Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H2915 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 1527 FILED ON: 1/18/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 2915
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Sarah K. Peake
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act establishing a real property transfer fee in the town of Chatham.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Sarah K. Peake4th Barnstable1/11/2023 1 of 13
16	16	HOUSE DOCKET, NO. 1527 FILED ON: 1/18/2023
17	17	HOUSE . . . . . . . . . . . . . . . No. 2915
18	18	By Representative Peake of Provincetown, a petition (accompanied by bill, House, No. 2915) of
19	19	Sarah K. Peake (by vote of the town) that the town of Chatham be authorized to establish a real
20	20	property transfer fee in said town. Revenue. [Local Approval Received.]
21	21	[SIMILAR MATTER FILED IN PREVIOUS SESSION
22	22	SEE HOUSE, NO. 4060 OF 2021-2022.]
23	23	The Commonwealth of Massachusetts
24	24	_______________
25	25	In the One Hundred and Ninety-Third General Court
26	26	(2023-2024)
27	27	_______________
28	28	An Act establishing a real property transfer fee in the town of Chatham.
29	29	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
30	30	of the same, as follows:
31	31	1 SECTION 1. For purposes of this act, the words and phrases set forth in this section shall
32	32	2have the following meanings:
33	33	3 “Affordable housing” is defined for purposes of this Act as housing developments that
34	34	4meet the needs of households with incomes up to 100 per cent area median household income as
35	35	5most recently determined by the United States Department of Housing and Urban Development,
36	36	6adjusted for household size.
37	37	7 “Attainable housing” is defined for purposes of this Act as housing developments that
38	38	8meet the needs of households with incomes up to 200 per cent of the area median household 2 of 13
39	39	9income as most recently determined by the United State Department of Housing and Urban
40	40	10Development, adjusted for household size.
41	41	11 “Housing Fund” shall refer to any special purpose fund or funds authorized and
42	42	12established pursuant to the provisions of Chapter forty-four of the General Laws or any other
43	43	13general or special law for the purpose of creating and preserving affordable housing and/or
44	44	14attainable housing in the Town.
45	45	15 "Purchaser, shall refer to the transferee, grantee or recipient of any real property interest.
46	46	16 "Purchase price", all consideration paid or transferred by or on behalf of a purchaser to a
47	47	17seller or his nominee, or for his benefit, for the transfer of any real property interest, and shall
48	48	18include, but not be limited to, all cash or its equivalent so paid or transferred; all cash or other
49	49	19property paid or transferred by or on behalf of the purchaser to discharge or reduce any
50	50	20obligation of the seller; the principal amount of all notes or their equivalent, or other deferred
51	51	21payments, given or promised to be given by or on behalf of the purchaser to the seller or his
52	52	22nominee; the outstanding balance of all obligations of the seller which are assumed by the
53	53	23purchaser or to which the real property interest transferred remains subject after the transfer,
54	54	24determined at the time of transfer, but excluding real estate taxes and other municipal liens or
55	55	25assessments which are not overdue at the time of transfer; the fair market value, at the time of
56	56	26transfer, of any other consideration or thing of value paid or transferred by or on behalf of the
57	57	27purchaser, including, but not limited to, any property, goods or services paid, transferred or
58	58	28rendered in exchange for such real property interest.
59	59	29 "Real property interest", shall refer to any present or future legal or equitable interest in
60	60	30or to real property, and any beneficial interest therein, including the interest of any beneficiary in 3 of 13
61	61	31a trust which holds any legal or equitable interest in real property, the interest of a partner or
62	62	32member in a partnership or limited liability company, the interest of a stockholder in a
63	63	33corporation, the interest of a holder of an option to purchase real property, the interest of a buyer
64	64	34or seller under a contract for purchase and sale of real property, and the transferable development
65	65	35rights created under chapter 183A of the General Laws; but shall not include any interest which
66	66	36is limited to any of the following: the dominant estate in any easement or right of way; the right
67	67	37to enforce any restriction; any estate at will or at sufferance; any estate for years having a term of
68	68	38less than 30 years; any reversionary right, condition, or right of entry for condition broken; and
69	69	39the interest of a mortgagee or other secured party in any mortgage or security agreement.
70	70	40 "Seller", shall refer to the transferor, grantor or immediate former owner of any real
71	71	41property interest.
