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Business Operations and Transaction Resources

COVID-19 Housing Bill Signed into Law

Updated May 8, 2020

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  • On Wednesday, April 15, the legislature’s conference committee reached consensus on a COVID-19 housing bill and today April 20, Governor Baker signed the bill into law. Read more about the process and prior bill versions from our updates on April 11 and April 4. The consensus bill,H.4647 is largely similar to the Senate version S.2631, though the bills passed by both legislative bodies had much in common. The consensus bill, provides temporary protections for homeowners and renters to help mitigate impacts of COVID-19. 

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​Protections for Homeowners

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  • The bill provides two important protections for homeowners:

    • A moratorium on foreclosures for the sooner of 120 days from enactment or 45 days after the end of the state of emergency, and 

    • 180 days of mortgage forbearance for homeowners experiencing a financial impact from COVID-19. MAR advocated in support of including this important provision which appeared in the Senate but not the House bill. Our arguments focused on the need to protect homeowners in order to prevent short sales and foreclosures and to provide residential rental property owners with additional protections in order to help prevent displacement even if tenants are unable to pay rent during the state of emergency.

 

​Protections for Tenants

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  • The bill provides several measures aimed at protecting residential and small business renters. The following provisions are in effect for the sooner of 120 days after enactment or 45 days after the end of the state of emergency. The bill also gives the Governor the ability to extend the deadlines in 90-day increments.

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  • Landlords are prohibited from: ​

    • Terminating tenancies or sending notices including notices to quit or vacate property unless the tenant is engaged in criminal activity or a violation of their lease terms that create a health and safety risk. MAR and GBREB opposed the prohibition on notices to quit, arguing that they are an essential procedural step towards accessing settlement and programmatic assistance for both parties.

    • Imposing late fees or reporting to credit agencies for non-payment of rent.

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  • Courts are prohibited from:

    • Accepting filings or scheduling court events related to non-essential evictions and tolls the deadlines of currently pending cases.

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  • Law enforcement officials are prohibited from:

    • Executing non-essential evictions.

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​Protections for Landlords

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  • The bill extends some protections to landlords. The mortgage forbearance covered above provides some relief, though it is limited to owner-occupied properties with four units or less. The bill also permits landlords who have received rent in advance, such as a last month’s deposit, to spend it on expenses such as mortgage payments, utilities, and property maintenance.

E-Notarization

Updated April 28, 2020

 

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  • The bill authorizes notarizations to occur through the use of real time electronic video conferencing during the current state of emergency. It lays out a specific process through which these notarizations must occur: 

    • All parties and the notary must be located in Massachusetts. 

    • All principal parties must provide proof of identity either during the video conference or by sending a copy of identification materials to the notary. 

    • The notary must observe execution of the document by all parties through real time electronic video conferencing. 

    • All executed documents must be sent to the notary for their stamp and signature following the video conference. Mortgage closings require a second video conference to confirm that the documents received by the notary are the same ones that were executed. 

 

  • We believe the bill balances protection from the COVID-19 pandemic with maintaining the rigorous procedural safeguards essential to Massachusetts transactions. We are proud to have played a role in helping to protect the health and safety of Realtors® and their clients while providing an effective means to continue the practice of real estate during this state of emergency. 

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March 19, 2020

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  • MAR has requested that the governor issue an emergency Executive Order that would permit a form of e-notarization through video conferencing. We are also tracking the issue at the federal level where remote online notarization (potentially the language of S.3533, “Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020”) may be included in a federal virus response bill. 

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  • If you are having issues with notarizations at closings, please contact the MAR Legal Team. 

Small Business Loans

​Updated April 15, 2020

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  • On March 16, the Governor announced that the Massachusetts Growth Capital Corporation would administer a $10 million fund that could grant up to $75,000 in low-interest loans to an eligible small business with no payments for the first six-months. However, on March 19, the MGCC announced that it was no longer accepting applications and it, along with state officials, pivoted to promoting federal disaster loans from the Small Business Administration detailed below.  

