The tenant can have the property available on reasonably short notice for a friend or relative who needs a place to live.  You may also be able to charge a bit of a premium as there are certain groups of people in need of temporary housing.  These would include people doing renovations on their home (either by choice or because of some sort of catastrophe), people moving out of their residence because of a divorce, people relocating, and people with temporary job assignments, just to name a few.  The disadvantages for the landlord are that the tenant could leave at anytime and you could end up with a bit of a revolving door at your unit.  Re-renting a place takes time, effort and expense.  You also do not have the chance to specify rules or regulations that you wish to have followed.

     So when is it better to have a lease as a tenant?  If you plan on staying where you are for at least a year and do not want to move, you should seriously consider a lease.  Similarly, if you have been in a unit for a number of years and do not want to move, you should make sure your lease is renewed.  On the other hand, if you fall into any of the above categories -- recently separated or divorced, moving to a new town, or desirous of home ownership, then a month to month tenancy would be better for you, unless the landlord is willing to give you a short term lease.

     From a landlord's perspective, in most cases you are better off having a lease.  Your tenant is responsible for rent for twelve months and you can specify the terms of the tenancy.  You can say no smoking, no waterbeds or no space heaters.  You can charge a tenant for gas or electricity of separately metered.  You can indicate fees for rent not paid for 30 days.  However, there are a few situations when you may not want to have a lease.  For example, if you purchased the property with the intention of having a family member move in and the date of move in is uncertain, then perhaps you want to rent the unit for a few months.  Depending on your town, it may be easy to rent properties and you are happy with the premium you can get for rentals of several months at a time because there are always people who want to rent.  You may not want a lease if you live in the same building as the rental unit and want to see if you and the tenant get along without being locked into a year long lease.

     Finally, you can have a written month to month lease which could be a good combination in many circumstances.  The amount of time which must be given to terminate the lease can be spelled out, so you can make it 60, rather than 30 days.  The landlord also can spell out specific terms it wants included.  Both sides still have flexibility in moving out, but neither side has a guarantee of housing (for the tenant) or income (for the landlord).

The Most Common Question - Landlords

Recently, a dear friend of mine asked me what the most common substantive legal question is that I am asked as a lawyer? Since I practice in several different areas, I'd have to answer that question, by category of practice area.

In the landlord/tenant realm, the most common question I am asked by landlords is "How do I evict that tenant?  The actual process of evicting a tenant is set out in Chapter 186.  In short, you have to deliver a Notice to Quit, give the tenant a certain amount of notice -- generally either 14 or 30 days -- depending on the reason -- and then, if the tenant does not move out, you commence a summary process action.  However, in that relatively simple scheme lie many pitfalls for landlords.  A tenant may assert counterclaims against the landlord, even if the tenant is behind on the rent.  The timing of each of the steps is particular and documents must be filed with the Court on certain days.  A misstep can result in dismissal of your summary process and then you have to start all over again.

Before commencing the process to evict a tenant, I ask my landlord clients a series of questions to make an initial assessment as to how easy or difficult it will be to evict the tenant.  For example, if the landlord took a security deposit, but failed to handle it properly, the tenant can counterclaim and may receive three times the security deposit, plus attorney's fees.  If the tenant was withholding rent because of problems with conditions at the unit, that issue needs to be explored.  If the landlord was aware of bad conditions at the unit and did not correct them, the Court could find the landlord in breach of the warranty of habitability or the covenant of quiet enjoyment.  If the landlord started to evict the tenant after the landlord was aware of the tenant's complaints, then the landlord may have engaged in retaliatory behavior which also subjects the landlord to damages.

Ultimately, if you end up owing the tenant more money than what the tenant owes you, not only do you have to pay the tenant, but the tenant keeps possession of the apartment.  Before taking any steps to evict a tenant, every landlord should seek professional advice.

Curing a Defective Notice to Quit

     I was in Court this morning, representing a tenant on a motion to dismiss.  Our claim was that the landlord's Notice to Quit was defective in several ways, thereby necessitating dismissal of the summary process.  One error was that the tenant's name was incorrect.  Landlord's counsel conceded that the name was incorrect, but asked to cure the defect, rather than a dismissal.  Fortunately for my client, but unfortunately for landlords is the only way to cure a defective Notice to Quit is to start all over again.  The summary process was dismissed.

     What is to be learned from this?  First, if you are the landlord, make sure you have your i's dotted and t's crossed when you serve a notice to quit.  In this case, at least in my opinion, there were numerous problems with the Notice to Quit and the summary process.  But really, you only need the judge to agree with the tenant on one of the defects and the case will be dismissed.  Second, if a legitimate defect is brought to your attention by the tenant, then dismiss the case.  We waited in Court for more than two hours to be heard today because of the Court's schedule.  During that time, clients missed work and attorneys accrued time.  Third, if you are a tenant and are served with a Notice to Quit, take a good look at it.  Is it procedurally correct?  Was it served properly?  Some types of leases, particularly Section 8 leases require that the landlord give additional notices.  If those prerequisites were not followed, it the Notice may be invalid.