1 of 1
HOUSE DOCKET, NO. 1901 FILED ON: 1/15/2025
HOUSE . . . . . . . . . . . . . . . No. 3040
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Daniel Cahill
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relating to improvements to residential properties.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Daniel Cahill10th Essex1/15/2025 1 of 17
HOUSE DOCKET, NO. 1901 FILED ON: 1/15/2025
HOUSE . . . . . . . . . . . . . . . No. 3040
By Representative Cahill of Lynn, a petition (accompanied by bill, House, No. 3040) of Daniel
Cahill relative to the financing of qualifying improvements to residential property. Revenue.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act relating to improvements to residential properties.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. The General Laws are hereby amended by inserting after chapter 80A
2the following chapter:-
3 Chapter 80B
4 Section 1. As used in this chapter, the following words shall, unless the context clearly
5requires otherwise, have the following meanings:-
6 “Benefitted property owner”, an owner of qualifying residential property who desires to
7install qualifying improvements and who provides free and willing consent to the betterment
8assessment against the qualifying residential property.
9 “Betterment Assessment”, an assessment of a betterment on qualified residential
10property in relation to qualifying improvements that have been duly assessed in accordance with
11chapter 80. 2 of 17
12 “Municipality”, a city, town, or county.
13 “Participating municipality”, a municipality that has determined to participate in a
14program for financing qualifying improvements to residential property.
15 “Program administrator”, means a municipality or a separate legal entity created
16pursuant to the provisions of this legislation that directly operates a program for financing
17qualifying improvements and is authorized pursuant to the provisions of this legislation.
18 “Property owner”, means the owner or owners of record of real property. The term
19includes real property held in trust for the benefit of one or more individuals, in which case the
20individual or individuals may be considered as the property owner or owners, provided that the
21trustee provides written consent. The term does not include persons renting, using, living in, or
22otherwise occupying real property.
23 “Qualifying improvement”, shall include, but shall not be limited to, the following
24permanent improvements located on residential property: : (i) repairing, replacing, or improving
25a central sewerage system, converting an onsite sewage treatment and disposal system to a
26central sewerage system, or, if no central sewerage system is available, removing, repairing,
27replacing, or improving an onsite sewage treatment and disposal system to an advanced system
28or technology; (ii) repairing, replacing, or improving a roof, including improvements that
29strengthen the roof deck attachment; create a secondary water barrier to prevent water intrusion;
30install wind-resistant shingles or gable-end bracing; or reinforce roof-to-wall connections; (iii)
31providing flood and water damage mitigation and resiliency improvements, prioritizing repairs,
32replacement, or improvements that qualify for reductions in flood insurance premiums, including
33raising a structure above the base flood elevation to reduce flood damage; constructing a flood 3 of 17
34diversion apparatus, drainage gate, or seawall improvement, including seawall repairs and
35seawall replacements; purchasing flood damage-resistant building materials; or making
36electrical, mechanical, plumbing, or other system improvements that reduce flood damage;
37(iv)replacing windows or doors, including garage doors, with energy-efficient, impact-resistant,
38wind-resistant, or hurricane windows or doors or installing storm shutters (v) installing energy-
39efficient heating, cooling, or ventilation systems; (vi) replacing or installing insulation; (vii)
40replacing or installing energy-efficient water heaters: (viii) installing and affixing a permanent
41generator; (ix) providing a renewable energy improvement, including the installation of any
42system in which the electrical, mechanical, or thermal energy is produced from a method that
43uses solar, geothermal, bioenergy, wind, or hydrogen; (x) energy conservation and efficiency
44improvements, which are measures to reduce consumption through efficient use or conservation
45of electricity, natural gas, propane, or other forms of energy, including but not limited to, air
46sealing; installation of insulation; installation of energy-efficient heating, cooling, or ventilation
47systems; building modification to increase the use of daylight; window replacement; windows;
48energy controls or energy recovery systems; installation of electric vehicle charging equipment;
49installation of efficient lighting equipment; or any other improvements necessary to achieve a
50sustainable building rating or compliance with a national model green building code; and (xi)
51water conservation efficiency improvements, which are measures to reduce consumption through
52efficient use or conservation of water.
