Rent Cancellation bills 191 H.4878 HD.5166, S.2831 SD.2992
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2020: There is a bill before the legislature that represents an existential threat to residential real estate rentals:
H.4878 HD.5166 An Act to guarantee housing stability during the COVID-19 emergency and recovery
H.4878 HD.5166 and its sister bill S.2831 SD.2992 would:
- Cancel, not postpone, cancel rents for the period March 10, 2020 onward until 12 months after the end of the state of emergency (whenever that is);
- Put the cost of a public health emergency on the backs of mom and pop businesses;
- Enact just cause eviction rent control, outlawing rent increases, hindering major renovations, and creating permanent tenancies; and
- Enact eviction sealing, making it impossible to screen tenants adequately, and unexpectedly creating secret courts open to bribery and corruption.
The bill is unimaginable in its shortsightedness and political opportunism. The only crumbs for housing providers would be (1) paltry mortgage forbearance of as little as six months for some owners, and (2) an empty promise of a future fund to raise donations for us.
We must stop this ludicrous bill, which has already embarrassingly attracted over a quarter of the legislature as cosponsors. We could instead accomplish every legitimate objective with our Fair and Equal Housing Guarantee via Surety Bonds.
We have prepared detailed talking points opposed to H.4878 HD.5166, which we need you to use at the earliest opportunity by calling Reps and Senators:
MassLandlords urges all owners and managers to contact their Reps and Senators to oppose the bill using the talking points below. If you have questions before taking action, reply or call 774-314-1896 and leave a voicemail, we will help you prepare.
File Written Testimony By 9am July 28, 2020
This Bill Was Redrafted into the Infinite Eviction Moratorium
Your Rep & Senator Both Want to Hear from You on H.4878 HD.5166 and SD.2992
Legislators depend on a connection with their constituents to get reelected. If they aren’t aware of what’s good and bad, they will make bad choices. You may be the only person who is calling them about an issue. Every voice matters.
1a. Find your Rep and Senator
https://malegislature.gov/search/findmylegislator
First find and call the rep and senator where you live. If you have time, also call where each property you own is located.
https://malegislature.gov/Bills/191/HD5166
Click the bill link to see if your Rep and Senator sponsored the bill.
1b. Recommendation:
Prepare to have the conversation in a flexible order; make notes to hit all your points.
2. Call and Start by Asking Permission to Share Your Viewpoint:
You probably will be put through to the legislator’s aide. This is OK. The aide will tell the legislator what you said. Adjust these to reflect reality:
1. “I’m a MassLandlords member/participant…” or “I’m a landlord…” “...living/working in your district.”
2. “I’m ________ (insert your own adjective but do not swear: concerned; outraged; incandescent with rage) about H.4878 HD.5166 An Act to guarantee housing stability during the COVID-19 emergency and recovery. Can I tell you about it?” (listen for their response; if it’s a bad time, schedule a call back.)
3. Acknowledge their Current Position:
If they sponsored: “This is something you have cosponsored. I’m asking you to reconsider.”
If they did not sponsor: “Please I’m asking you to oppose this legislation.”
Always: “I have 5 reasons why this bill is ruinous.”
4. Share Five Official Talking Points.
1. Say “One:” This bill would cancel my rents. Not postpone them, cancel them, until Aug 2021 at the earliest.
a. There is nothing that requires tenants to pay rent during the emergency.
b. It specifically removes my ability to recover rent in court or by mediated agreement afterwards.
c. In order to collect rent, I would have to prove they can pay.
d. This is impossible. I’m not a private detective! I don’t have access to their bank accounts!
e. COVID-19 is a public health emergency. The public should pay, not housing providers.
f. If the public doesn't pay rents, the knock-on effects will sharply curtail municipal budgets. For-profit landlords pay real estate tax that funds towns and cities.
g. Say, “that’s one.”
2. Say “Two:” The only cost reduction for housing providers is six to 12 months of foreclosure moratorium, depending.
a. It only apples to owner-occupied properties.
b. Rule of thumb, the mortgage is only half the cost of operating: I still have to pay real estate taxes, insurance, repairs, keep the place up to code, pay for extermination, mowing, utilities, etc.
c. How can I pay for all this with no rent?
d. If I take the mortgage forbearance, I have to give up rent even if I can prove the tenant can pay!
e. Say, “that’s two.” (Keep it moving.)