72	72	42 "Time of transfer" of any real property interest shall mean the time at which such transfer
73	73	43is legally effective as between the parties thereto, and, in any event, with respect to a transfer
74	74	44evidenced by an instrument recorded with the appropriate registry of deeds or filed with the
75	75	45assistant recorder of the appropriate registry district, not later than the time of such recording or
76	76	46filing.
77	77	47 “Town” shall refer to the Town of Chatham acting by and through its Select Board.
78	78	48 SECTION 2. There is hereby imposed a fee equal to one half per cent (1/2%) of the
79	79	49purchase price paid upon the transfer of any real property interest in any real property situated in
80	80	50the Town of Chatham for consideration of two million dollars ($2,000,000) or more. Said fee
81	81	51shall be the liability of the purchaser of such real property interest, and any agreement between
82	82	52the purchaser and the seller or any other person with reference to the allocation of the 4 of 13
83	83	53responsibility for bearing said fee shall not affect such liability of the purchaser. The fee shall be
84	84	54paid to the Town of Chatham, or its designee, and shall be accompanied by a copy of the deed or
85	85	55other instrument evidencing such transfer, if any, and an affidavit signed under oath or under the
86	86	56pains and penalties of perjury by the purchaser or his legal representative and the seller or his
87	87	57legal representative, attesting to the true and complete purchase price and the basis, if any, upon
88	88	58which the transfer is claimed to be exempt in whole or in part from the fee imposed hereby. The
89	89	59Town, or its designee, shall promptly thereafter execute and issue a certificate indicating that the
90	90	60appropriate fee has been paid or that the transfer is exempt from the fee, stating the basis for the
91	91	61exemption. The register of deeds for Barnstable County, and the assistant recorder for the
92	92	62registry district of Barnstable County, shall neither record nor register, or receive or accept for
93	93	63recording or registration, any deed, except a mortgage deed, to which has not been affixed such a
94	94	64certificate executed by the Town or its designee. Failure to comply with this requirement shall
95	95	65not affect the validity of any instrument. The Town shall deposit all fees received hereunder with
96	96	66the Town treasurer. The treasurer, upon consultation with and direction from the Town board or
97	97	67officer authorized to expend and make distributions from a Housing Fund, shall deposit such fees
98	98	68in the Housing Fund for the purpose of creating and preserving affordable and/or attainable
99	99	69housing in the Town. The fee imposed hereunder shall be due simultaneously with the time of
100	100	70the transfer upon which it is imposed. Notwithstanding the foregoing, whenever there is a
101	101	71conveyance of real property interests and a conveyance of personal property related thereto at or
102	102	72about the same time, the allocations of payments between real estate and personal property
103	103	73agreed to by the purchaser and seller shall not determine the amount of the fee due pursuant to
104	104	74this section; instead, the Town may require payment of the fee referred to in real property
105	105	75interests so conveyed as determined by the Town. 5 of 13
106	106	76 SECTION 3. At any time within seven days following the issuance of the certificate of
107	107	77payment of the fee imposed by section two, the purchaser or his legal representative may return
108	108	78said certificate to the Town or its designee for cancellation, together with an affidavit signed
109	109	79under oath or under the pains and penalties of perjury that the transfer, with respect to which
110	110	80such certificate was issued, has not been consummated, and thereupon the fee paid with respect
111	111	81to such transfer shall be forthwith returned to the purchaser or his legal representative.
112	112	82 SECTION 4. The following transfers of real property interests shall be exempt from the
113	113	83fee established by section two. Except as otherwise provided, the purchaser shall have the burden
114	114	84of proof that any transfer is exempt under this section and any otherwise exempt transfer shall
115	115	85not be exempt in the event that such transfer (by itself or as part of a series of transfers) was
116	116	86made for the primary purpose of evading the fee imposed by Section 6(b).
117	117	87 (a) Transfers to the government of the United States, the commonwealth, and any of their
118	118	88instrumentalities, agencies, or subdivisions, including but not limited to transfers to the Town of
119	119	89Chatham.
120	120	90 (b) Transfers which, without additional consideration, confirm, correct, modify, or
121	121	91supplement a transfer previously made.
122	122	92 (c) Transfers made as gifts without consideration. In any proceedings to determine the
123	123	93amount of any fee due hereunder, it shall be presumed that any transfer for consideration of less
124	124	94than fair market value of the real property interest transferred was made as a gift without
125	125	95consideration to the extent of the difference between the fair market value of the real property
126	126	96interest transferred and the amount of consideration claimed by the seller to have been paid or
127	127	97transferred, if the purchaser shall have been at the time of transfer the spouse, the lineal 6 of 13
128	128	98descendant, or the lineal ancestor of the seller, by blood or adoption, and otherwise it shall be
129	129	99presumed that consideration was paid in an amount equal to the fair market value of the real
130	130	100property interest transferred, at the time of transfer.
