Bill H.5018

FILED ON: 9/30/2020

HOUSE . . . . . . . . . . . . . . . No. 5018

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act to guarantee housing stability during the COVID-19 emergency and recovery.

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to establish forthwith ongoing stabilization of the housing market for renters and homeowners during the COVID-19 emergency and recovery, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public safety and convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 6 of chapter 62 of the General Laws, as appearing in the 2018 Official Edition, is hereby amended by adding the following subsection:-

(w)(1) A taxpayer engaged in the business of renting residential dwelling units in the commonwealth shall be allowed a credit against the taxes imposed by this chapter to the extent provided for in this subsection for rental losses during the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020.

(2) Except as otherwise provided in this subsection the amount of credit shall be the difference between the cumulative amount of rents owed on a monthly basis pursuant to the rental agreement covering each occupied dwelling unit minus the tenant's rental obligation, for those months occurring during the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020.

(3) The secretary of housing and economic development, in consultation with the commissioner of revenue, shall promulgate regulations for an application process for the credit and shall receive applications for the credit. The application for the credit by the owner or owners of the rental property shall include the amount of the credit requested, which shall be based upon the cumulative monthly rent owed by tenants pursuant to the rental agreement covering each occupied dwelling unit during each month of the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020, and the actual monthly rent collected during each respective month of the state of emergency, to be allocated by the secretary. The application shall also include the tenant’s name and mailing address for each dwelling unit for which credit is sought. The applicant shall have the burden of providing sufficient proof to the secretary for review and determination. The application shall contain sufficient information to identify each such dwelling unit and the taxpayer or taxpayers with respect to each such dwelling unit, and such other information as the secretary, in consultation with the commissioner, shall prescribe. The secretary shall develop procedures for verifying the tenant's rental obligation for the tax credit benefit period.

(4) While the application is pending, the applicant shall not issue a notice to quit or commence a summary process action to recover possession of the dwelling unit for the non-payment of rent, which is the subject of the application.

(5) Subject to the availability of credits, the amount of the credit available for each dwelling unit shall be the actual difference between the monthly lease amounts for occupied units minus the tenant's rental obligation and the actual amount of monthly rent collected, as determined by the commissioner. Upon approval of the credit to an owner, the owner shall release the occupants of the dwelling unit from any liability for the non-payment of rent that is the subject of the credit.

(6) Owners shall not be eligible for credit: (i) if such owner has received property tax relief, rental voucher assistance or any other federal, state or locally funded benefit intended to pay, abate or compensate the owner for unpaid rent: (ii) if the owner has commenced a proceeding to recover possession of the property for the non-payment of rent, which is the subject of the application; or (iii) another owner, co-owner or applicant has applied for tax credits for the unpaid rent of the same units.

(7) The secretary shall prioritize credit applications for dwelling units whose rent is at or below the fair market rent as most recently calculated by the United States Department of Housing and Urban Development for the area in which the dwelling unit is located.

(8) If the amount of the credit allowed under this subsection for any taxable year exceeds the taxpayer's tax liability for that tax year the taxpayer may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year of those credits, which exceed the tax for the taxable year.

(9) This section shall apply to taxable years beginning on or after January 1, 2020.

SECTION 2. Chapter 63 of the General Laws, as so appearing, is hereby amended by inserting after section 38HH the following section:-

Section 38II. (a) A taxpayer engaged in the business of renting residential dwelling units in the commonwealth shall be allowed a credit against the taxes imposed by this chapter to the extent provided for in this subsection for rental losses during the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020.

(b) Except as otherwise provided in this subsection the amount of credit shall be the difference between the cumulative amount of rents owed on a monthly basis pursuant to the rental agreement covering each occupied dwelling unit minus the tenant's rental obligation, for those months occurring during the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020.

(c) The secretary of housing and economic development, in consultation with the commissioner of revenue, shall promulgate regulations for an application process for the credit and shall receive applications for the credit. The application for the credit by the owner or owners of the rental property shall include the amount of the credit requested, which shall be based upon the cumulative monthly rent owed by tenants pursuant to the rental agreement covering each occupied dwelling unit during each month of the state of emergency concerning the novel coronavirus disease outbreak declared by the governor on March 10, 2020, and the actual monthly rent collected during each respective month of the state of emergency, to be allocated by the secretary. The application shall also include the tenant’s name and mailing address for each dwelling unit for which credit is sought. The applicant shall have the burden of providing sufficient proof to the secretary for review and determination. The application shall contain sufficient information to identify each such dwelling unit and the taxpayer or taxpayers with respect to each such dwelling unit, and such other information as the secretary, in consultation with the commissioner, shall prescribe. The secretary shall develop procedures for verifying the tenant's rental obligation for the tax credit benefit period.

