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Massachusetts Senate Bill S1771

Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S1771 Compare Versions

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22 SENATE DOCKET, NO. 1982 FILED ON: 1/20/2023
33 SENATE . . . . . . . . . . . . . . No. 1771
44 The Commonwealth of Massachusetts
55 _________________
66 PRESENTED BY:
77 Joanne M. Comerford
88 _________________
99 To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
1010 Court assembled:
1111 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
1212 An Act granting a local option for a real estate transfer fee to fund affordable housing.
1313 _______________
1414 PETITION OF:
1515 NAME:DISTRICT/ADDRESS :Joanne M. ComerfordHampshire, Franklin and WorcesterPatricia D. JehlenSecond Middlesex1/30/2023Sal N. DiDomenicoMiddlesex and Suffolk1/31/2023Michael J. BarrettThird Middlesex2/2/2023Jason M. LewisFifth MiddlesexMike Connolly26th Middlesex2/6/2023James B. EldridgeMiddlesex and Worcester2/10/2023Susannah M. Whipps2nd Franklin2/15/2023Jack Patrick Lewis7th Middlesex2/15/2023Julian CyrCape and Islands2/22/2023Adam GomezHampden2/28/2023Cindy F. FriedmanFourth Middlesex3/6/2023Michael D. BradySecond Plymouth and Norfolk3/9/2023 1 of 12
1616 SENATE DOCKET, NO. 1982 FILED ON: 1/20/2023
1717 SENATE . . . . . . . . . . . . . . No. 1771
1818 By Ms. Comerford, a petition (accompanied by bill, Senate, No. 1771) of Joanne M. Comerford,
1919 Patricia D. Jehlen, Sal N. DiDomenico, Michael J. Barrett and other members of the General
2020 Court for legislation to grant a local option for a real estate transfer fee to fund affordable
2121 housing. Revenue.
2222 The Commonwealth of Massachusetts
2323 _______________
2424 In the One Hundred and Ninety-Third General Court
2525 (2023-2024)
2626 _______________
2727 An Act granting a local option for a real estate transfer fee to fund affordable housing.
2828 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
2929 of the same, as follows:
3030 1 SECTION 1. Subsection (c) of section 55C of chapter 44 of the General Laws, as
3131 2appearing in the 2020 Official Edition, is hereby amended by inserting after the figure “44B”, in
3232 3line 8, the following words:- and section 55D.  
3333 4 SECTION 2. Said section 55C of said chapter 44, as so appearing is hereby further
3434 5amended by inserting after the word “revenue”, in line 45, the following words:- provided
3535 6further, that any such money received from section 55D shall be used exclusively for adaptive
3636 7reuse, production or preservation of affordable housing or affordable housing purposes as that
3737 8term is defined in section 55D. 
3838 9 SECTION 3. Subsection (d) of said section 55C of said chapter 44, as so appearing, is
3939 10hereby further amended by inserting after the word “fee”, in line 99, the following words:- ,
4040 11transfer fee.  2 of 12
4141 12 SECTION 4. Chapter 44 of the General Laws is hereby amended by inserting after
4242 13section 55C the following section:-  
4343 14 Section 55D. (a) For purposes of this section, the following terms shall, unless the
4444 15context clearly requires otherwise, have the following meanings:
4545 16 “Affidavit of transfer fee”, an affidavit signed under the pains and penalties of perjury by
4646 17the settlement agent that attests to (a) the true and complete purchase or sale price of the transfer
4747 18of the real property interest; (b) the amount of the fee owed or the basis, if any, upon which the
4848 19transfer is exempt from the fee imposed by said transfer; (c) the amount that the purchaser and
4949 20seller are responsible for paying as required by the bylaw, ordinance or regulation allocating the
5050 21transfer fee in accordance with this section; and (d) the obligation of the settlement agent to
5151 22make payment of the transfer fee to the city, town or regional affordable housing commission.