131	131	101 (d) Transfer to the trustees of a trust in exchange for a beneficial interest received by the
132	132	102purchaser in such trust; distributions by the trustees of a trust to the beneficiaries of such trust.
133	133	103 (e) Transfers by operation of law without actual consideration, including but not limited
134	134	104to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
135	135	105interest.
136	136	106 (f) Transfers made in partition of land and improvements thereto, under chapter two
137	137	107hundred and forty-one of the General Laws.
138	138	108 (g) Transfers to any charitable organization as defined in clause Third of section five of
139	139	109chapter fifty-nine of the General Laws, or any religious organization, provided that the real
140	140	110property interest so transferred will be held by the charitable or religious organization solely for
141	141	111its public charitable or religious purposes.
142	142	112 (h) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee, and
143	143	113transfers of the property subject to a mortgage to the mortgagee in consideration of the
144	144	114forbearance of the mortgagee from foreclosing said mortgage.
145	145	115 (i) Transfers made to a corporation or partnership or limited liability company at the time
146	146	116of its formation, pursuant to which transfer no gain or loss is recognized under the provisions of
147	147	117section three hundred and fifty-one or seven hundred and twenty-one of the Internal Revenue
148	148	118Code of 1986, as amended; provided, however, that such transfer shall be exempt only in the 7 of 13
149	149	119event that (1) with respect to a corporation, the transferor retains an interest in the newly formed
150	150	120corporation which is equivalent to the interest the transferor held prior to the transfer, or (2) with
151	151	121respect to a partnership or limited liability company, the transferor retains after such formation
152	152	122rights in capital interests and profit interests within such partnership or limited liability company
153	153	123which are equivalent to the interest the transferor held prior to the transfer.
154	154	124 (j) Transfers made to a stockholder of a corporation in liquidation or partial liquidation of
155	155	125the corporation, and transfers made to a partner of a partnership or to a member of a limited
156	156	126liability company in dissolution or partial dissolution of the partnership or limited liability
157	157	127company; but the transfer shall be exempt only if (i) with respect to a corporation, the transferee
158	158	128receives property (including real property interests and other property received) which is the
159	159	129same fraction of the total property of the transferor corporation as the fraction of the
160	160	130corporation's stock owned by the transferee prior to the transfer or (ii) with respect to a
161	161	131partnership or limited liability company, the transferee receives property (including real property
162	162	132interests and other property received) which is the same fraction of the property of the
163	163	133partnership or limited liability company as the fraction of the capital and profit interests in the
164	164	134transferor formerly owned by the transferee.
165	165	135 (k) Transfers consisting of the division of marital assets under the provisions of section
166	166	136thirty-four of chapter two hundred and eight of the General Laws or other provisions of law.
167	167	137 (l) Transfers of property consisting in part of real property interests situated in Chatham
168	168	138and in part of other property interests, to the extent that the property transferred consists of
169	169	139property other than real property situated in Chatham; provided that the purchaser shall furnish 8 of 13
170	170	140the Town with such information as it shall require or request in support of the claim of
171	171	141exemption and manner of allocation of the consideration for such transfers.
172	172	142 (m) Transfers of minority interests in corporations, trusts, partnerships, or limited liability
173	173	143companies which are publicly traded, which trades are not part of a series of transfers which
174	174	144together constitute a transfer of control of a corporation, trust, partnership, or limited liability
175	175	145company.
176	176	146 (n) Intra-family transfers of property between parties of the following relationships: (1)
177	177	147between current spouses; (2) between parents and their children or stepchildren; (3) between full
178	178	148siblings; and (4) where the grantor transfers the real property to be held in a revocable or
179	179	149irrevocable trust, where at least one of the designated beneficiaries is a parent, full sibling, child,
180	180	150or stepchild of the grantor.
181	181	151 SECTION 5. (a) The Town treasurer shall keep a full and accurate account stating when,
182	182	152from or to whom, and on what account money has been paid or received relative to the activities
183	183	153of the Housing Fund. Said account(s) shall be subject to examination by the director of accounts
184	184	154or his/her agent pursuant to section forty-four of chapter thirty-five of the General Laws.