(d) While the application is pending, the applicant shall not issue a notice to quit or commence a summary process action to recover possession of the dwelling unit for the non-payment of rent, which is the subject of the application.

(e) Subject to the availability of credits, the amount of the credit available for each dwelling unit shall be the actual difference between the monthly lease amounts for occupied units minus the tenant's rental obligation and the actual amount of monthly rent collected, as determined by the commissioner. Upon approval of the credit to an owner, the owner shall release the occupants of the dwelling unit from any liability for the non-payment of rent that is the subject of the credit.

(f) Owners shall not be eligible for credit: (i) if such owner has received property tax relief, rental voucher assistance or any other federal, state or locally funded benefit intended to pay, abate or compensate the owner for unpaid rent: (ii) if the owner has commenced a proceeding to recover possession of the property for the non-payment of rent, which is the subject of the application; or (iii) another owner, co-owner or applicant has applied for tax credits for the unpaid rent of the same units.

(g) The secretary shall prioritize credit applications for dwelling units whose rent is at or below the fair market rent as most recently calculated by the United States Department of Housing and Urban Development for the area in which the dwelling unit is located.

(h) If the amount of the credit allowed under this subsection for any taxable year exceeds the taxpayer's tax liability for that tax year the taxpayer may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year of those credits, which exceed the tax for the taxable year.

(i) This section shall apply to taxable years beginning on or after January 1, 2020.

SECTION 3. Chapter 186 of the General Laws is hereby amended by adding the following section:-

Section 31. (a) For the purposes of this section, the words “just cause” shall mean that: (1) the tenant has failed to pay the rent; (2) the tenant has materially violated an obligation or covenant of the tenancy or occupancy, except the obligation to surrender possession upon proper notice, and has failed to cure such violation within 30 days after having received written notice thereof from the owner; (3) the tenant is committing a nuisance in the unit, is permitting a nuisance to exist in the unit, is causing substantial damage to the unit or is creating a substantial interference with the quiet enjoyment of other occupants; (4) the tenant is using or permitting the unit to be used for any illegal purpose; or (5) the owner intends to make bona fide personal use of the unit within 180 days, including use of the unit as the owner’s primary residence or the use of the unit by a member of the owner’s family as a primary residence.

(b) A city or town that adopts this section in the manner provided in section 4 of chapter 4 may require that any summary process action for a residential dwelling unit, except an owner-occupied dwelling with 4 or fewer units in said city or town, is for just cause.

SECTION 4. Item 7004-9316 of section 2 of chapter 41 of the acts of 2019 is hereby amended by adding the following words:- ; provided further, that households with a median income of no more than 100 per cent of median income and are at risk of becoming homeless due to a significant reduction of income or increased expenses due to the inability to pay rent for a residential dwelling unit caused by the outbreak of the 2019 novel coronavirus, also known as COVID-19, or the effects of the governor’s March 10, 2020 emergency declaration shall be eligible for rental assistance pursuant to this item and that such assistance shall be remitted by voucher to the renter’s landlord.

SECTION 5. Chapter 65 of the acts of 2020 is hereby amended by inserting after section 3 the following 2 sections:-

(a)SECTION 3A. Notwithstanding any general or special law to the contrary, no person shall: (1) commence or attempt to commence a non-essential eviction or (2) charge or collect rent or use and occupancy payments in excess of the agreed-upon amount as of March 10, 2020, except that housing authorities and landlords with tenants whose rent payments are partially or fully subsidized shall be exempt from clause (2). Any waiver of this section included in a lease or other contract shall be against public policy and shall be void. This section shall not apply to owner-occupied buildings composed of 4 or fewer rental units.

SECTION 3B. Notwithstanding any general or special law, rule, regulation or order to the contrary, no court having jurisdiction of a summary process action or any other trial court department shall make public or publish, in any manner, the name or other identifying information, including, but not limited to, the person’s address, of any person named as a party to a summary process or civil action where the plaintiff seeks non-payment of rent from a period beginning with the COVID-19 emergency and for 1 year after the termination of the state of emergency; provided, further, that such information shall be impounded and shall remain permanently unavailable for public inspection or publication, except to the parties to the action or their attorney, or as ordered by the court for good cause shown.

