Legislative Update from Preti Strategies
July 1, 2022 marks the beginning of the sprint to the end of “full formal sessions” in the Massachusetts State Legislature. Although the House of Representatives and Senate meet throughout the year, all votes taken after July 31 of the second year of the biennial session are voice‑votes, and generally, only routine, non-controversial matters are passed. What this means for landlords is that we have to throw all our efforts behind stopping the legislative proposals that we are fighting between now and August 1. As of the writing of this update, the House and Senate are still negotiating a compromise on the state’s budget, despite the fiscal year beginning on July 1 (an interim budget was passed to fund the government through the end of the month). In addition to the budget, legislative leaders indicated that they will take up a supplemental appropriations bill, an economic development bill, and possibly a revenue bill to deal with certain changes to the state tax code. While not problematic in their current form, all of these bills have the potential to be changed or amended to include provisions we oppose. We will monitor their progress as we continue to fight against the harmful bills that remain in play.
Below are updates on the bills we have been watching over the course of the session.
TOPA
Of the bills we oppose, the “Tenant Opportunity to Purchase Act,” known in Massachusetts as “An Act to Guarantee a Tenant’s First Right of Refusal” (House bill 1426 and Senate bill 801), has the greatest chance of passing and is therefore our #1 threat item for the remainder of the legislative session. Having received a favorable report by the Joint Committee on Housing, the bill is now before the House Committee on Ways and Means. Its next stop if endorsed by that committee, would be the House Floor.
Language similar to this bill was passed at the very end of the 2019-2020 legislative session, but was vetoed by Governor Baker. Due to timing issues, the legislature was unable to take up a veto override vote. Therefore, TOPA was killed. The engagement of property owners with legislative leaders will be key in our efforts to stop this bill from passing once again.
Transfer Tax
Proposals to allow cities and towns to pass surcharges on home and commercial property sales have been discharged from the Joint Committee on Housing to the Joint Committee on Revenue. This procedural move means that an entirely new committee will need to conduct its own analysis of the bills and go through its own process. This is a promising development given the time frame involved, but it could also mean that something similar to the transfer tax language may end up in a larger Revenue bill, or as amendments to other bills. SPOA is working to ensure that these proposals remain in committee.
Rent Control
There are two categories of rent control bills before the legislature: Statewide repeals of the law forbidding local communities from passing their own rent control ordinances and so-called “home-rule petitions” which would exempt individual communities (such as Boston and Cambridge) from that law on a one-off basis. The state‑wide repeal bill(s) have been extended to July 31. What that means is that the Joint Committee on Housing gave itself until the end of formal sessions to consider the bill. While not a death knell, this extension bodes well for rent control not being on the agenda for legislative consideration. The local bills are still pending before committee, and we hope to have more information in the coming days. However, in the past, the legislature has been very wary to grant local exemptions to statewide prohibitions on rent control.
Eviction Sealing
Eviction sealing remains before the House Committee on Bills in the Third Reading, which is a last stop before it could be debated on House floor. The so-called HOMES bill, which SPOA has watched and testified against, would allow for the sealing of eviction records without requiring notice to housing providers and with very little chance for courts to overrule the sealing of the record once a petition has been made to seal it. The bill would apply to cases where tenants broke the terms of their lease (including in cases where they broke the law) and in so-called “no-fault” evictions as well. Evicted tenants need only wait three years after the eviction and then petition the court. Once sealed, records would be shielded from credit reporting and other information-gathering services. SPOA has been working with other stakeholders to oppose or at least significantly overhaul and narrow this bill. It has not been scheduled for consideration by the House.
Free Attorneys for All Tenants
A bill SPOA opposed, House Bill 1911, which would establish a universal—and unreciprocated—right to legal counsel for all tenants into state law at the expense of the taxpayer, has been placed into a legislative “study.” What this means is that the bill is highly unlikely to be passed this year. We will continue to monitor the larger bills mentioned above for amendments that try to insert right-to-counsel language, but for now, this issue appears to be dormant until the next legislative session.
Rent Escrow
Per previous newsletters, SPOA supported House bill 1784, “An Act to Promote Housing Stability,” as it creates a level playing field in cases where Massachusetts law allows for the withholding of rent by a tenant alleging breach of duty or contract by a property owner. In these circumstances, rent payments are too often spent on other items by the time a final verdict is reached in each case. However, by virtue of setting the funds aside, a rent escrow requirement would guarantee that the funds will be available to whichever party the court decides should receive them based on the final outcome of each case. Moreover, a rent escrow requirement would guard against the withholding of rent payments based upon artificial pretenses or excuses that are inappropriate. This is therefore a simple fix to make the system work as intended. SPOA also supported similar House bills, including 1533, 1546, and 1677.
by Jim Eisenberg
