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April 17, 2020

State halts most evictions, asks lenders to work to avoid foreclosures

A row of two and three story apartment houses in a Maine city Photo / Maureen Milliken Gov. Janet Mills has issued an executive order halting most evictions and also has asked financial institutions to work with residential and business owners to keep foreclosures at bay.

Property owners have been ordered by the state to hold off on evictions, and lenders were asked to work with property owners to prevent foreclosures, not only to help out those affected by COVID-19, but also to keep people in place.

Gov. Janet Mills Thursday issued an executive order that prevents immediate eviction of most tenants, and also announced a short-term rent relief program to help renters and landlords.

Mills also sent a letter to financial institutions asking them to "proactively work" with home and small-business owners who are having trouble keeping up with mortgage payments because of the pandemic.

Mills announced the measures at a news conference Thursday. "We are in the midst of one of the greatest health crises of our lifetimes," she said. "Both public health as well as our shared sense of humanity decency demand that people not be forced from their homes and or businesses from their storefronts.

"It is my hope that these actions will provide a sense of relief, both financial and emotional, to Maine people struggling to make ends meet and that they will mitigate the spread of the virus by keeping Maine people healthy at home," she said.

The state also, in partnership with MaineHousing, the state's housing authority, has created a rental assistance relief program for people who can't pay the rent because of loss of income related to COVID-19.

Appeal to financial institutions

Maine financial institutions have been working with customers affected by the pandemic since its effects began to cause hardship last month, said Chris Pinkham, president of the Maine Bankers Associaiton. "Our banks want to help all of their customers through these difficult times," Pinkham said.

Mills' letter discouraged lenders from initiating residential and commercial foreclosures and asked them to pause foreclosures in progress.

She asked that particular attention be paid to landlords — "those who are responsible for thousands of rental apartments, homes, retail and other commercial establishments" —  and provide flexibility, since their tenants may not be able to pay the rent.

“These property owners are an important part of the economy that will need time to recover, and they are key to keeping people in their homes during our emergency orders and to keeping small businesses ready to reopen when the crisis has passed," Mills said.

Maine financial institutions already have forbearance and restructuring programs in place to help with the hardship caused by the pandemic, Pinkham told Mainebiz Friday.

"We appreciate Gov. Mills and her staff for reaching out to the industry and learning about forbearance and restructuring programs already in place statewide," Pinkham said. "Consumers who are having financial challenges or anticipate challenges in the weeks ahead should reach out now to their financial institution to discuss options that are available to customers based on their individual situation.

"Every day, Maine lenders hear from borrowers and we are able to discuss options tailored to each person’s individual situation," Pinkham said. "Bankers have a wide variety of tools available and while each borrower’s situation varies, lenders are generally able to assist with delaying principle and/or interest payments and restructuring loans."

Order preventing evictions

The executive order preventing evictions works in conjunction with a March 18 order issued by the Maine Court System. It prevents immediate eviction of tenants, other than those who engage in dangerous or unlawful conduct, for the duration of the state of emergency, which Mills recently extended to May 15.

The order also strengthened the penalties for landlords who try to evict tenants by unlawful means, and extends the timeframe for the eviction process in the event that the courts reopen before the state of emergency is terminated.

On March 18, in an effort to reduce the possibility of community spread of COVID-19 in crowded courts, the Maine Supreme Judicial Court issued an emergency order prohibiting most actions, hearings and proceedings until May 1, unless a case presents a severe threatening emergency. As a result of the order, only evictions authorized before March 18 were permitted to proceed.

Thursday's governor's order halts writs of possession — the final document allowing an eviction — that were authorized before March 18 but haven't yet been issued by a court or served by a sheriff.

She also urged landlords to refrain from mailing “notices to cure” to residents and businesses. A notice to cure asks a tenant to remedy an action in violation of a lease or face eviction.

Mills said there are also reports of landlords attempting to evict their tenants by turning off utilities such as electricity, which is against the law. Thursday's order strengthens the enforcement actions that can be taken against landlords who try to evict tenants from a home or business outside the legal process. The penalty for violating the order could be up to six months in jail and a $1,000 fine.

The order also protects “at will” tenants — those who don't have a legal agreement with a landlord, and because of COVID-19 cannot make their rent payment. It requires a landlord to provide at least 60 days notice, rather than 30, to a tenant to leave. If the landlord is attempting to evict the at-will tenants, the order also extends an eviction notice timeframe from seven to 30 days.

The order does not prevent a tenant from being evicted if the tenant poses a substantial risk to another person, immediate and severe risk to property, or a violation of health, sanitation, fire, housing or safety laws. It also doesn't relieve tenants of their legal obligation to pay rent, but provides them with more time to make payments.

Rent relief program

The $5 million COVID-19 Rent Relief Program fund will allow qualified households got get a one-time payment of up to $500 in rental assistance, which will be paid directly to the landlord. The landlord then agrees not to evict the tenant for nonpayment for the month the payment was issued.

Mills said the rent relief, which provides a $500 one-time payment directly to landords, "is what we can do right now, what we can do on the fly," and is not intended to be a long-term relief subsidy. "The key is to keep people safe and at home," she said.

Daniel Brennan, director of MaineHousing, said, “Housing is a basic human need and during this global pandemic, it is even more important. We recently announced our commitment to no evictions and no foreclosures – and are proud to put our money behind that commitment to help Mainers in need."

Brennan, in a news release following Mills' announcement, said MaineHousing understands that, for most people, the $500 one-time payment won't cover their full rent, but the program is designed to help as many people as possible.

"We also want to be clear – this is not a rent forgiveness program," Brennan said. "Renters are still responsible for paying their rent. We encourage tenants to communicate with their landlord and urge everyone to work together to get through this.”

Maine’s Community Action Agencies will administer the program locally and may have additional resources available for other needs, according to Mills' office. The funding, which comes from the Housing Opportunity for Maine Fund, will go entirely to those who benefit from the program. No organization will get administrative fees for program administration.

Shawn Yardley, chief executive officer of Community Concepts, which will administer the program in Androscoggin and Oxford counties, said the organization expects a high volume of calls, but has trained staff poised to help.

"We know people are struggling to meet their basic needs," Yardley said."We want people to know we’re ready to help them navigate the application process and get this money out to the landlords as quickly as possible.”

People who live in subsidized housing or housing financed by MaineHousing don't qualify for the program, since those programs have other tools available for those affected by COVID-19.

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