Law Halting Evictions “Shifts Financial Burden to Small Business Landlords”May 05, 2020 - By John Keith
BOSTON-Governor Baker’s signing of Bill No. 4647 last week put into effect a moratorium on evictions for commercial and residential properties throughout Massachusetts - imposing a freeze on expulsions for 120 days, or 45 days after the COVID-19 state of emergency is lifted, which was pushed back this week to May 18th.
The Real Reporter spoke to Attorney Jason Manekas, of the Boston law firm, Bernkopf Goodman, on the newly enacted “compromise Bill,” as it relates to owners and managers of properties. Manekas was forthright in his opinion of the dour implications to the landlords.
“First, I want to dispel the notion that this [Bill] is a free rent period. I’ve heard of groups encouraging residential tenants not to pay their rent, which I do not encourage. In fact, the Act spells out that tenants are not relieved of their rent obligations, so they may suffer severe consequences when the moratorium is lifted ... what this Act does in the interim is that it immediately shifts the financial burden to the landlords, many who are small business owners,” says Manekas.
Manekas says he understands that these times are unprecedented, and with the massive layoffs and shut down of the economy due to the Caronavirus pandemic, he foretells of a rough road ahead for both landlords and tenants but advocates honesty and communication between the parties.
“Many of my clients are already working with tenants on alternate payment arrangements or possible deferral programs,” Manekas adds. He says he’s seen some creative ways to ease the payment cycle by deferring rents and extending leases, then putting the deferral on the back end of the lease, but he also notes that many tenants have been granted several government and financial hardship programs to get them through the rough times. “There are unemployment filings, small business PPP programs, tenant financial assistance programs, unemployment extensions ... tens of billions of relief money going to them.”
As for the landlord’s financial responsibilities, Manekas opines, “I don’t think the breadth of this program is necessary ... lenders will have to grant deferred payments for landlords. There is no doubt that some small business landlords will fail, and we will have many residential renters who will likely stop paying landlords - and they will be struggling to make loan payments, struggling to pay maintenance, struggling to pay for property management,” he estimates.
Manekas believes the landlords who get involved early and communicate often will most likely be the ones to hold on and weather the crisis, but he advocates for equality. “When this ends, landlords need tenants, they don’t want empty buildings, so they are offering creative solutions ... but this is a sweeping Act, unlike any we’ve seen in any other states. If you’re a tenant, you should work out a way to pay your rent,” Manekas encourages.
Attorney Manekas has produced a “Practical Guide to The Newly Enacted Eviction Moratorium” and has made it available for all to read/download.