SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2802

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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by inserting after section 44 the following 20 sections:-

“SECTION 44A. Section 1 of chapter 60 of the General Laws, as so appearing, is hereby amended by inserting after the definition of “Collector” the following 2 definitions:-

“Excess equity”, any remaining surplus amount above the taxes, interest, fees and charges of keeping, as reflected in the tax title account balance as of the date of the foreclosure judgment, and the fees, expenses, charges and costs actually and reasonably incurred in selling or appraising the property in accordance with section 64A following a final judgment of foreclosure; provided, however, that where the property is sold in accordance with said section 64A, the excess equity shall be determined by deducting from the gross sale proceeds: (i) the tax title balance as of the date of the foreclosure judgment; (ii) any unpaid property tax, assessments for unpaid water and sewer charges, property insurance and homeowners association or condominium fees accruing from the date of foreclosure; and (iii) any documented, post-judgment costs incurred by the judgment holder from the sale of the property, including, but not limited to, broker or real estate agent fees or commissions, listing fees, marketing and advertising costs, legal fees, litigation fees and costs, closing costs, transfer fees, auctioneer fees, notice to property owner, appraisal fees, publication costs, property management, emergency demolition, environmental fees and other fees, charges, or costs directly or indirectly related to the maintenance, marketing and sale of the property; provided further, that where the property is retained by the judgment holder in accordance with said section 64A, the excess equity shall be determined by deducting the tax title account balance as of the date of the foreclosure judgment and any documented post-judgment costs of appraisal incurred by the judgment holder from the appraised highest and best use value of the property as of the date of the final judgment of foreclosure.

“Language understandable by a least sophisticated consumer”, language that complies with the standard for evaluating truth and deception under the federal Fair Debt Collection Practices Act, 15 U.S.C. section 1692 et seq., as summarized in Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985).

SECTION 44B. Subsection (c) of section 2C of said chapter 60, as so appearing, is hereby amended by striking out paragraph (9) and inserting in place thereof the following paragraph:-

(9) A purchaser owning any tax receivable shall give notice to a taxpayer, and to the appropriate municipality, within 12 business days of purchasing said tax receivable. The notice shall include the name, address, telephone number and preferred method of communication with said purchaser and any service agent acting on behalf of said purchaser. If the purchaser or the service agent of such tax receivables shall change, the new purchaser or service agent shall provide the notice required herein within 12 business days of the effective date of such change. Where the land is Class one, residential property, as defined in section 2A of chapter 59, such notice shall: (i) be mailed and addressed to the taxpayer at their last known residence and usual place of abode or place of business; (ii) be posted upon the class one, residential property; (iii) be posted in a convenient and public place; and (iv) include a uniform notice prepared by the commissioner of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth that the notice affects important legal rights and should be translated immediately. The notice shall state:

(i) that a complaint to foreclose the tax title may be filed on or after a specific date;

(ii) that the tax title has been sold to a purchaser of tax receivables;

(iii) why the property was taken and that the owner may redeem the property up until the property is foreclosed by a judgment issued on a proceeding before the land court;

(iv) the components of the amount as of the date of the notice, subject to accumulating taxes, fees and charges, required to redeem the property and the procedure for redemption;

(v) that if a complaint to foreclose the tax title is filed and the owner does not respond by filing an answer, the court may enter an order defaulting the owner;

(vi) that if a complaint to foreclose the tax title is filed, the owner may respond by filing an answer that requests that the court set the terms by which the owner may redeem the property;

(vii) that if the property is not redeemed, the purchaser is entitled to receive a judgment from the land court that transfers title to the property to the town or purchaser and permanently eliminates any title rights the owner has in the property; and

(viii) that following a foreclosure of the property, the former owner shall be entitled to any excess equity in the property, upon written request to the municipality or purchaser of tax receivables, pursuant to section 64A.