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  • On March 19, Massachusetts was approved for federal disaster loan assistance by the Small Business Administration, giving small businesses in Massachusetts until December 18 to apply for an Economic Injury Disaster Loan. These loans can be used by businesses without otherwise available credit to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Recipients can qualify for a loan of up to $15,000 paid over a maximum of 30 years with interest rates of 3.75% More information is available on the SBA website. 

Extensions Granted for 1031 Exchanges and Opportunity Zone Projects

Updated April 10, 2020

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  • 1031 Like-kind exchanges: If an investor has taken the first step of a like-kind exchange by selling the old property, and either the 45-day or the 180-day deadline falls between April 1 and July 15, the deadline has been extended to July 15. 

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  • Opportunity Zones. If an investor who sold a capital asset planned to roll over the gain into an Opportunity Fund and the 180-day deadline to do so falls between April 1 and July 15, 2020, he or she can make the investment as late as July 15. 

Guidance for Financial Institutions, Mortgage Lenders, and Mortgage Loan Servicers

Updated March 25, 2020

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  • On March 25, Governor Baker announced new guidance from the Division of Banks for financial institutions, mortgage lenders, and mortgage loan servicers. The guidance calls for all regulated financial institutions to take actions, both during and beyond the state of emergency, to accommodate mortgage borrowers unable to make timely payments due to financial hardships caused by the effects of COVID-19. These actions include, but are not limited to: 

    • 60-day postponement of foreclosures; 

    • 60-or-more day grace period for late mortgage payments that includes waiving late fees, online payment fees, and reporting to credit agencies; 

    • Offering borrowers an additional 60-day grace period to complete trial loan modifications; 

    • Ensuring the consistent availability of account management and customer service capabilities for borrowers, even if the mortgage servicer closes its office; and 

    • Providing proactive outreach to borrowers explaining what assistance they offer. 

Impact on 1031 Exchanges

Updated March 24, 2020

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  • 1031:  NAR sent a letter to the Treasury to include deadline relief for 1031 like-kind exchanges 180-day completion deadlines. As you know, there will be delays in settlements due to title companies and others closed during the outbreak.  Also, they should extend the 45-day period for identifying possible properties as exchange candidates. Relief for this program has been provided in the past during other presidentially declared disasters.

Declaration of Real Estate as an Essential Activity

Updated March 25, 2020

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  • The Baker Administration issued guidance for Realtors® during the COVID-19 State of Emergency. Thank you for your patience as we worked toward formal guidance from the state.
     

  • Showings and open houses are permitted and are subject to Governor Baker’s order limiting gatherings to ten or fewer people. If open houses are held, they must be limited to ten people at a time and social distancing must be enforced. Additionally, MAR recommends the use of hand sanitizer and thorough and frequent cleanings. 
     

  • Although allowed, MAR strongly encourages members NOT to host open houses in order to help prevent the spread of COVID-19.
     

  • Real estate closings can continue, with social distancing for any in-person transactions.
     

  • Real estate has not been deemed “essential”, meetings with clients and prospective clients cannot take place at a real estate brokerages’ physical (bricks and mortar) offices but may take place with social distancing or remotely by phone or video.
     

  • Click HERE to view the FAQ issued by the Baker Administration.
     
    Please continue to practice social distancing, remote working, wash your hands and be safe

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Updated March 23, 2020

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March 19, 2020

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  • MAR has heard of other states seeking executive declarations that real estate is an essential service, thus requiring all government personnel who work on real estate related issues to continue working through emergency situations.

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  • MAR understands that there is a housing shortage in the Commonwealth and housing residents is critical. 

Appraisals

​Updated March 23, 2020

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  • Update from NAR’s Senior Policy Representative for Federal Housing & Valuation:​​

    • “Today FHFA directed Fannie Mae and Freddie Mac to allow the use of appraisal alternatives to reduce the need for appraisers to conduct interior property inspections for eligible mortgages through May 17, 2020."

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  • This should alleviate recent concerns over transaction delays due to a lack of appraisers able or willing to enter properties to conduct interior inspections.