5252 23 “Affordable housing purposes”, uses allowed by the municipal affordable housing trust
5353 24fund or regional affordable housing commission fund into which funds are deposited hereunder.
5454 25 “Affordable housing restriction", a recorded instrument held by a qualified holder which
5555 26encumbers or restricts a real property interest so that the real property interest is perpetually
5656 27or for a term of at least 30 years limited to use as a residence occupied by a low or moderate
5757 28income household with Area Median Income, as defined by the federal department of Housing
5858 29and Urban Development, not to exceed the income limits to which the Municipal Affordable
5959 30Housing Trust Fund or Regional Affordable Housing Commission is subject. A “qualified
6060 31holder” is a governmental body or charitable corporation or trust which qualifies under the terms
6161 32of chapter 184 to hold an affordable housing restriction.   3 of 12
6262 33 “Member cities and towns”, cities or towns that are members of a regional affordable
6363 34housing commission.
6464 35 “Municipal affordable housing trust fund”, a municipal affordable housing trust fund
6565 36established pursuant to section 55C, or any other municipal trust fund established pursuant to a
6666 37law of the commonwealth providing for the creation and preservation of affordable housing in a
6767 38particular city or town.
6868 39 "Purchaser", the transferee, grantee, or recipient of any real property interest.  
6969 40 "Purchase price" or “sale price,” all consideration paid or transferred by or on behalf of a
7070 41purchaser to a seller or the seller’s nominee, or for the seller’s benefit, for the transfer of any
7171 42real property interest, and shall include, but not be limited to: (i) all cash or its equivalent so paid
7272 43or transferred; (ii) all cash or other property paid or transferred by or on behalf of the purchaser
7373 44to discharge or reduce any obligation of the seller; (iii) the principal amount of all notes or their
7474 45equivalent, or other deferred payments, given or promised to be given by or on behalf of the
7575 46purchaser to the seller or the seller’s nominee; (iv) the outstanding balance of all obligations of
7676 47the seller which are assumed by the purchaser or to which the real property interest transferred
7777 48remains subject after the transfer, determined at the time of transfer, but excluding real
7878 49estate taxes and other municipal liens or assessments which are not overdue at the time of
7979 50transfer; (v) the fair market value, at the time of transfer, of any other consideration or thing of
8080 51value paid or transferred by or on behalf of the purchaser, including, but not limited to, any
8181 52property, goods or services paid, transferred or rendered in exchange for such real property
8282 53interest.   4 of 12
8383 54 "Real property interest", any present or future legal or equitable interest in or to real
8484 55property, and any beneficial interest therein, including the interest of any beneficiary in a trust
8585 56which holds any legal or equitable interest in real property, the interest of a partner or member
8686 57in a partnership or limited liability company, the interest of a stockholder in a corporation,
8787 58the interest of a holder of an option to purchase real property, the interest of a purchaser or
8888 59seller under a contract for purchase and sale of real property, and the transferable development
8989 60rights created under chapter 183A; but shall not include any interest which is limited to any of
9090 61the following: the dominant estate in any easement or right of way; the right to enforce
9191 62any restriction; any estate at will or at sufferance; any estate for years having a term of less than
9292 6330 years; any reversionary right, condition, or right of entry for condition broken; and the interest
9393 64of  a mortgagee or other secured party in any mortgage or security agreement.  
9494 65 “Regional affordable housing commission”, a regional trust, bank, board or like entity
9595 66created pursuant to general or special law for the creation and preservation of affordable housing
9696 67as described in the general or special law establishing such entity, and whose membership
9797 68includes two or more cities or towns. If a city or town is a member of a regional affordable
9898 69housing commission, any authority granted to a city, town, or regional affordable housing
9999 70commission pursuant to this section shall be exercised solely by the regional affordable housing
100100 71commission.
101101 72 “Regional affordable housing commission fund” a fund established by general or special
102102 73law for the use of a regional affordable housing commission for the creation and preservation of
103103 74affordable housing as defined in the general or special law establishing such fund.
