Can I Conduct Lien Sales?
Per legislation, lien sales could resume in Massachusetts on June 25, 2020 and there are currently no statewide moratoriums on lien sales in Connecticut, Massachusetts, or Rhode Island.
However, check with your local city or county to see if they have enacted their own ordinances restricting lien sales and/or late fees. If your town does have an eviction moratorium, please consult with local counsel on whether it affects self storage. The national SSA recommends that you do not call the town for advice.
Additionally, reach out to the units in default before beginning the lien process and find out if their non-payment is due to a COVID-related reason. If so, you should not proceed with the lien. Instead, try to work with the tenant to reach a resolution.
Finally, all liens should begin at the first step and complete the full process, even if they were in default prior to the State of Emergency.
Emergency Order Closing Non-Essential Businesses
Update: Governor Baker issued COVID-19 Order No. 33 allowing certain businesses to reopen with additional preventative measures. Self storage may remain open subject to the following requirements:
All persons, including employees, customers, and vendors should remain at least six feet apart to the greatest extent possible, both inside and outside workplaces. Establish protocols to ensure that employees can practice adequate social distancing. Provide signage for safe social distancing. Require face coverings or masks for all employees. Provide hand-washing capabilities throughout the workplace. Ensure frequent hand washing by employees and adequate supplies to do so. Provide regular sanitization of high touch areas, such as workstations, equipment, screens, doorknobs, restrooms throughout work site. Provide training for employees regarding the social distancing and hygiene protocols. Employees who are displaying COVID-19-like symptoms do not report to work. Establish a plan for employees getting ill from COVID-19 at work, and a return-to-work plan. Establish and maintain cleaning protocols specific to the business. When an active employee is diagnosed with COVID-19, cleaning and disinfecting must be performed.
Additionally, Governor Baker issued COVID-19 Order No. 52 effective October 5, 2020 regarding gathering sizes and use of masks.
News broke that Governor Baker issued an Emergency Order that will take effect March 24th at 12:00 noon requiring non-essential businesses to close their physical workplaces until May 4th. This has since been extended until May 18, 2020.
The Baker-Polito Administration issued a list detailing which businesses are considered “essential.” Under the Transportation and Logistics section (page 5 of the PDF), the fourth bullet point from the bottoms states:
“Workers who support moving and storage services”
The list in based on federal guidance and amended to reflect the needs of Massachusetts’ unique economy. And while they can remain open, they are urged to follow social distancing protocols.
At this point, self storage businesses are allowed to remain open, but are not mandated to. So if you feel that it is best for you and your employees to close your office, work from home (if able), or limit your hours, please do. Please see our earlier post, Your Facilities and COVID-19, for ideas and reminders to help run your business.
Links Regarding the Emergency Order
- COVID-19 Order No. 52
- COVID-19 Order No. 33
- COVID-19 Order No. 13
- COVID-19 Essential Services
- Mass.gov Press Release: Governor Charlie Baker Orders All Non-Essential Businesses to Cease In Person Operation, Directs the Department of Public Health to Issue Stay at Home Advisory for Two Weeks
- National SSA Post: Essential v. non-essential: Does my self storage business have to close?
- Media article: Charlie Baker has no immediate plans for additional changes to COVID-19 rules in Massachusetts (published 11/16/20)
- Media article: Baker: non-essential business to close physical sites, ‘stay at home’ advisory issued (published 3/23/20)
- Media article: LIST: Services deemed ‘essential’ under Gov. Baker’s order (published 3/23/20)
Evictions & Foreclosures During the COVID-19 Emergency
On March 27th Attorney General Maura Healey filed an emergency regulation, 940 CMR 35.00, which immediately penalized most collection efforts on debts. On page 3 of the regulation, section 35.03(1)(b) states:
For the ninety (90) days following the effective date of this regulation or until the State of Emergency Period expires, whichever occurs first, it is an unfair or deceptive act or practice for any creditor, including a debt collector, to… initiate, threaten to initiate, or act upon any legal or equitable remedy for the garnishment, seizure, attachment, or withholding of wages, earnings, property or funds for the payment of a debt to a creditor
Currently, you can resume collecting late fees, overlocking, and the lien process on June 25th (90 days after March 27th). That said, be sure to double check that the regulation has not been extended or a new regulation has not been imposed prior to re-starting the process. You will also want to double check with your local ordinances as they may have their own regulations put in place as well. Should the Attorney General extend the regulation, we recommend you consult with an attorney to analyze the risks of conducting lien sales vs. the losses you are accumulating from units that are in default.