185	185	155 (b) Schedules of beneficiaries of trusts, list of stockholders of corporations and lists of
186	186	156partnerships filed with the Town for the purpose of determining or fixing the amount of the fee
187	187	157imposed under section two or for the purpose of determining the existence of any exemption
188	188	158under section four shall not be public records for the purposes of section ten of chapter sixty-six
189	189	159of the General Laws. 9 of 13
190	190	160 SECTION 6. A purchaser who fails to pay all or any portion of the fee established by
191	191	161section two on or before the time when the same is due shall be liable for the following
192	192	162additional payments in addition to said fee:
193	193	163 (a) Interest: The purchaser shall pay interest on the unpaid amount of the fee to be
194	194	164calculated from the time of transfer at a rate equal to fourteen per cent per annum.
195	195	165 (b) Penalties: Any person who, without fraud or willful intent to defeat or evade a fee
196	196	166imposed by this chapter, fails to pay all or a portion of the fee within thirty days after the time of
197	197	167transfer, shall pay a penalty equal to five per cent of the outstanding fee as determined by the
198	198	168Town for each month or portion thereof thereafter that the fee is not paid in full; provided,
199	199	169however, that in no event shall the amount of any penalty imposed hereunder exceed twenty five
200	200	170per cent of the unpaid fee due at the time of transfer. Whenever the Town determines that all or a
201	201	171portion of a fee due under this chapter was unpaid due to fraud with intent to defeat or evade the
202	202	172fee imposed by this chapter, a penalty equal to the full amount of said fee as determined by the
203	203	173Town shall be paid by the seller in addition to said fee.
204	204	174 SECTION 7. (a) The Town Clerk shall notify the purchaser and the seller by registered or
205	205	175certified mail of any failure to discharge in full the amount of the fee due under this Act and any
206	206	176penalty or interest assessed. The Town shall grant a hearing before the Select Board on the
207	207	177matter of the imposition of said fee, or of any penalty or interest assessed, if a petition requesting
208	208	178such hearing is received by the Town Clerk within thirty days after the mailing of said notice.
209	209	179The Select Board shall notify the purchaser and the seller in writing by registered or certified
210	210	180mail of its determination concerning the deficiency, penalty, or interest within fifteen days after
211	211	181said hearing. Any party aggrieved by a determination of the Select Board concerning a 10 of 13
212	212	182deficiency, penalty or interest may, after payment of said deficiency, appeal to the district or
213	213	183superior court within three months after the mailing of notification of the determination of the
214	214	184Select Board. Upon the failure to timely petition for a hearing, or appeal to said courts, within the
215	215	185time limits hereby established, the purchaser and seller shall be bound by the terms of the
216	216	186notification, assessment, or determination, as the case may be, and shall be barred from
217	217	187contesting the fee, and any interest and penalty, as determined by the Town. Every notice to be
218	218	188given under this section by the Town shall be effective if mailed by certified or registered mail to
219	219	189the purchaser or the seller at the address stated in a recorded or registered instrument by virtue of
220	220	190which the purchaser holds any interest in real property, the transfer of which gives rise to the fee
221	221	191which is the subject of such notice; and if no such address is stated or if such transfer is not
222	222	192evidenced by an instrument recorded or registered in the public records in Barnstable County,
223	223	193such notice shall be effective when so mailed to the purchaser or seller in care of any person
224	224	194appearing of record to have a fee interest in such land, at the address of such person as set forth
225	225	195in an instrument recorded or registered in Barnstable County.
226	226	196 (b) All fees, penalties and interest required to be paid pursuant to this chapter shall
227	227	197constitute a personal debt of the purchaser and may be recovered in an action of contract or in
228	228	198any other appropriate action, suit or proceeding brought by the Town; said action, suit or
229	229	199proceeding shall be subject to the provisions of chapter two hundred and sixty of the General
230	230	200Laws.
231	231	201 (c) If any purchaser liable to pay the fee established by this act neglects or refuses to pay
232	232	202the same, the amount, including any interest and penalty thereon, shall be a lien in favor of the
233	233	203Town upon all property and rights to property, whether real or personal, belonging to such
234	234	204purchaser. Said lien shall arise at the time of transfer and shall continue until the liability for such 11 of 13
235	235	205amount is satisfied. Said lien shall in any event terminate not later than six years following the
236	236	206time of transfer. Said lien shall not be valid as against any mortgagee, pledgee, purchaser or
237	237	207judgment creditor unless notice thereof has been filed by the Town (i) with respect to real
238	238	208property or fixtures, in the registry of deeds for Barnstable County, or (ii) with respect to
239	239	209personal property, in the office in which a security or financing statement or notice with respect
240	240	210to the property would be filed in order to perfect a nonpossessory security interest belonging to
241	241	211the person named in the relevant notice, subject to the same limitations as set forth in section
242	242	212fifty of chapter sixty two C of the General Laws.