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​March 19, 2020

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  • We have heard of situations both where appraisers are unwilling to perform interior inspections and where homeowners do not want to grant them entry. Agents should talk to their clients to understand their comfort level on this issue and pursue alternatives where available such as using video or photographs. While those with private loans may have more flexibility to build contingencies on appraisals into contracts, this is harder to do for government-backed loans.

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  • We anticipate additional guidance from the Federal Housing Finance Agency on this issue soon. 

Fire Departments Refusing to Inspect Smoke Detectors

Updated March 25, 2020

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  • MAR has partnered with the Fire Prevention Association of Massachusetts to educate inspectors about the Governor's deferral of inspections. MAR is collecting data on behalf of the FPMA as to what fire services are still conducting inspections and if they are not, how these fire services would like to receive notification of closings that have taken place and will need to be inspected within 90 days after the state of emergency is lifted.
     

  • MAR will be sharing this list with our members and asking them to share with closing attorneys and lenders.
     

  • As of 3/25/20, 88% of fire services that responded were not conducting any inspections at this time.

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​Updated  March 20, 2020

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  • As a result of the outbreak of the novel coronavirus (COVID-19), Governor Baker has issued an executive order allowing smoke detector and carbon monoxide alarm certificate inspections as required under Sections 26F and 26F½ of Chapter 148 of the General Laws to be deferred so long as: 

    • The Parties to the sale or transfer have agreed in writing that the buyer assumes responsibility for equipping the property with approved smoke detectors and carbon monoxide alarms.

    • The buyer agrees as a condition of taking title to equip the property with approved smoke detectors and carbon monoxide alarms immediately upon taking title.

    • An inspection as otherwise required under sections 26F and 26F½ occurs no more than 90 days after the state of emergency is lifted.
       

  • MAR has drafted language that you may use to satisfy the conditions of this executive order.

    The ability to continue to engage in residential real estate transactions is critical to the well-being of our members and the Commonwealth as a whole. Thank you to our industry partners for their efforts in securing this important inspection deferral. Click here to view the letter sent to Governor Baker requesting the deferral and here to view the signed executive order.

Registries Closing or Changing Operations

Updated March 19, 2020

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  • ​MAR has been in daily contact with the Secretary of State’s office which oversees the registries and gathered information from the private sector. As of now, to our best knowledge, all registries in the state, aside from Nantucket, are at least permitting electronic recordings.

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  • However, many have adjusted their typical procedures because of the virus so we strongly advise anyone wishing to use a registry’s services to check the registry’s website and call first to understand what they require. ​

Concerns About Open Houses

Updated March 23, 2020

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  • MAR suggests that public open houses be curtailed in light of the Governor's order on 3/23/20 limiting public gatherings to a maximum of 10 people. 

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​Updated March 19, 2020

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  • MAR suggests that public open houses be limited and if they are to occur, brokerages should take proactive steps to comply with the Governor’s order and prohibit any more than 25 persons in a home or apartment at one time. Suggestions include posting a notice on the door stating that entrance will be limited and visitors should wait outside in a que that includes enough space for social distancing. As always, consult with the property owner first about their comfort level with allowing public open houses and consider cancelling open houses and providing private showings instead. Should you host open houses, be sure to comply with the 25-person maximum capacity, have hand sanitizer available for anyone entering the home and wipe down common surfaces frequently. 

  • This guidance is consistent with Governor Baker’s ruling effective March 17th – April 5th on:
     

    • “ORDER PROHIBITING GATHERINGS OF MORE THAN 25 PEOPLE AND ON-PREMISES CONSUMPTION OF FOOD OR DRINK” which states:
       

    • “Gatherings of over 25 people are prohibited throughout the Commonwealth. Gatherings subject to this Order include, without limitation, community, civic, public, leisure, faith-based events, sporting events with spectators, concerts, conventions, fundraisers, parades, fairs, festivals, and any similar event or activity that brings together 25 or more persons in a single room or single space at the same time in a venue such as an auditorium, stadium, arena, large conference room, meeting hall, theatre, gymnasium, fitness center, private club, or any other confined indoor or outdoor space.”
       

  • Additionally, the President of the United States is advising people not to gather in groups of more than 10.