104104 75 "Seller", the transferor, grantor, or immediate former owner of any real property interest.  5 of 12
105105 76 “Settlement Agent”, an escrow agent, real estate attorney, or representative of a lender or
106106 77title company that conducts the closing or settlement of the sale or transfer of a real property
107107 78interest including the coordination of the attendance and document signing for all the parties,
108108 79verification that each party to the transfer has performed their required responsibilities as
109109 80outlined in the contract and the disbursement of all funds, along with the title and deed, to the
110110 81appropriate parties after checking that all conditions are met at the close of the transfer
111111 82transaction.
112112 83 "Time of transfer", of any real property interest, shall mean the time at which such
113113 84transfer is legally effective as between the parties thereto, and, in any event, with respect to a
114114 85transfer evidenced by an instrument recorded with the appropriate registry of deeds or filed with
115115 86the assistant recorder of the appropriate registry district, not later than the time of such recording
116116 87or filing.  
117117 88 (b) A city or town that has established a municipal affordable housing trust fund pursuant
118118 89to section 55C or any other municipal affordable housing trust fund established by a law of the
119119 90commonwealth providing for the creation and preservation of affordable housing in
120120 91municipalities for the benefit of low and moderate income households or for the funding of
121121 92community housing, as defined in and in accordance with chapter 44B, or a regional affordable
122122 93housing commission, as applicable, may impose a fee upon the transfer of any real property
123123 94interest in any real property situated in the city or town, or member cities and towns, as described
124124 95and as subject to conditions and exemptions described herein.  
125125 96 (i) A city, town, or regional affordable housing commission, as applicable, may establish
126126 97different transfer fees for categories of properties, defined by the tax classification and the value 6 of 12
127127 98of a property; provided, however, that the fee shall be no less than .5 per cent and no more than 2
128128 99per cent of the purchase price of such real property interest.
129129 100 (ii) The city or town or regional affordable housing commission, as applicable, shall have
130130 101the authority to designate whether the transfer fee shall be borne by the purchaser, the seller or
131131 102how it will be allocated between the two. 
132132 103 (iii) A purchaser, seller, or settlement agent in advance of the time of transfer shall
133133 104request and the city or town or regional affordable housing commission, as applicable, shall
134134 105provide to a purchaser, seller or settlement agent in advance of the time of transfer a certificate
135135 106indicating the dollar amount of the transfer fee owed based on the agreed upon purchase price as
136136 107evidenced by an executed purchase and sale agreement, contract for sale or other document
137137 108evidencing the agreed upon purchase price or that the transfer is exempt from the transfer fee,
138138 109stating the basis for the exemption.  
139139 110 (iv) Whenever the transfer of a real property interest will occur at or about the same time
140140 111as a conveyance of personalty related thereto, the allocations of payments between real estate
141141 112and personalty agreed to by the purchaser and seller shall not determine the calculation of the
142142 113transfer fee due pursuant to this section; instead, the calculation of the fee with respect to such
143143 114transfer shall be determined by the city, town, or regional affordable housing commission, as
144144 115applicable.
145145 116 (v) The transfer fee shall be paid within 7 days of the time of transfer by the settlement
146146 117agent to the city or town, or its designee, or to the regional affordable housing commission or its
147147 118designee, as applicable, and shall be accompanied by a copy of the deed or other instrument
148148 119recorded or registered with the registry of deeds for the county in which the real property interest 7 of 12
149149 120is located, or the assistant recorder for the registry district of the county in which the real
150150 121property interest is located, and a copy of the affidavit of transfer fee. The city or town, or its
151151 122designee, or the regional affordable housing commission, or its designee, as applicable, shall
152152 123promptly thereafter execute and issue a certificate indicating that the appropriate fee has been
153153 124paid.
