COVID-19 Update and Changes for Maine Landlords
*This article is current as of May 11, 2020. The information contained herein is subject to change based on frequent policy updates. If you have questions regarding a specific matter, please contact the attorneys at Drummond & Drummond, LLP to confirm you have the most up to date information.
The rental landscape has changed dramatically due to the many policies implemented by the State and the Courts in this COVID-19 season. Landlords and tenants alike will continue to see a variety of challenges in the coming weeks to months, prompting us to produce this COVID-19 Update and Changes for Maine Landlords and Tenants. While none of us know what the next few months hold, we at Drummond & Drummond are committed to helping you navigate through this time even as the rules change around us.
If you own rental properties in Maine, it is important you are aware of the following changes which apply to residential and commercial rental properties.
1. As part of the COVID-19 Update, Courts have dramatically restricted hearings and proceedings related to all FED and landlord/tenant matters through May 30, 2020. This restriction may be extended. You may still file a request for FED, but we do not know when it will be heard. You may also file a complaint in district or superior court, but parties now have an additional 49 days to answer. This gives respondents a total of 69 days to answer a complaint compared to the usual 20 days.
Why is this significant? This is a marathon, not a sprint. Timelines are much longer than usual. Once the courts open, there will be a backlog of cases. If you find yourself needing to evict a tenant, it is important that you speak with us about your matter as soon as possible. The courts are still accepting FED filings and it is crucial to get in line to have your case heard once the courts open back up.
2. There are exceptions to the suspension of FED hearings. All FED hearings are suspended unless there are urgent and compelling circumstances to proceed with a writ of eviction. Urgent and compelling circumstances involve tenants who endanger other individuals or the property in question, tenants who are violating laws or tenants who are causing a significant nuisance to others.
What does this mean for evictions? Most cases will not be heard in the courts any time soon. Cases with urgent and compelling reasons to be heard are those that involve physical violence to others, irreparable damage to the property or illegal acts. These cases will require a special motion to the court just to be considered.
Some alternatives do exist to the eviction “freeze”. You are still allowed to negotiate cash for keys to obtain a cooperative departure. You can sue the tenant for past due rent, so the tenant recognizes the effects of staying without paying. Parties will still have the additional 49 days to answer.
3. For tenancies at will (tenancies that don’t have a lease), the statutory guidelines under 14 M.R.S. § 6002 for tenants whose evictions are sought due to the inability to pay rent, or otherwise terminating a tenancy at will, have changed.
If the inability to pay rent is due to a loss of income caused by COVID-19, landlords are required to give a 60-day notice to quit instead of the typical 30-day notice. Additionally, the provision requiring a 7-day notice to quit for non-payment of rent is extended to a 30-day notice. These changes do not relieve the tenant of the obligation to pay rent. Before you issue a Notice to Quit on a tenancy at will review the new time periods closely.
4. For Landlords that successfully obtained an eviction order prior to the hearings being suspended, there are restrictions on you serving the Writ of Possession and actually removing the tenant.
These restrictions also apply to any matter for non-payment of rent whose delinquency was no greater than two months, or pursuant to an at will tenancy 30-day notice or for an expiration of a lease. There are exceptions, but to move forward with any service of a Writ of Possession a Judge must review the matter.
5. State and Federal Governments have stepped in to offer some assistance. Under the COVID-19 Rental Relief Program residential tenants who meet various income and asset requirements are eligible for $500 rental payments made directly to landlords, as long as the landlord agrees to participate in the program.
Commercial landlords should be aware that the Federal Paycheck Protection Program requires that small businesses use 25% of the SBA loans for overhead expenses, including rental payments. Commercial landlords should seek legal advice if they wish to make alternative payment agreements with current tenants for payment of rent. Any such agreements should be in writing and follow the provisions of applicable leases.
What do you do if the tenant is not paying rent?
There is no quick answer to this one, but there are answers. Landlord actions must depend on the specific circumstances with each case, and these will be vastly different. Is the tenant in a residential or commercial property? Has the tenant had one bad month or is the tenant a perpetual offender? Was a writ issued prior to March 18, 2020? Is the tenant eligible for economic assistance? Are there other options available besides an FED action? Has the tenant requested to be released from the lease? Can a landlord restructure an agreement with the tenant? Are we playing the long game or the short?
The answers to all these questions can help direct landlords to strategic action despite the current changing environment.
What is the most important thing to remember in all this?
The rules keep changing. This does not, however, mean you are without options.
If you have questions regarding this COVID-19 update or any related issues, or find yourself in any of these situations as a landlord, please contact us to discuss these matters. We will be happy to find a solution that fits you even in the midst of these changing circumstances.
The contents of this article should not be construed as legal advice.