Writing "most Americans have been negatively impacted by the COVID-19 pandemic" would be something of an understatement. Across the US, Americans have keenly felt the economic, social, and societal impact of the coronavirus in recent months.
Now, various government-implemented protections for citizens, such as increased unemployment benefits and eviction moratoriums, are expiring. As a result, many citizens are rightfully concerned about how the discontinuance of these programs could impact their lives.
Today, we're exploring how COVID-19 has impacted MA residents, and what the expiration of the eviction moratorium might mean for you.
What Is the Eviction Moratorium (& when will It end?)
On April 20th, Massachusetts Governor Charlie Baker signed Bill H.4647 into law. The bill stops landlords from conducting "nonessential" evictions.
While the eviction moratorium is in effect, MA landlords are unable to evict tenants due to:
- No-fault/no cause.
However, landlords can still evict tenants for:
- Criminal activity that jeopardizes the safety of other residents or individuals on the property or in the general public, or
- Lease violations that compromise the safety of others (such as intentionally setting fire to the property, for example).
Renters must provide their landlords with a notice stating that any failure to pay rent is due to the "financial impact of COVID-19." The MA government has provided a list of documents renters can use to notify their landlords of COVID-induced financial hardships, which you can find here.
In addition to providing the notice, the renter must also provide documentation to back up their claim that their financial hardship is due to COVID-19. Such documentation may include income statements, proof of unemployment benefits, a notice of unemployment from their former employer, etc.
If renters provide notice of financial hardship due to COVID-19 and appropriate documentation, landlords cannot charge them late fees for missing rent or report missed payments to negatively impact the tenant's credit score.
Renters are not exempt from paying rent while the moratorium is in effect. Instead, renters must set up a payment plan with their landlord which might include back payments, or another means for the landlord to collect the rent owed in the terms of the lease.
Importantly, landlords also receive foreclosure protection and mortgage forbearance as part of the eviction moratorium. Lenders cannot foreclose on landlords whose tenants cannot pay due to COVID-19 and must accept mortgage forbearance requests.
However, there are caveats to the above protections for landlords. Landlords who own buildings that consist of more than five units do not receive foreclosure protections.
In short, the eviction moratorium is supposed to protect both landlords and tenants from losing access to the property and a place to call home during the COVID-19 pandemic.
The eviction moratorium is set to last either 120 days from its implementation, or 45 days after the Governor lifts the COVID-19 state of emergency for MA.
If the Governor does not lift the state of emergency, the eviction moratorium will most likely expire on August 18th, 2020, barring any extensions of the moratorium.
Why Are People Concerned About the Eviction Moratorium?
People aren't worried about the eviction moratoriums—they're worried about what happens when it expires.
More than 40 million Americans have filed for unemployment benefits since the pandemic hit. Economists across the country state that the US is technically in a full-blown recession and many predict that the COVID-19 recession will be the worst economic blow to the US since the Great Depression, even outpacing the 2008 Great Recession.
However, the terms of the coronavirus recession are different than the 2008 recession. Unlike the 2008 recession, we can't blame banks or the deregulation of the financial sector for the COVID-19 recession. Nobody could have predicted the coronavirus or the resulting economic downturn as it spread across the globe.
As a result, the US government has handled the COVID-19 recession much differently than the 2008 recession. The Federal Reserve has been pumping trillions into the US economy, trying to keep the stock market afloat. The government has also provided bailouts for businesses harmed by the coronavirus and increased unemployment benefit payments by $600 per week to help those who lose their jobs.
For many citizens, the $600 a week increase to unemployment benefits was the only thing keeping them afloat financially—and now, that's coming to an end. On July 31st, the extended benefits will expire, and the Senate has been dragging its feet on efforts made by the House to extend unemployment bonuses.
Some lawmakers argue that providing increased unemployment disincentivizes workers from returning to the market. Critics argue—"what market?” Small businesses across the US have closed forever, and economist Steven J. Davis estimates that 42% of the jobs lost to COVID won't come back when the pandemic is ‘over.’ In other words, even if every US worker laid off as a result of COVID wanted to return to work, many would be unable to.
All of these factors—ending unemployment bonuses, a lack of jobs in the foreseeable future, etc.—could lead to a significant number of Americans being forced out onto the streets when the eviction moratorium lifts. Without access to increased unemployment benefits, many will be unable to develop a realistic payment plan for missed rent with their landlords—leaving the workers who can't snag the precious few jobs available on the market high and dry.
How will the Eviction Moratorium Ending Impact MA Residents?
Massachusetts residents in expensive cities, like Boston, will suffer the most if the eviction moratorium lifts. Data from Mass INC (a polling group) indicated that between April and June, almost a third of MA residents failed to pay rent in some capacity.
For many tenants, it's the definition of being caught between a rock and a hard place. Even if they were able to pay rent, the end of unemployment bonuses might make them miss payments for August—leaving them vulnerable right as the eviction moratorium lifts. In a strangled job market, most have no clear path forward—no matter where they look.
Of course, small landlords (individuals who just own a single duplex, for example), are suffering too.
The only potential solution for both parties may look something like a government bailout program for landlords coupled with a rent forgiveness package for tenants, but such legislation is incredibly unlikely to debut anytime soon.
Currently, the MA state housing court predicts that as many as 20,000 eviction filings could flood the court once the moratorium lifts. For tenants and landlords across MA, the future has never looked less certain.
If you're a tenant concerned about how the eviction moratorium may affect you, we can help. At Morrison & Associates, PC, we help citizens pursue financial stability using various legal methods.
To learn more about how we can help you during these challenging times, please contact us online or via phone at (508) 928-3038.