SECTION 44C. Said chapter 60 is hereby further amended by striking out section 16, as so appearing, and inserting in place thereof the following section:-

Section 16. The collector shall, before selling the land of a resident or non-resident or distraining the goods of any person, serve on him a statement of the amount thereof with a demand for its payment. If 2 or more parcels of land are assessed in the name of a resident, or non-resident, the statement of the aggregate amount of the taxes thereon may be made in 1 demand. Such demand may also include taxes due on account of tangible personal property and any motor vehicle excise tax. If the heirs of a deceased person, co-partners or 2 or more persons are jointly assessed, service shall be required for only 1 of the persons. Such demand for the tax upon land may be made upon the person occupying the same on January first of the year in which the tax is assessed. No demand shall be required to be made on a mortgagee, unless the mortgagee has given notice under section 38, in which case no demand shall be required to be made on the owner or occupant. Demand shall be made by the collector by mailing the same to the taxpayer  at taxpayer’s last known residence and usual place of abode or place of business or to the address best known by the collector; provided, however, that failure to receive the demand notice shall not invalidate a tax or any proceedings for the enforcement or collection of the same; provided further, that if the land is class one, residential property, as defined in section 2A of chapter 59, the demand shall include a uniform notice prepared by the department of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth that this notice affects important legal rights and should be translated immediately, and providing clear notice that the non-payment of property taxes can result in the taking of the property and that the property owner may be eligible for exemptions, abatements and tax deferrals and other assistance and should contact the local assessor’s office, together with the address, telephone number, email address, if available, and internet address for further information.

SECTION 44D. Section 25 of said chapter 60, as so appearing, is hereby amended by  adding the following sentence:- The notice posted shall be prepared by the department of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth that this notice affects important legal rights and should be translated immediately.

SECTION 44E. Section 52 of said chapter 60, as so appearing, is hereby amended by inserting after the third sentence the following 2 sentences:- Where the land is class one, residential property, as defined in section 2A of chapter 59, such notice shall: (i) be mailed by and addressed to the taxpayer at their last known residence and usual place of abode or place of business; (ii) be posted upon the class one, residential property; (iii) be posted in a convenient and public place; and (iv) include a uniform notice prepared by the department of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth, that this notice affects important legal rights and should be translated immediately. The notice shall state that the treasurer intends to sell the tax title to the owner’s property, that the non-payment of property taxes may result in the loss of the property and that the property owner may be eligible for exemptions, abatements and tax deferrals and other assistance and may contact the local assessor’s office for further information, together with the telephone number, email address, if available and internet address for the local assessor.

SECTION 44F. Section 53 of said chapter 60, as so appearing, is hereby amended by striking out, in line 4, the words “, which notice”, and inserting in place thereof the following words:- “; provided, however, that where the land is class one, residential property, as defined in section 2A of chapter 59, such notice shall: (i) be mailed by and addressed to the taxpayer at their last known residence and usual place of abode or place of business; (ii) be posted upon the class one, residential property; and (iii) be published on the town or city website; provided further, that for any properties not class one, residential the notice”.

SECTION 44G. Said section 53 of said chapter 60, as so appearing, is hereby further amended by adding the following sentence:- A notice provided pursuant to this section shall be prepared by the department of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth, that this notice affects important legal rights and should be translated immediately.

SECTION 44H. Said section 53 of said chapter 60, as so appearing, is hereby further amended by adding the following paragraph:-

Where the land is class one, residential property, as defined in section 2A of chapter 59, all notices sent pursuant to this section shall include a uniform notice prepared by the department of revenue, together with a notice in the 7 most common languages in the commonwealth that this notice affects important legal rights and should be translated immediately. Such notice shall state in language understandable by a least sophisticated consumer:

(i) what taxes or other municipal costs remain unpaid;

(ii) the taxpayer’s right to redeem full ownership of the property and the components of the amount required to redeem the property;

(iii) that a complaint to foreclose the tax title may be filed on or after a specific date;

(iv) that the tax title may be sold to a purchaser of tax receivables;

(v) that if a complaint to foreclose the tax title is filed and the owner does not respond by filing an answer, the court may enter an order defaulting the owner;

(vi) that if a complaint to foreclose the tax title is filed, the owner may respond by filing an answer that requests that the court set the terms by which the owner may redeem the property;

(vii) that if the property is not redeemed, the town or purchaser is entitled to receive a judgment from the land court that transfers title of the property to the town or purchaser and permanently eliminates any title rights the owner has in the property; and

(viii) that following a foreclosure of the property, the former owner shall be entitled to any excess equity in the property, upon written request to the municipality or purchaser of tax receivables, pursuant to section 64A.

SECTION 44I. Section 62 of said chapter 60, as so appearing, is hereby amended by striking out, in line 8, the word “sixteen” and inserting in place thereof the following figure:- 8.