154154 125 (vi) Upon receipt of a transfer fee by a city or town, the treasurer of the city or town shall
155155 126deposit the transfer fee in the city or town’s municipal affordable housing trust fund established
156156 127pursuant to section 55C or any other municipal affordable housing trust fund established by a
157157 128law of the commonwealth providing for the creation and preservation of affordable housing in
158158 129municipalities for the benefit of low and moderate income households or for the funding of
159159 130community housing, as defined in and in accordance with chapter 44B. Upon receipt of a transfer
160160 131fee by a regional affordable housing commission, the regional affordable housing commission
161161 132shall deposit the transfer fee into the regional affordable housing commission fund.
162162 133 (c) The following transfers of real property interests shall be exempt from the fees
163163 134established by this section; provided, however, that any city, town or regional affordable housing
164164 135commission, as applicable, may adopt further exemptions in addition to those provided herein;
165165 136provided, further, that except as otherwise required, the seller or purchaser or both parties, who
166166 137are required to pay the transfer fee as specified in the bylaw or ordinance establishing a transfer
167167 138fee pursuant to this section, or, with respect to the member cities and towns of a regional
168168 139affordable housing commission, regulations adopted by such regional affordable housing
169169 140commission, shall have the burden of proving that any transfer is exempt; and provided, further,
170170 141that any otherwise exempt transfer shall not be exempt in the event that such transfer, by itself or 8 of 12
171171 142as part of a series of transfers, was made for the primary purpose of evading the fee established
172172 143pursuant to this section.  
173173 144 (i) Transfers for less than $1,000,000 or such higher threshold amount as set by the
174174 145municipality or regional affordable housing commission adopting a transfer fee pursuant to this
175175 146legislation except to the extent that the median single family sale price for the county in which
176176 147the municipality resides is less than $750,000 may adopt a threshold no lower than 100 per cent
177177 148of the median single family home sales price for that county. County median sales price for a
178178 149single family home which shall be determined annually by April 1st of each calendar year by the
179179 150department of housing and community development shall be exempt in their entirety; provided,
180180 151however, that the amount of this threshold for imposing a transfer fee may be increased by the
181181 152bylaw or ordinance establishing a transfer fee pursuant to this section or, with respect to the
182182 153member cities and towns of a regional affordable housing commission, a regulation adopted by
183183 154the regional affordable housing commission;
184184 155 (ii) Transfers made as gifts with consideration less than $100; provided, however, that in
185185 156any proceedings to determine the amount of any fee due hereunder, it shall be presumed that any
186186 157transfer for consideration of less than fair market value of the real property interest transferred
187187 158was made as a gift without consideration to the extent of the difference between the fair market
188188 159value of the real property interest transferred and the amount of consideration claimed by the
189189 160purchaser to have been paid or transferred, if the seller shall have been at the time of transfer the
190190 161spouse, the lineal descendant, or the lineal ancestor of the purchaser, by blood or adoption, and
191191 162otherwise it shall be presumed that consideration was paid in an amount equal to the fair market
192192 163value of the real property interest transferred, at the time of transfer;   9 of 12
193193 164 (iii) Transfers to the government of the United States, the Commonwealth and any of
194194 165their instrumentalities, agencies or subdivisions, including but not limited to transfers to the city,
195195 166town, or regional housing commission, to the extent that the city, town or regional affordable
196196 167housing commission has designated that the transfer fee shall be borne by the purchaser;
197197 168 (iv) Transfers from the government of the United States, the Commonwealth and any of
198198 169their instrumentalities, agencies, or subdivisions, including but not limited to transfers from the
199199 170city, town or regional affordable housing commission, to the extent that the city, town or regional
200200 171affordable housing commission has designated that the transfer fee shall be borne by the seller;
201201 172 (v) Distributions by the trustees of a trust to the beneficiaries of such trust;
202202 173 (vi) Transfers to the trustees of a trust in exchange for a beneficial interest received by the
203203 174seller in such trust;
204204 175 (vii) Transfers between family members as defined by bylaw or ordinance or regulations
205205 176adopted by a regional affordable housing commission;
206206 177 (viii) Transfers to first-time homebuyers as defined by bylaw, ordinance or regulations
207207 178adopted by a municipality or regional affordable housing commission;  provided, that said first-
208208 179time homebuyer must be a natural person; and provided further, that for real property sold for a
209209 180value that exceeds the median single family home price in the county where the transaction
210210 181occurs, the exemption shall only apply to the value equal to the median single family home price
211211 182in said county; provided that any municipality or region may elect to increase said exemption.