3. Say “Three:” There is no public funding in the bill.
a. Keeping people housed is necessary for the public interest. The public should pay, not put it all on me.
b. There’s a placeholder, but there’s no mechanism to generate funding.
c. Whatever funding may appear would apply to small landlords (leaving out half the housing) and nonprofits (who pay no tax).
4. Say “Four:” The bill creates “just cause eviction rent control”
a. Raising the rent will be illegal and punishable even if my rents are already below market, and I didn’t raise them because of COVID-19.
b. Renovation will be illegal. Sometimes buildings need to be sold vacant or tenancies need to be terminated to gut the building, repair major structural defects, eliminate dangerous plumbing and electrical nonconformances.
5. Say “Five:” The bill creates eviction sealing.
a. There’s already a process for the courts to seal someone’s record.
b. Eviction records are relevant for landlords to see. We have an obligation to our current renters to welcome new residents who will be respectful, equally contributing residents.
c. We’re in danger of having secret courts in Massachusetts. You probably didn’t notice, but the Boston Globe sued the Supreme Judicial Court for access to show-cause hearings, and they lost. If we can’t see what happens in the courts, we pave the way for corruption and bribery.
5. Share your Personal Story
Example: “So that’s my five points, let me just add: I’ve been in business 12 years. I run a good property. This bill will ruin me. I’ll sell out to condo converters or a slumlord, I don’t care who buys, I can’t operate free housing for years.”
6. Listen. Talk. Finally ask, “I’d Like to Ask You to Support our Alternative:”
“A Fair and Equal Housing Guarantee via Surety Bonds does everything anyone could want, no one will get evicted, but it won’t bankrupt me or the Commonwealth. The bill isn’t filed, but the text is online, anyone could be first to file it:”
Recommend they “Google ‘MassLandlords Fair and Equal Housing Guarantee,’ or get an email, share our link:
https://masslandlords.net/policy/fair-and-equal-housing-guarantee-via-surety-bonds/
“I’ve taken enough of your time, but in a nutshell, it’s just a guarantee of rental housing paid out of future tax revenue. And it was created with lots of input from landlords and renters, which is the way housing policy should be.”
“Please oppose/reconsider your sponsorship of H.4878 HD.5166. Thank you.”
7. Fill out our Response Form:
https://masslandlords.net/grassroots
8. Forward these talking points
You probably know a housing provider who hasn’t been paying attention. Now is the time to get them to pay attention.
9. Contact the Housing Chairs etc.
Due to the lack of formal hearings during the COVID-19, it is important if you still have energy to also call or email at least the chair and vice-chair on both the house and senate side of the Joint Committee on Housing. Note that anger or hostile communications with the committee will hurt our cause. Please be careful. Only take this step if you still have energy to both call and be restrained:
Following are questions pertaining to H.4878 HD.5166 from the Surety Bond Webinar Recorded July 8
H.4878 HD.5166 is the renter advocates’ alternative to surety bonds. Isn’t their "rebuttable presumption" nonexistent as a reality?
We agree with this assertion. The “rebuttable presumption” of H.4878 HD.5166 means that unless a landlord can prove nonpayment was not due to COVID-19, the renter need not pay rent. In practice, this means no renters will pay rent. The MassLandlords Fair and Equal Housing Guarantee via Surety Bonds does have some moral hazard associated with it, but nowhere near the “rebuttable presumption” level present in H.4878 HD.5166. We have worked hard to make sure rent is paid by the renter when possible.
Which rental units would be within the scope of H.4878 HD.5166 and which outside its scope? What does H.4878 HD.5166 provide regarding the covered unit.
All rental units would be within the scope of rent cancellation, just cause eviction, and eviction sealing. Only some rental units would be within the scope of the placeholder fund to cover owner costs. Roughly, priority will be given to nonprofits and owners with 15 units or less. The details of the fund were not part of H.4878 HD.5166.
In H.4878 HD.5166, there is no provision regarding people trying to sell their properties and deliver the property vacant.