Contract Addendum

​Updated March 19, 2020

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  • The MAR Legal Team is reviewing several potential options for this form, including drafts from other states and the Real Estate Bar Association. Because this situation is creating so many unique and novel issues, we strongly recommend working with independent counsel to find a solution that is appropriate for your transaction.  

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  • The standard MAR contracts do not contain termination provisions that would be triggered under these circumstances. A reasonable extension of the closing due to illness or quarantine from COVID-19 may be considered by the parties. Ultimately, it is up to the parties of the contract how they maneuver a delay in performing their contractual obligations because of COVID-19.​

Fair Housing Law

​Updated March 19, 2020

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  • Fair housing law still applies to all real estate transactions. We have heard of three types of questions on this issue: ​

    1. Whether it is permissible to restrict anyone experiencing flu-like symptoms from entering the property. 

    2. Whether it is permissible to ask clients or others about their recent travel, particularly to areas identified as having an increased risk of coronavirus. 

    3. Whether it is permissible to ask a buyer what their job is due to concerns over financing issues given recent economic changes. 

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  • Each of these questions is permissible, but to avoid potential fair housing law issues, be sure to ask all clients and prospective buyers the same screening questions based on current, factual information from public health authorities and discuss any restrictions placed on showings with your seller

Evictions and Foreclosures

​Updated March 19, 2020

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  • There is a moratorium on all foreclosures and evictions for FHA- insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages for 60 days (until May 17). There is also a moratorium on foreclosures and evictions for homeowners with mortgages backed by Fannie Mae or Freddie Mac until at least that date. 

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  • In Massachusetts, the Housing Court has suspended most eviction proceedings until at least April 21. The Legislature is considering a bill (HD.4395) that would prohibit evictions and foreclosures during the declared state of emergency. On March 25, the Boston City Council will consider a resolution that would place a moratorium on mortgages, rent, and evictions for the City of Boston during the state of emergency. 

Water Meter Readings

​Updated March 19, 2020

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  • The process for obtaining final water meter readings varies by towns. We have not yet heard of towns being unable or refusing to provide these reports, but foresee that it could potentially become a problem in the future should the number of active staffers continue to shrink. 

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  • If you are experiencing challenges obtaining water meter readings from your town, we recommend reaching out to your local association. 

Title V Reports

​Updated March 19, 2020

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  • At this time we have not heard of transactions being disrupted due to problems securing Title V inspections.  

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  • Only MassDEP-approved individuals can conduct system inspections. The New England Interstate Water Pollution Control Commission maintains lists of approved system inspectors. 

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Municipal Lien Certificates

​Updated March 19, 2020

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  • Certificates are issued by each individual city or town. Be sure to contact the municipality to make sure that the certificate will be ready for closing.  

Home Inspections

​Updated March 19, 2020

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  • We have heard of situations where either home inspectors do not want to complete inspections or homeowners do not want to permit entry to home inspectors as a result of concerns over coronavirus. 

Certificates of Occupancy​​

​Updated March 19, 2020

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  • The state building code requires a building official to inspect and issue a certificate for every new building before they can be used or occupied. We have heard of towns limiting building inspectors to emergency work only and anticipate that more towns may follow suit. 

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  • If you are experiencing challenges obtaining certificate of occupancy or open permits from your town, we recommend reaching out to your local association.

Review of Properties' Open Permits

​Updated March 19, 2020

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  • The state building code requires the issuance of permits for the erection, alteration, demolition, and moving of buildings and structures. These are handled by municipalities. We have not yet heard of towns being unable or refusing to provide this information on open permits, but foresee that it could potentially become a problem in the future should the number of active staffers continue to shrink.

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  • If you are experiencing challenges obtaining information on open permits from your town, we recommend reaching out to your local association. 

Gap Insurance

​Updated March 19, 2020

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  • Because of concerns over coronavirus and potential limits on the ability to timely record documents, some insurance companies are authorizing the issuance of loan and owner title insurance policies that cover any gap between the closing and recording.

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  • MAR has no position on the need for or efficacy of Gap Insurance but encourage you to discuss the issue with your clients and attorney. 

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