212212 183 (ix) Transfers which, without additional consideration, confirm, correct, modify, or
213213 184supplement a transfer previously made;   10 of 12
214214 185 (x) Transfers by operation of law without actual consideration, including but not limited
215215 186to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
216216 187interest;  
217217 188 (xi) Transfers made in partition of land and improvements thereto, under chapter 241;  
218218 189 (xii) Transfers to any charitable organization, as defined in clause Third of section 5 of
219219 190chapter 59, or any religious organization; provided, however, that the real property interest so
220220 191transferred will be held by the charitable or religious organization solely for affordable housing-
221221 192related uses that are consistent with the uses allowed by the regional affordable housing
222222 193commission fund, if one exists, or the municipality’s affordable housing trust fund; and provided,
223223 194further, that such uses must be available to the general public;  
224224 195 (xiii) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee,
225225 196and transfers of the property subject to a mortgage to the mortgagee in consideration of the
226226 197forbearance of the mortgagee from foreclosing said mortgage;  
227227 198 (xiv) Transfers consisting of the division of marital assets under the provisions of section
228228 19934 of chapter 208 or other provisions of law; and  
229229 200 (xv) Transfers of a real property interest that include 1 or more residential units governed
230230 201by affordable housing restrictions; provided, however, that the fee imposed under the provisions
231231 202of this section shall be proportionately reduced based on the assessed value of residential units
232232 203subject to affordable housing restrictions as compared to the total assessed value of the property,
233233 204or the percentage of residential units subject to affordable housing restrictions, as compared to
234234 205the total number of units located on that property, or such other method as may be required by
235235 206the bylaw, ordinance, warrant article or other local law establishing a transfer fee pursuant to this 11 of 12
236236 207section or, with respect to member cities and towns of a regional affordable housing omission, a
237237 208regulation adopted by the regional affordable housing commission.
238238 209 (d) The city or town’s treasurer shall keep a full and accurate account stating when, from
239239 210or to whom, and on what account money has been paid or received relative to the activities of the
240240 211municipal affordable housing trust fund.  With respect to a regional affordable housing
241241 212commission, the regional affordable housing commission’s treasurer or such other person as may
242242 213be designated in the law establishing the regional affordable housing commission, shall keep a
243243 214full and accurate account stating when, from or to whom, and on what account money has been
244244 215paid or received relating to the regional affordable housing commission fund.
245245 216 (e) (i) The adoption of any non-mandatory exemptions shall be determined by a majority
246246 217vote by the city or town’s legislative body or, with respect to a regional affordable housing
247247 218commission, by the terms of or in accordance with the procedures established by the general or
248248 219special law creating such commission.  
249249 220 (ii) A city or town that establishes a transfer fee pursuant to this section, or a regional
250250 221affordable housing commission that receives funds hereunder may provide for the collection and
251251 222liening of any outstanding transfer fee. Such city, town or regional affordable housing
252252 223commission shall have the same remedies to collect said amount as provided by law with respect
253253 224to the collection of real property taxes.  
254254 225 (iii) A city or town enacting a real estate transfer fee pursuant to this section, or a regional
255255 226affordable housing commission that receives funds hereunder, is authorized to issue rules,
256256 227policies, and procedures to effectuate its terms.   12 of 12
257257 228 (iv) A city or town that adopts this section, or a regional affordable housing commission
258258 229that receives funds hereunder shall provide to the Regional Planning Office publicly available
259259 230reports on the total fees collected and disbursed in accordance with this section.