53 “Qualifying improvement contractor”, means a licensed or registered contractor who has
54been registered to participate by a program administrator pursuant to the provisions of this
55legislation to install or otherwise perform work to make qualifying improvements on residential
56property financed pursuant to a program authorized pursuant to the provisions of this legislation. 4 of 17
57 “Residential property”, means real property zoned as residential or multifamily
58residential and composed of four or fewer dwelling units.
59 “Third-party administrator”, means an entity under contract with a program
60administrator.
61 Section 2. (a) (1) Each municipality in the commonwealth shall have the option to
62participate in the program for financing qualifying improvements to residential property as a
63participating municipality by a majority vote of the city or town council, by a majority vote of
64the board of selectmen or by resolution of its legislative body, as may be appropriate, pursuant to
65which the municipality shall assess, collect, remit and assign betterment assessments, in return
66for qualifying improvements for a benefitted property owner located within such municipality
67and for costs reasonably incurred in performing such acts.
68 (2) A program administrator may only offer a program for financing qualifying
69improvements to residential property within the jurisdiction of a municipality if the municipality
70has authorized the program administrator to administer the program for financing qualifying
71improvements to residential property by a majority vote of the city or town council, by a
72majority vote of the board of selectmen or by resolution of its legislative body, as may be
73appropriate. The authorized program must, at a minimum, meet the requirements of this section.
74 (3) Pursuant to this section or as otherwise provided by law, a municipality may enter
75into an interlocal agreement providing for a partnership between one or more municipalities for
76the purpose of facilitating a program to finance qualifying improvements to residential property
77located within the jurisdiction of the municipalities that are party to the agreement. 5 of 17
78 (4) A municipality may deauthorize a program administrator through repeal of the vote
79or the resolution adopted pursuant to paragraph (b) or other action. Any recorded financing
80agreements at the time of deauthorization shall continue, except as otherwise provided herein.
81 (5) An authorized program administrator may contract with one or more third-party
82administrators to implement the program as provided herein.
83 (6) An authorized program administrator may levy betterment assessments to facilitate
84repayment of financing qualifying improvements. Costs incurred by the program administrator
85for such purpose may be collected as a betterment assessment.
86 (7) In accordance with Chapter 80, betterment assessments levied pursuant to this section
87and the interest, fees and any penalties thereon shall constitute a lien against the qualifying
88residential property until they are paid, notwithstanding the provisions of section 12 of chapter
8980, and shall continue notwithstanding any alienation or conveyance of the qualifying residential
90property by one property owner to a new property owner. Betterment assessments have fixed
91interest rates based on market conditions and those rates are not capped by statutes or regulations
92intended to cover the interest rates of unsecured, credit-based finance options, neither are they
93limited by restrictions on other betterment financings. A new property owner shall take title to
94the qualifying residential property subject to the betterment assessment and related lien. The lien
95shall be levied and collected in the same manner as the property taxes of the participating
96municipality on real property, including, in the event of default or delinquency, with respect to
97any penalties, fees and lien priorities. Each lien may be continued, recorded and released upon
98repayment in full of the betterment assessment in the manner provided for property tax liens.
99Each lien shall take precedence over all other liens or encumbrances, except a lien for taxes of 6 of 17
100the municipality on real property. If a lien for property taxes of the municipality is foreclosed,
101the betterment assessment lien shall be extinguished solely with regard to any installments that
102were due and owing on the date of foreclosure of such tax lien, but the betterment assessment
103lien shall otherwise survive the foreclosure. To the extent betterment assessments are paid in
104installments and any such installment is not paid when due, the betterment assessment lien may
105be foreclosed to the extent of any unpaid installment payments and any penalties, interest and
106fees related thereto. In the event such betterment assessment lien is foreclosed, such lien shall
107survive the foreclosure to the extent of any unpaid installment payments of the betterment
108assessment secured by such lien that were not the subject of such foreclosure.