SECTION 6. Section 5 of said chapter 65 is hereby amended by striking out subsection (b) and inserting in place thereof the following subsection:-

(b) A creditor or mortgagee shall grant forbearance to a mortgagor of a mortgage loan for a residential property as defined in section 35B of said chapter 244 if the mortgagor submits a request to the mortgagor’s servicer affirming that the mortgagor has experienced a financial impact from COVID-19. The request may be made in any form, written or oral, and the forbearance shall be granted regardless of the mortgagor’s delinquency status. The forbearance shall last 180 days, although at the mortgagor’s request, the period of forbearance may begin in an increment shorter than 180 days and then extended at the mortgagor’s request. The forbearance shall be extended for an additional 180 days at the mortgagor’s request. Fees, penalties or interest beyond the amounts scheduled and calculated as if the mortgagor made all contractual payments on time and in full under the terms of the mortgage contract shall not accrue during the period of forbearance granted under this subsection. A payment subject to the forbearance, including any escrow payments required to be paid in the mortgage contract, shall be added to the end of the term of the loan unless otherwise agreed to by the mortgagor and mortgagee. Nothing in this subsection shall prohibit a mortgagor and mortgagee from entering into an alternative payment agreement for the payments subject to the forbearance. The mortgagee shall not furnish information to a consumer reporting agency related to mortgage payments subject to forbearance pursuant to this act. Nothing in this act shall be interpreted to reduce a mortgagor’s rights under the federal Coronavirus Aid, Relief, and Economic Security Act, as applied to federally backed mortgage loans.

SECTION 7. Said section 5 of said chapter 65 is hereby further amended by adding the following 2 subsections:-

(d) Notwithstanding any general or special law, rule, regulation or order to the contrary, a creditor or mortgagee shall grant forbearance to a mortgage loan for residential property owned by a nonprofit entity or an affiliate or agent of the non-profit entity or a mortgagor, including affiliates and agents, that owns 15 or fewer residential apartments, if the mortgagor submits a request to the mortgagor’s servicer affirming that the mortgagor has experienced a financial impact from the COVID-19 emergency. The forbearance shall last 180 days; provided, that at the mortgagor’s request, the period of forbearance may begin in an increment shorter than 180 days and then extended at the mortgagor’s request, may be extended an additional 180 days at the mortgagor’s request, and shall be offered on the same terms and conditions in subsection (b).

(e) A mortgagor who has requested and received mortgage forbearance under subsection (b) or (d) shall for each month of the mortgage forbearance period, waive and forever hold tenants harmless from the obligation to pay that month’s rent for each rental unit located on the property that is secured by the mortgage and which is occupied by a household who resided lawfully in the unit as of March 10, 2020, except if the mortgagor demonstrates by clear and convincing evidence that the tenant’s failure to pay rent did not result from a loss of income or other change in economic circumstances caused directly or indirectly by the COVID-19 emergency.

SECTION 8. Said chapter 65 is hereby further amended by striking out sections 6 to 8, inclusive, and inserting in place thereof the following 7 sections:-

SECTION 5A. The commissioner of banks and the attorney general may develop and promulgate regulations and standardized forms for the written documentation required in section 5; provided, however, that the absence of such forms shall not render this act inoperable.

SECTION 5B. Notwithstanding any general or special law to the contrary, the housing court department of the trial court shall have exclusive original jurisdiction of all claims for rent or mortgage payments due and payable during the period running from March 10, 2020 until 1 year after the COVID-19 emergency declaration has been lifted.

SECTION 5C. Violations of this act shall constitute unfair or deceptive acts or practices for the purposes of section 2 of chapter 93A of the General Laws and shall be enforceable by the attorney general as well as by aggrieved tenants, homeowners or other occupants in the same manner and to the same extent as other violations of said chapter 93A. All the remedies of said chapter 93A shall be available for violations of any section of this act.

SECTION 6. Section 4 shall expire 120 days after the effective date of this act or 45 days after the COVID-19 emergency declaration has been lifted, whichever is sooner; provided, however, that the governor may postpone such expiration in increments of not more than 90 days; provided further, that the governor shall not postpone such expiration to later than 45 days after the COVID-19 emergency declaration has been lifted.

SECTION 6A. Section 3 and section 3A shall expire 1 year after the COVID-19 emergency declaration has been lifted; provided, that any deadline or time period for action that is tolled under subsection (c) of said section 3 shall begin to run upon the expiration of said section 3.

SECTION 7. Subsection (a) of section 5 shall expire 1 year after the COVID-19 emergency declaration has been lifted.