Correct, just cause eviction regulations as proposed for Massachusetts remove the ability to renovate or repurpose a structure.
If rent payments are being canceled, would mortgage payments on the rental properties be canceled as well?
No, that’s a major shortcoming of H.4878 HD.5166.
Rent Cancellation Bill Claims to Promote Stability, but Leaves Landlords Out of the Discussion
By Kimberly Rau, MassLandlords writer
This was the image used on Facebook to promote a July 2 briefing on HD5166. Though supporters of the bill say that it is not rent cancellation or a form of rent control, the image selected includes clear proponents of the latter. Source: Facebook
Massachusetts Representatives Mike Connolly and Kevin Honan have co-sponsored a bill that is intended to provide stability to renters, homeowners and landlords during the coronavirus pandemic and following recovery period. It is titled the Act to Guarantee Housing Stability During the Covid-19 Emergency and Recovery, and as of its publication, there are some points in this bill that need further examination.
The full text of the bill is available here, but some of the main points for tenants include:
- a ban on evictions for missed rent from the start of the covid-19 pandemic and extending 12 months past the end of the state of emergency;
- “just cause” eviction protections extending 12 months past the end of the state of emergency; and
- rent freezes at pre-pandemic rates for 12 months.
For landlords, the bill allows for:
- if owner occupied, a ban on foreclosures for both the time of the pandemic and 12 months following the end of the state of emergency;
- the establishment of a recovery fund to help property owners who lost income during the pandemic, with priority given to working-class, owner-occupant and non-profit landlords (as well as landlords who own 15 or fewer units); and
- the establishment of a governing board to oversee the administration of the recovery fund.
This bill, which was drafted without input from landlords or landlord advocacy groups in Massachusetts, is problematic in the ways it will negatively affect both landlords and tenants. Peter Vickery, an attorney who works with MassLandlords, composed a lengthy testimony opposing several aspects of the bill, which we will highlight here.
Rent Cancellation
Section 2 of the bill calls for rent cancellation, that is, tenants would not have to pay landlords for missed rent, unless the housing provider could prove to the courts that the reason their tenant did not pay was in no way linked to “the conditions and/or events described in the Emergency Declaration.”
As worded, this is unclear whether the bill is addressing tenants who were adversely affected by the reason for the emergency declaration itself (that is, they were directly affected by the outbreak, transmission or symptoms of COVID-19) or if it refers to anyone affected by the entire state of emergency (for example, people who lost their jobs or income due to the stay at home orders). If it’s the first case, then that number of people will be relatively small, but if it’s the second, then that makes anyone in Massachusetts eligible for rent cancellation.
As worded, the act also leaves it to landlords to prove that a tenant was not paying rent for reasons unrelated to the coronavirus. If the initial presumption is that anyone not paying rent was skipping payments because of the pandemic, instead of the other way around, this would make it difficult for landlords to recover control over their rental property.
As Executive Director Doug Quattrochi wrote in an open letter to legislators, “To rebut the presumption of impact due to COVID-19, a landlord would have to meet judicially exacting standards for evidence, including but not limited to subpoenas for renter tax returns and bank statements, dumpster diving in the hope of finding such documents, or hiring a private investigator to track down employers, supervisors, or family to attest to a renter’s financial wherewithal.”
Vickery went on to say that, since the moratorium was enacted by the state, it should be the state’s job to cover the resultant costs that are being placed on the landlords.
“Given the Commonwealth’s central role in depriving so many renters of their jobs, it would be appropriate and socially just for the Commonwealth as a whole to bear the cost,” Vickery wrote. However, the Act as it is written now puts the onus on property owners to bear this financial burden.
“Requiring housing providers to provide free housing to people who cannot afford rent because the government destroyed their livelihoods would violate Article 10 of the Declaration of Rights, which guarantees that when the Commonwealth appropriates private property for public use, the owner will receive reasonable compensation.”
Extending the Eviction Moratorium
Section 2 would also force landlords to wait an additional 12 months after the State of Emergency is lifted before taking their tenants to court for nonpayment of rent. Section 3 of the Act would also ban anything except just-cause evictions. Just-cause evictions under this Act would include nuisance claims, using the property for illegal activities and non-payment unrelated to COVID-19/the State of Emergency, among others.