109 (8) A program administrator may incur debt for the purpose of providing financing for
110qualifying improvements, which debt is payable from revenues received from the improved
111property or any other available revenue source authorized by law.
112 (b) The owner of record of the residential property within the jurisdiction of an
113authorized program may apply to the authorized program administrator to finance a qualifying
114improvement. The program administrator may only enter into a financing agreement with the
115property owner.
116 Section 3. (a) Before entering into a financing agreement, the program administrator
117must make each of the following findings based on a review of public records derived from a
118commercially accepted source and the property owner’s statements, records, and credit reports:
119(1) he total amount of any betterment assessment for a residential property under this section
120does not exceed 20 percent of the fair market value of the property as determined by customary
121methods; (2)the financing agreement does not utilize a negative amortization schedule, a balloon 7 of 17
122payment, or prepayment fees or fines other than nominal administrative costs; (3) capitalized
123interest included in the original balance of the assessment financing agreement does not
124constitute negative amortization; (4) all property taxes and any other assessments, including
125betterment assessments, levied on the same bill as the property taxes are current and have not
126been delinquent for the preceding 3 years, or the property owner’s period of ownership,
127whichever is less (5) there are no outstanding fines or fees related to zoning or code enforcement
128violations issued by a municipality, unless the qualifying improvement will remedy the zoning or
129code violation; (6) there are no involuntary liens, including, but not limited to, construction liens
130on the residential property; (7) no notices of default or other evidence of property based debt
131delinquency have been recorded and not released during the preceding 3 years or the property
132owner’s period of ownership, whichever is less; (8) the property owner is current on all mortgage
133debt on the residential property; (9) the property owner has not been subject to a bankruptcy
134proceeding within the last 5 years unless it was discharged or dismissed more than 2 years before
135the date on which the property owner applied for financing; (10) the residential property is not
136subject to an existing home equity conversion mortgage or reverse mortgage product; (11) the
137term of the financing agreement does not exceed the weighted average useful life of the qualified
138improvements to which the greatest portion of funds disbursed under the assessment contract is
139attributable, not to exceed 30 years; (12) the program administrator shall determine the useful
140life of a qualifying improvement using established standards, including certification criteria from
141government agencies or nationally recognized standards and testing organizations; (13) the total
142estimated annual payment amount for all betterment assessments entered into under this section
143on the residential property does not exceed 10 percent of the property owner’s annual household
144income; (14) income must be confirmed using reasonable evidence and not solely by a property 8 of 17
145owner’s statement; and (15) if the qualifying improvement is for the conversion of an onsite
146sewage treatment and disposal system to a central sewerage system, the property owner has
147utilized all available local government funding for such conversions and is unable to obtain
148financing for the improvement on more favorable terms through a local government program
149designed to support such conversions.
150 (b) A property owner and the program administrator may agree to include in the
151financing agreement provisions for allowing change orders necessary to complete the qualifying
152improvement. Any financing agreement or contract for qualifying improvements which includes
153such provisions must meet the requirements of this paragraph. If a proposed change order on a
154qualifying improvement will increase the original cost of the qualifying improvement by 20
155percent or more or will expand the scope of the qualifying improvement by more than 20
156percent, before the change order may be executed which would result in an increase in the
157amount financed through the program administrator for the qualifying improvement, the program
158administrator must notify the property owner, provide an updated written disclosure form as
159described in section 4 to the property owner, and obtain written approval of the change from the
160property owner.
161 (c) A financing agreement may not be entered into if the total cost of the qualifying
162improvement, including program fees and interest, is less than $5,000.