It would also be wise to ask the tenant if they are in default due to a COVID-related reason. If they respond affirmatively, you should absolutely not move forward with a lien sale on that tenant.
Additionally, Bill H.4647, which is still in effect, restricts certain non-essential evictions for tenants of a “small business premise unit” and does not apply to those storing for household purposes. The tricky part is knowing whether your tenant is storing for household or commercial purposes. We suggest you look at each delinquent tenant individually and make a judgment on whether they are storing for household or commercial purposes.
Lastly, if you were in the middle of the lien process prior to the regulation going into effect, you will need to start the process again at a minimum of the second notice. The second notice requires that the operator provide a specified time and place for the sale, which would be outdated by now. That said, NeSSA and the SSA encourage operators to re-start the entire process. The time between the first notice and the second notice is just ten days, and it is better to be safe than sorry.
During such a confusing and ever-changing time, we urge you to err on the side of caution and empathy. Work something out with your customers if they have been affected by these tough circumstances, and hopefully in the future the goodwill you show your tenants will far outweigh the minimal lost income.
Links Regarding the Debt Collection Regulation
- Emergency Regulation 940 CMR 35.00
- Bill H.4647
- Debt Collection Regulations (includes some definitions referred to in the new regulation)
- Press release: AG’s Office Issues Emergency Regulation to Protect Consumers from Harmful Debt Collection Practices During COVID-19 Emergency
During a time like this, it is also important that you are aware of your state’s specific guidelines with respect to price gouging. This may effect street rates, promotions, and occupied rates. Below is a summary of Massachusetts’s price gouging law:
Selling “any petroleum product” at an unconscionably high price “during any market emergency” (as declared by the Governor).
Attorney General Maura Healey filed an amendment to regulation 940 CMR 3.18 which immediately “prohibits price gouging of goods and services necessary for public health and safety during a declared statewide or national emergency.” Below is a summary of this amendment:
It shall be an unfair or deceptive act or practice, during any declared statewide or national emergency, for any business at any point in the chain of distribution or manufacture to sell or offer to sell to any consumer or to any other business any goods or services necessary for the health, safety, or welfare of the public for an amount that represents an unconscionably high price. A price is unconscionably high for the purposes of this Section if: there is gross disparity between the price charged or offered and the price at which the same good or service was sold or offered for sale by the business in the usual course of business immediately prior to the onset of the declared statewide or national emergency, or the price at which the same or similar product is readily obtainable from other businesses; and the disparity is not substantially attributable to increased prices charged by the business’s suppliers or increased costs due to an abnormal market disruption.
Links Regarding Price Gouging
- Office of the Attorney General 940 CMR 3.18
- Amendment to 940 CMR 3.18
- Memo from the National SSA
- SSA Post: Rent Restrictions Remain
This is a reminder that while we are to practice social distancing and the current payment preference may be to only accept payments online or made with a credit or debit card, Massachusetts General Law Part III, Title IV, Chapter 255D, Section 10A states:
No retail establishment offering goods and services for sale shall discriminate against a cash buyer by requiring the use of credit by a buyer in order to purchase such goods and services. All such retail establishments must accept legal tender when offered as payment by the buyer.
You can request an alternative form of payment and try to work with a customer, but by law if they want to pay with cash, you must accept.
Massachusetts State Resources
- Massachusetts State website
- Department of Public Health website
- Office of the Attorney General
- Information on the Outbreak of Coronavirus Disease 2019 (COVID-19)
- COVID-19 Public Health Guidance and Directives
You can find guidelines to help run your facility whether your office closes or remains open on NeSSA’s earlier post, Your Facilities and COVID-19. Members can find additional resources including websites, webinars, articles, and notice/letter templates on our new COVID-19 Resources page (must be logged in to view).