“Prohibiting no cause/no fault evictions is yet another way in which this bill would erode the right to regain possession of one’s own property. In no way does the COVID-19 pandemic justify this violation of a fundamental right,” Vickery wrote in his testimony.
No-cause-stated evictions are commonly used to remove renters whose dangerous and prohibited actions have terrified other residents into refusing to testify. Landlords in this situation are forced to choose between subpoenaing their good customers, or simply declaring to the court “I am not renewing, as is my right.”
A further drafting deficiency disallows any reporting to credit bureaus for unpaid rent. This appears to create another incentive for tenants to continue not paying. But bill drafters are not qualified to be writing this kind of legislation.
“Data furnishers are being asked to report nothing, which for users like landlords who view month-by-month trade histories, will stand out compared to renters who received a good report, rather than no report, during the same period,” said Quattrochi.
Rent Freezes are Rent Control
Research shows that overall, rent control hurts cities and tenants in the long run. You can read MassLandlords’ extensive library of articles on rent control if you need more information on how rent control works.
By freezing rent wherever it was as of March 10, 2020, the Act is essentially implementing rent control at a time when landlords may already be under market, and strapped for cash with at least some renters whose incomes have not been affected. With back rent being difficult to recover, no way to get new tenants if the current ones won’t leave, and mortgage lenders still looking for house payments, this puts rental property owners in a tight spot.
Eviction Sealing Hurts Tenants and Landlords
Section 4 of the act calls for court records related to non-payment of rent to be sealed. It also flies in the face of state precedent, which typically only seals court records in certain cases (for example, cases heard in family court or matters involving juveniles).
“The obvious goal is to prevent housing providers from screening out applicants who have defaulted on their rent in the past,” Vickery wrote. “Conversely, of course, tenants would not know which landlords are trigger happy, i.e., prone to seek eviction for rent that accrued during the emergency. From the standpoint of a renter shopping around for good landlords, this seems like something worth knowing.”
In other words, sealing eviction records could protect a tenant from prejudice (though a reasonable landlord would likely take the circumstances of global pandemic into account when choosing a tenant). However, it also prevents tenants from doing due diligence when researching their potential landlord. No one wants to rent from a landlord who takes people to court at the drop of a hat.
Priority Given to Non-profit Landlords
The act creates a Housing Stability and Recovery Fund that will help property owners with lost rental income (see bullet point 2 of the “landlords” list). Groups that will receive priority for funding would include non-profit landlords.
While giving priority for funding to non-profit groups is typically laudable, in this case, it bears noting that non-profit housing providers already receive subsidization. Non-profit landlords do not pay real estate taxes on their rental housing units. This is a substantial savings, and one that other landlords, regardless of rental unit size, have not been afforded during the pandemic. Therefore, as worded now, this act puts for-profit landlords at a disadvantage when it comes to recouping losses during the eviction moratorium.
Governing Board Does Not Specifically Include Landlords
The act does include the creation of an oversight and advisory board that would make recommendations on administering the Housing Stability and Recovery Fund. According to text from the act’s information sheet, this board will include “members of the Legislature’s Coronavirus Working Group as well as strong representation for people from communities hardest hit by the pandemic and housing crisis.”
What’s concerning is that this wording does not specifically allow for the inclusion of or input from landlords or landlord advocacy groups. As the act was drafted without landlord input, it is a red flag that the group administrating fund dispersal may also exclude landlords from having a voice in the process.
It is already Difficult to Collect Rent Owed
One of the talking points for tenants in the bill is “strong protections against unfair debt-collection activities impacted by Covid-19.” This wording is vague and could cause undue hardship for property owners in the months following the pandemic. This act could effectively extend the eviction moratorium indefinitely.
If the state of emergency was declared over in August, which seems unlikely at present, the earliest landlords might be able to recover their rental units for use would be mid-2021.
“The bill is the kind of ignorant partisanship we hope to eliminate with ranked choice voting,” Quattrochi said, referring to Question 2 on this November’s ballot. “Those who are being asked to solve the housing crisis and the pandemic should first prove themselves capable of finding consensus.”
MassLandlords members and the Board of Directors strongly oppose this bill.
