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Commercial Leases and Evictions During COVID-19

Massachusetts recently passed the Eviction and Mortgage Foreclosure Moratorium Act (“Act”), which restricts eviction and foreclosure activities for both residential and commercial tenants. The Act restricts evictions and foreclosures for 120 days, or until 45 days after the lifting of the COVID-19 Emergency Declaration, whichever is sooner.

The Act bars landlords, courts, and sheriffs from proceeding with certain non-essential evictions during Act, regarding residential properties and commercial premises occupied by small businesses. Small business not covered under the Act include (i) companies that operate in multiple states or international; (ii) publicly traded companies; or (iii) companies over 150 employees.

Non-essential evictions are (i) for non-payment of rent; (ii) resulting from a foreclosure; (iii) for no fault or cause; or (iv) for cause not involving the health or safety of others. They also do not include evictions for small business premises if the expiration of the lease (or default), occurred before March 10, 2020. Also, landlords cannot charge late fees or provide payment data to credit reporting agencies if, within 30 days after the missed rental payment, the tenant provides notice that the missed payment was due to COVID-19. The Act clarifies that tenants still have to pay rent.

If small businesses are having difficulty paying rent, they should immediately contact their landlord and discuss options. While the landlord cannot evict now, at some point, the moratorium will lift, and the tenants must pay the back rent or face eviction.

If you are a small business with commercial space (either as a tenant or a landlord) and need guidance, feel free to reach out to me, and we can discuss all your options.

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