Merc Pittinos, a real estate-focused litigation partner, recently spoke about why most landlords don’t want to evict tenants and the issues around tenant / landlord / lender relations with Harvard Kennedy School students Dwight Knell (MPP 2021) and (Pete Stein, MPP 2021) for their report, Commercial Evictions in Boston: a Roadmap for the Future, A Policy Analysis Exercise for the City of Boston Small Business Development Office.
This report was completed for the Small Business Development office within the Boston Mayor’s Office of Economic Development, the agency that provides all current and future small business owners with tools and guidance to successfully start, grow, and maintain a business in Boston. Over the past year, the office has played a central role in helping businesses survive during the COVID-19 pandemic
Merc Pittinos of Moye White LLP, said:
“Why is it that there haven’t been more evictions? It’s really because the focus of landlords has been to not lose tenants – they want to keep them there.”
“There really are three different components to how you fix the eviction issue. One part is the tenant issue, one part is the landlord issue, and then one part is the lender issue. So for example, the ‘late fee and interest’ issue: that’s one that the landlord has to bear. So it’s a benefit to the tenant, the burden then falls on the landlord, but there’s no corresponding program for the landlord’s relationship with the lender. So from a policy perspective, in order for tenants to have relief that has to come from the landlords. And for most landlords that have debt on a property, you have to involve all three groups to solve the problem.”
In short, lenders must be accounted for in the overall calculus.
“A lot of times during lease renegotiations, the process involves two different sides, it’s about both the tenant and the lender approving it,” Pittinos continued. “So the lenders don’t necessarily have to be flexible, but if there’s relief that’s provided in between the landlords and the lenders, that can help to provide relief to tenants. It’s lenders that are driving the decision-making. And that becomes really difficult for tenants to understand, because that’s not a relationship that they even know or care about. It feels difficult as a tenant when the person that you negotiate with on the ground says, ‘Actually, we can’t do that because it’s coming from a lender.'”
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