163 (d) A financing agreement may not be entered into for qualifying improvements in
164buildings or facilities under new construction or construction for which a certificate of
165occupancy or similar evidence of substantial completion of new construction or improvement has
166not been issued. 9 of 17
167 Section 4. (a) In addition to the requirements of sections 3 and 4 , a financing agreement
168may not be executed unless the program administrator first provides, including via electronic
169means, a written financing estimate and disclosure to the property owner which includes all of
170the following, each of which must be individually acknowledged in writing by the property
171owner: (1) the estimated total amount to be financed, including the total and itemized cost of the
172qualifying improvement, program fees, and capitalized interest; (2) the estimated annual
173betterment assessment; (3) the term of the financing agreement and the schedule for the
174betterment assessments; (4) the interest charged and estimated annual percentage rate; (5 a
175description of the qualifying improvement; (6) the total estimated annual costs that will be
176required to be paid under the assessment contract, including program fees; (7) the total estimated
177average monthly equivalent amount of funds that would need to be saved in order to pay the
178annual costs of the betterment assessment, including program fees; (8) the estimated due date of
179the first payment that includes the betterment assessment; (9) a disclosure that the financing
180agreement may be canceled within 3 business days after signing the financing agreement without
181any financial penalty for doing so; (10 a disclosure that the property owner may repay any
182remaining amount owed, at any time, without penalty or imposition of additional prepayment
183fees or fines other than nominal administrative costs; (11) s disclosure that if the property
184owner sells or refinances the residential property, the property owner may be required by a
185mortgage lender to pay off the full amount owed under each financing agreement under this
186section; (12) a disclosure that the assessment will be collected along with the property owner’s
187property taxes, and will result in a lien on the property from the date the financing agreement is
188recorded; (13) a disclosure that potential utility or insurance savings are not guaranteed, and will
189not reduce the assessment amount; and (14) a disclosure that failure to pay the assessment may 10 of 17
190result in penalties, fees, including attorney fees, court costs, and the issuance of a tax certificate
191that could result in the property owner losing the property and a judgment against the property
192owner, and may affect the property owner’s credit rating.
193 (b) Prior to the financing agreement being approved, the program administrator must
194conduct an oral, recorded telephone call with the property owner during which the program
195administrator must confirm each finding or disclosure required in section 3 and this section.
196 Section 5. At least 5 business days before entering into a financing agreement, the
197property owner must provide to the holders or loan servicers of any existing mortgages
198encumbering or otherwise secured by the residential property a written notice of the owner’s
199intent to enter into a financing agreement together with the maximum amount to be financed,
200including the amount of any fees and interest, and the maximum annual assessment necessary to
201repay the total. A verified copy or other proof of such notice must be provided to the program
202administrator. A provision in any agreement between a mortgagor or other lienholder and a
203property owner, or otherwise now or hereafter binding upon a property owner, which allows for
204acceleration of payment of the mortgage, note, or lien or other unilateral modification solely as a
205result of entering into a financing agreement as provided for in this section is unenforceable. This
206subsection does not limit the authority of the holder or loan servicer to increase the required
207monthly escrow by an amount necessary to pay the annual assessment.
208 Section 6. A property owner may cancel a financing agreement on a form established by
209the program administrator within 3 business days after signing the financing agreement without
210any financial penalty for doing so. 11 of 17
211 Section 7. .Any financing agreement executed pursuant to this section, or a summary
212memorandum of such agreement, shall be submitted for recording in the appropriate public
213records of the municipality within which the residential property is located by the program
214administrator within 10 business days after execution of the agreement and the 3-day
215cancellation period. A notice of lien for the full amount of the financing may be recorded in the
216public records of the county where the property is located. Such lien is not enforceable in a
217manner that results in the acceleration of the remaining nondelinquent unpaid balance under the
218assessment financing agreement.
219 Section 8. At or before the time a seller executes a contract for the sale of any residential
220property for which a betterment assessment has been levied under this section and has an unpaid
221balance due, the seller shall give the prospective purchaser a written disclosure statement in the
222following form, which must be set forth in the contract or in a separate writing:
223 QUALIFYING IMPROVEMENTS.—The property being purchased is subject to an
224assessment on the property pursuant to chapter 80 of the Massachusetts General Laws. The
225assessment is for a qualifying improvement to the property and is not based on the value of the
226property. You are encouraged to contact the property appraiser’s office to learn more about this
227and other assessments that may be provided by law.