243	243	213 (d) Purchasers or sellers applying for an exemption under subsections (a) through (n) of
244	244	214section four shall be required at the time of application for exemption to execute an agreement
245	245	215legally binding on the applicant: (1) assuming complete liability for any fee, plus interest and
246	246	216penalties if any, waived on account of an allowed exemption subsequently determined to have
247	247	217been invalid, and (2) submitting to the jurisdiction of the trial court of the commonwealth sitting
248	248	218in Barnstable County. Fees, plus interest and penalties if any, shall be calculated as of the date of
249	249	219the initial property transfer. Execution of the above-described agreement shall not be required of
250	250	220any mortgagee, pledge, purchaser, or judgment creditor unless notice of the agreement has been
251	251	221recorded or filed by the Town.
252	252	222 In any case where there has been a refusal or neglect to pay any fee, interest or penalties
253	253	223imposed by this act, whether or not levy has been made, the Town, in addition to other modes of
254	254	224relief, may file a civil action in a district or superior court of Barnstable County to enforce the
255	255	225lien of the Town under this section with respect to such liability or to subject any property of
256	256	226whatever nature, of the delinquent, or in which he has any right, title or interest, to the payment
257	257	227of such liability. 12 of 13
258	258	228 The Town may issue a waiver or release of any lien imposed by this section. Such waiver
259	259	229or release shall be conclusive evidence that the lien upon the property covered by the waiver or
260	260	230release is extinguished.
261	261	231 SECTION 8. The fee described by Section two shall be of ten-year duration from the date
262	262	232this legislation takes effect. This fee may continue for additional five-year periods upon a
263	263	233majority vote at Town Meeting reauthorizing the fee. The fee described by Section two 1) may
264	264	234be decreased or increased, 2) the threshold transfer consideration amount may be revised, or 3)
265	265	235the fee may be eliminated by a two-thirds vote of Town Meeting. In the event that Town Meeting
266	266	236does not renew the fee at the ten-year anniversary, or any subsequent five year anniversary, or
267	267	237Town Meeting votes to eliminate the fee, the balance of any fees previously collected shall be
268	268	238used to satisfy any outstanding liabilities or obligations incurred by the Town of Chatham or the
269	269	239Housing Fund as a result of imposition of the fee, and the remainder may be expended without
270	270	240further appropriation at the direction of the Select Board for affordable or attainable housing
271	271	241purposes. In the event that the liabilities and obligations of the Town of Chatham or the Housing
272	272	242Fund exceed the amounts transferred to the Town, the fee shall remain in full force and effect
273	273	243until such liabilities and obligations have been satisfied.
274	274	244 SECTION 9. The provisions of this act are severable, and if any provision hereof,
275	275	245including without limitation any exemption from the fee imposed hereby, shall be held invalid in
276	276	246any circumstances such invalidity shall not affect any other provisions or circumstances. This act
277	277	247shall be construed in all respects so as to meet all constitutional requirements. In carrying out the
278	278	248purposes and provisions of this act, all steps shall be taken which are necessary to meet
279	279	249constitutional requirements whether or not such steps are required by statute. 13 of 13
280	280	250 SECTION 10. If the Town has determined that a fee is due by asserting the application of
281	281	251the evasion of fee doctrine described in Section six (b), then the purchaser shall have the burden
282	282	252of demonstrating by clear and convincing evidence as determined by the Town that the transfer,
283	283	253or series of transfers, possessed both: (i) a valid, good faith business purpose other than
284	284	254avoidance of the fee set forth in Section two and (ii) economic substance apart from the asserted
285	285	255fee avoidance benefit. In all such cases, the purchaser shall also have the burden of
286	286	256demonstrating by clear and convincing evidence as determined by the Town that the asserted
287	287	257non-fee-avoidance business purpose is commensurate with the amount of the fee pursuant to
288	288	258Section two to be thereby avoided.
289	289	259 SECTION 11. This act shall take effect ninety (90) days following the date of passage.