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Massachusetts Senate takes efforts to prevent home theft

The Massachusetts Senate has heeded the demands of federal and state courts and approved legislation to prevent the continuation of so-called home theft.

An amendment added to the 2025 budget last week would remove a municipality's ability to take a property owner's earned equity beyond the unpaid taxes owed and “reasonable incurred costs,” according to the office of the amendment's sponsor, Sen. Mark Montigny. The measure would also apply to private companies that buy tax liens from cities and towns.

“I could talk at length about the outrage and give examples of defenseless people who have been cheated, because that is what it is. It is theft,” Montigny said during the meeting on Thursday evening.

The New Bedford Democrat has sponsored similar bills in several sessions, reworking this term's proposal before it passed unanimously and introducing an anti-asset theft measure that now requires a House response.

The Joint Committee on Finance voted on April 30 for a bill to combat asset theft (H 4624), which contains elements from eight bills, including an earlier text by Montigny.

The sponsor of one of these eight bills, Senator Joanne Comerford of Northampton, said during the budget debate that she had learned about the problem of capital theft – municipalities or private companies withholding the entire value of a home, which far exceeds the cost of a tax debt – from two constituents who owed $65,000 in back taxes.

“It was a long process,” Comerford said of their ordeal. “And they did it. But if they had failed, they would have lost $275,000 in home equity, their sweat, their pain, their joy, the things they had saved for.”

This session's action on equity theft followed a unanimous U.S. Supreme Court decision on May 25, 2023, finding that a Minnesota state law on tax lien forfeiture – similar to the Minnesota state law – was unconstitutional.

Then in Massachusetts, a Hampden County Superior Court judge ruled on April 18 that the expropriation of excess equity under the state law, known as Chapter 60, violated Article 10 of the Massachusetts Constitution's Bill of Rights and the Fifth Amendment to the U.S. Constitution.

“The legislation in its current form is untenable and requires correction by the legislature,” wrote Supreme Court Justice Michael Callan in his ruling.

Montigny said during the debate that his revised text would apply retroactively to expropriation cases up to May 25, 2021, and would ensure that the sale of an affected home is carried out “fairly” by a broker who has no conflict of interest related to the foreclosure.

Senator Susan Moran is co-chair of the Joint Committee on Finance and sponsored the Montigny Amendment last week.

“Overall, we have arrived at a point where the consumer is more protected, which is something I certainly support and what I advocated for in committee,” the Falmouth Democrat told the State House News Service on Tuesday.

Moran said the wording would reduce the interest rate on tax arrears from 16% to 8% for “consumer convenience,” extend the repayment period from five to 10 years and make the notice periods for homeowners “more realistic.”

The Massachusetts Municipal Association, which lobbies for city and town governments, did not directly address the Senate vote in a statement Tuesday, but focused on the Finance Committee's bill and said it looked forward to “working with House leadership.”

“We are working with the Legislature to find a legislative solution to this issue that clarifies practices under state law and is consistent with the recent Supreme Court decision,” said Executive Director Adam Chapdelaine. “A recent committee bill has been introduced in the House of Representatives, and we look forward to working with House leaders to make important legislative changes while protecting taxpayers and communities across the Commonwealth.”

Chapdelaine noted that local governments “rely on property taxes to provide essential local services” and said they “are working hard with citizens to provide them with the flexibility they need as they face difficult times.”

The Finance Committee's equity theft bill (H 4624) was referred to the House Budget Committee on May 13, a body that can either serve as a direct springboard to the House floor or as the final resting place for bills that expire at the end of the session.

Montigny's wording is now attached to the Senate version of the state budget, which will soon go into closed negotiations between Representative Aaron Michlewitz, chairman of the House Budget Committee, and Senate Budget Committee Chairman Michael Rodrigues.

“This should not be the starting point for negotiations with the other branch or the executive,” Montigny said of the language approved as a budget policy amendment. “This is where we should end, or perhaps the advocates and others who have been angry will teach us even more when they look at this. And our goal should be to make this the strongest bill in the country.”

Moran said she heard from several stakeholders this session, from the MMA to the district court. A spokeswoman said Tuesday that the court system was “grateful to have had the opportunity to discuss the bill with the legislative committees.”

And, Moran said, her office has also heard of Tallage, a private company that buys up municipal tax debts.

“And all I'm saying is it was a brief meeting,” she told State House News Service.

Montigny said the text of the “thick bill” leads every reader to a conclusion.

“We have gone from a law that was anti-consumer and anti-homeowner to a law that is pro-consumer and anti-homeowner – if we pass the strict provisions of this amendment,” the senator from the South Coast told his colleagues before the vote, which ended 39-0.

Anna Harden

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