228 Section 9. Before disbursing any funds to a qualifying improvement contractor for a
229qualifying improvement on residential property, the program administrator shall confirm that the
230applicable work or service has been completed by verifying, either through TruePic or a similar
231geolocational verification application, or as applicable, that the final permit for the qualifying 12 of 17
232improvement has been closed with all permit requirements satisfied or a certificate of occupancy
233or similar evidence of substantial completion of construction or improvement has been issued .
234 Section 10. (a) A program administrator or its third party administrator shall establish a
235process to register contractors for participation in a program authorized by a municipality
236pursuant to the provisions of this legislation. A qualifying improvement contractor may only
237perform such work that the contractor is appropriately licensed, registered, and permitted to
238conduct. At the time of application to participate and during participation in the program,
239contractors must: (1) hold all necessary licenses or registrations for the work to be performed
240which are in good standing; (2)comply with all applicable federal, state, and local laws and
241regulations, including obtaining and maintaining any other permits, licenses, or registrations
242required for engaging in business in the jurisdiction in which it operates and maintaining all
243state-required bond and insurance coverage; and (3) file with the program administrator a written
244statement that the contractor will comply with applicable laws and rules and qualifying
245improvement program policies and procedures, including those on advertising and marketing.
246 (b)A third-party administrator or a program administrator, either directly or through an
247affiliate, may not be registered as a qualifying improvement contractor.
248 (c)A program administrator shall establish and maintain: (1) a process to monitor
249qualifying improvement contractors for performance and compliance with requirements of the
250program and must conduct regular reviews of qualifying improvement contractors to confirm
251that each qualifying improvement contractor is in good standing; and (2) procedures for notice
252and imposition of penalties upon a finding of violation, which may consist of placement of the 13 of 17
253qualifying improvement contractor in a probationary status that places conditions for continued
254participation, suspension, or termination from participation in the program.
255 Section 11. (a)A program administrator may contract with one or more third-party
256administrators to administer a program authorized by a municipality pursuant to the provisions of
257this legislation on behalf of and at the discretion of the program administrator.
258 (b) The third-party administrator must be independent of the program administrator and
259have no conflicts of interest between managers or owners of the third-party administrator and
260program administrator managers, owners, officials, or employees with oversight over the
261contract. A program administrator, either directly or through an affiliate, may not act as a third
262party administrator for itself or for another program administrator.
263 (c) The contract must provide for the entity to administer the program according to the
264requirements set forth herein and the terms of the vote or resolution by which the municipality
265authorized the program. However, only the program administrator may levy or administer
266betterment assessments.
267 The program administrator must include in any contract with the third-party administrator
268the right to perform annual reviews of the administrator to confirm compliance with the
269requirements set forth herein, the terms of the vote or resolution by which the municipality
270authorized the program, and the contract with the program administrator.
271 Section 12. (a) When communicating with a property owner, a program administrator,
272qualifying improvement contractor, or third-party administrator may not suggest or imply: (1)
273that a betterment assessment authorized under the provisions of this legislation is a government
274assistance program; (2)that qualifying improvements are free or provided at no cost, or that the 14 of 17
275financing related to a betterment assessment authorized under the provisions of this legislation is
276free or provided at no cost; or (3) that the financing of a qualifying improvement using the
277program authorized pursuant to this legislation does not require repayment of the financial
278obligation.