SECTION 8. Notwithstanding any general or special law to the contrary, a creditor or mortgagee shall not be required to grant a forbearance to a mortgagor of a mortgage loan for a residential property under subsection (b) or (d) of section 5 if the mortgagor’s request for such forbearance is made after the expiration date in section 7.

SECTION 9. (a) There shall be established and set upon the books a COVID-19 Housing Stability and Recovery Fund to be administered by the department of housing and community development, to provide assistance to owners of residential units who were unable to pay housing and housing-related costs for reasons related to the COVID-19 emergency.

(b) The Fund shall consist of public and private sources such as revenue from appropriations or other monies authorized by the general court and specifically designated to be credited to the fund, funds from the federal government, and all other sources. Amounts credited to the Fund shall not be subject to further appropriation and any money remaining in the fund at the end of a fiscal year shall not revert to the General Fund.

(c) Amounts credited to the fund may be used, without further appropriation to provide grants or loans to landlords of residential dwelling units if: (i) the landlord owns no more than 15 residential dwelling units; and (ii) the landlord is able to demonstrate financial hardship due to the deprivation of rental income during the novel coronavirus state of emergency declared by the governor.

SECTION 10. (a) There shall be a special legislative commission established pursuant to section 2A of chapter 4 of the General Laws to study and investigate the effects of COVID-19 on housing.

(b) The commission shall consist of the following 33 members: the house and senate chairs of the joint committee on housing, who will serve as co-chairs; the chief justice of the housing court or a designee; the chief of the civil rights division of the attorney general’s office or a designee; the executive director of the Massachusetts Housing Partnership Fund or a designee; the executive director of Community Economic Development Assistance Corporation or a designee; the executive director of Massachusetts Housing Finance Agency or a designee; the executive director of Citizens’ Housing and Planning Association, Inc. or a designee; the executive director of City Life/Vida Urbana or a designee; the executive director of Small Property Owners Association, Inc. or a designee; the executive director of the Mass Alliance of HUD Tenants or a designee; the executive director of Massachusetts Immigrant and Refugee Advocacy Coalition, Inc. or a designee; the executive director of Massachusetts Association of Community Development Corporations or a designee; the executive director of Preservation of Affordable Housing, Inc. or a designee; the executive director of the Joint Center for Housing Studies of Harvard University or a designee; the executive director of the Massachusetts Institute of Technology Center for Real Estate or a designee; the executive director of the Massachusetts Institute of Technology Abdul Latif Jameel Poverty Action Lab or a designee; the executive director of Pine Street Inn, Inc. or a designee; a designee from the Housing Prescription as Health Care Program at Boston Medical Center; 2 directors of local housing authorities to be appointed by the chair, 1 of whom shall be from western Massachusetts and 1 of whom shall be from a gateway municipality; and 12 members to be appointed by the governor, 1 of whom shall be appointed from a list of nominees provided by the Shriver Center on Poverty Law’s Racial Justice Institute, 1 of whom shall be appointed from a list of nominees provided by Charles Hamilton Houston Institute for Race and Justice, 1 of whom shall be appointed from a list of nominees provided by the Boston branch of the NAACP, 1 of whom shall be appointed from a list of nominees provided by the Urban League, 1 of whom shall be appointed from a list of nominees from the ACLU Racial Justice Program, 1 of whom shall be an expert in medical and behavioral health appointed from a list of nominees from the Dimock Health Center, 2 of whom shall be representatives of large affordable housing developers, 2 of whom shall be representatives of small financial institutions and 2 of whom shall be representatives of large financial institutions; provided, that the representatives of financial institutions shall include women and people of color in such proportion as these groups exist in the commonwealth's population as periodically determined by the state secretary as the commonwealth's chief census officer.

(c) The commission shall investigate and report on the effects of the COVID-19 pandemic on housing, including but not limited to: (i) the cost and supply of housing; (ii) housing distress to families, seniors, undocumented immigrants and financially vulnerable populations; (iii) the financial impact on small property owners; (iv) the risks of speculation by large financial institutions and venture capital; (v) the impact on financing of housing maintenance and operations; (vi) the impact on employment in the housing maintenance and operations sectors; (vii) the disparate impact of the COVID-19 pandemic on black, indigenous and people of color in the area of housing stability; and (viii) the health effects of COVID-19-related housing instability.

(d) Not later than 3 months after the effective date of this act, the commission shall file a report of its findings and recommendations with the clerks of the house of representatives and the senate.

SECTION 11. Section 4 is hereby repealed.

SECTION 12. Section 11 shall take effect 90 days after termination of the governor’s March 10, 2020 declaration of a state of emergency.