279 (b) When communicating with a property owner, a program administrator, qualifying
280improvement contractor, or third-party administrator may not (1) make any representation as to
281the tax deductibility of a betterment assessment; (2) provide to a qualifying improvement
282contractor any information that discloses the amount of financing for which a property owner is
283eligible for qualifying improvements or the amount of equity in a residential property; (3)
284advertise the availability of betterment assessments for, or solicit program participation on behalf
285of, the program administrator unless the contractor is registered by the program administrator to
286participate in the program and is in good standing with the program administrator; (4) provide
287any payment, fee, or kickback to a qualifying improvement contractor for referring property
288owners to the program administrator or third-party administrator. However, a program
289administrator or third-party administrator may provide information to a qualifying improvement
290contractor to facilitate the installation of a qualifying improvement for a property owner; (5)
291reimburse a qualifying improvement contractor for its expenses in advertising and marketing
292campaigns and materials; or (6) provide any direct cash payment or other thing of material value
293to a property owner which is explicitly conditioned upon the property owner entering into a
294financing agreement. However, a program administrator or third-party administrator may offer
295programs or promotions on a nondiscriminatory basis that provide reduced fees or interest rates
296if the reduced fees or interest rates are reflected in the betterment assessments and are not
297provided to the property owner as cash consideration. 15 of 17
298 (c) A program administrator, qualifying improvement contractor, or third-party
299administrator may encourage a property owner to seek the advice of a tax professional regarding
300tax matters related to assessments.
301 Section 13. (a) A recorded financing agreement may not be removed from attachment to
302a residential property if the property owner fraudulently obtained funding pursuant to the
303provisions of this legislation. A financing agreement may not be enforced, and a recorded
304financing agreement may be removed from attachment to a residential property and deemed null
305and void, if: (1)the property owner applied for, accepted, and canceled a financing agreement
306within the 3-business-day period pursuant to the provisions of this legislation. A qualifying
307improvement contractor may not begin work under a canceled contract; (2) a person other than
308the property owner obtained the recorded financing agreement. The court may enter an order
309which holds that person or persons personally liable for the debt; or (3)the program
310administrator, third-party administrator, or qualifying improvement contractor approved or
311obtained funding through fraudulent means and in violation of the provisions of this legislation
312for qualifying improvements on the residential property.
313 (b)If a qualifying improvement contractor has initiated work on residential property
314under a contract deemed unenforceable under this section, the qualifying improvement
315contractor: (1) may not receive compensation for that work under the financing agreement;
316(2)must restore the residential property to its original condition at no cost to the property owner;
317and (3) must immediately return any funds, property, and other consideration given by the
318property owner. If the property owner provided any property and the qualifying improvement
319contractor does not or cannot return it, the qualifying improvement contractor must immediately 16 of 17
320return the fair market value of the property or its value as designated in the contract, whichever is
321greater.
322 (c) If the qualifying improvement contractor has delivered chattel or fixtures to
323residential property pursuant to a contract deemed unenforceable under this section, the
324qualifying improvement contractor has 90 days after the date on which the contract was executed
325to retrieve the chattel or fixtures, provided that: (1)the qualifying improvement contractor has
326fulfilled the requirements of paragraphs (3)(a) and (b); and (2) and the chattel and fixtures can
327be removed at the qualifying improvement contractor’s expense without damaging the residential
328property.
329 (d) If a qualifying improvement contractor fails to comply with this section, the
330property owner may retain any chattel or fixtures provided pursuant to a contract deemed
331unenforceable under this section.
332 (e) A contract that is otherwise unenforceable under this section remains enforceable if
333the property owner waives his or her right to cancel the contract or cancels the financing
334agreement pursuant to the provisions of this legislation, but allows the qualifying improvement
335contractor to proceed with the installation of the qualifying improvement.
336 Section 14. (a) Each program administrator that is authorized to administer a program for
337financing qualifying improvements to residential property under the provisions of this
338legislation shall post on its website an annual report within 45 days after the end of its fiscal year
339containing the following information from the previous year for each program authorized under
340the provisions of this legislation: (1) the number and types of qualifying improvements funded;
341and (2) he aggregate, average, and median dollar amounts of annual betterment assessments and 17 of 17
342the total number of betterment assessments collected pursuant to financing agreements for
343qualifying improvements.