SECTION 44J. Section 62A of said chapter 60, as so appearing, is hereby amended by striking out, in line 4, the figure, “5” and inserting in place thereof the following figure:- 10.

SECTION 44K. Said section 62A of said chapter 60, as so appearing, is hereby further amended by striking, in lines 5 and 6, the words “not more than 50 per cent of”.

SECTION 44L. Said section 62A of said chapter 60, as so appearing, is hereby further amended by striking out in in line 12, the figure “25” and inserting in place thereof the following figure:- 10.

SECTION 44M. Said chapter 60 is hereby further amended by striking out section 64, as so appearing, and inserting in place thereof the following section:-

Section 64. The land court shall have exclusive jurisdiction of the foreclosure of all rights of redemption from titles conveyed by a tax collector's deed or a taking of land for taxes, in a proceeding provided for in sections 65 to 75, inclusive. The title conveyed by a tax collector's deed or by a taking of land for taxes shall be absolute after foreclosure of the right of redemption by judgment of the land court as provided in this chapter; provided, however, that the entry by the land court of a judgment of foreclosure of the right of redemption shall not impair or limit the right of the owner of the land at the time of foreclosure, and of those holding an interest in the land at the time of foreclosure and their heirs, successors and assigns, to receive any excess equity, as defined in this chapter, and subject to the requirements of section 64A. Any sale or retention of property by a municipality or other foreclosing entity pursuant to this chapter shall be subject to the requirements of section 64A.

SECTION 44N. Said chapter 60, is hereby further amended by inserting after section 64 the following section:-

Section 64A.

Section 64A. (a) This section shall apply to the sale or retention of property by a municipality or a purchaser of tax receivables following a final judgment of the land court foreclosing the right of redemption under this chapter. Not more than 14 days after the of entry of judgment foreclosing the right of redemption becomes final, with either no appeal having been taken within the applicable time limit or any appeal taken having resulted in the entry of judgment pursuant to the rescript of the supreme judicial court or appeals court, the judgment holder shall elect to: (i) retain possession of the property; or (ii) sell the property. The judgment holder shall notify the former owners of the property and all others known to hold the right of redemption in the property at the time judgment is entered, by certified mail, to their last known address or place of business, of: (i) the judgment holder’s election; and (ii) the rights and procedures for claiming excess equity set forth in this section.

(b)(1) A municipality or a purchaser of tax receivables that has elected to retain the property under subsection (a), shall use reasonable best efforts to have the property appraised not later than 120 days after the final judgment of the land court; provided, however, that the judgment holder and any parties entitled to claim excess equity under this section may agree to a later date for the appraisal. The appraisal shall be: (i) for the highest and best use of the property as of the date of the final judgment of foreclosure; and (ii) conducted by an independent appraiser licensed in the commonwealth with the usual and customary professional appraisal practices.

(2) The appraised value shall be used to establish the amount of excess equity, which. shall be paid to any parties who make a valid claim for excess equity as set forth in this section.

(c) (1) A municipality or a purchaser of tax receivables that has elected to sell the property under subsection (a) shall, not later than 180 days after the final judgment of the land court, list the property for sale with a real estate agent or broker licensed in the commonwealth; provided, however, that the judgment holder and any parties entitled to claim excess equity under this section may agree to a later date for sale; provided further, that the real estate agent or broker shall not hold elected or appointed office or be employed by the municipality in which the property is located.

(2) The judgment holder for a property listed for sale pursuant to paragraph (1) that does not sell within 12 months of the date of listing shall: (i) auction the property with an auctioneer licensed in the commonwealth; provided, however, that the auctioneer does not hold elected or appointed office or is not employed by the municipality in which the property is located; (ii) accept bids that are not less than two-thirds of the appraised value of the property consistent with the appraisal requirements of subsection (b); and (iii) not accept bids by individuals that hold elected or appointed office or are employed by the municipality in which the property is located.

(3) A property shall not be considered retained by a judgment holder that has elected under subsection (a) to sell the property and has complied with the requirements of paragraph (2) but has been without success in such sale. If a property has not been sold after the auction, the judgment holder shall notify any parties entitled to claim excess equity of their intention to continue the sale to another date and not to retain the property. Such notice shall be mailed, by certified mail, to any parties entitled to claim excess equity, or their successors in interest, to their last known address or place of business.

(d)(1) Upon a sale of a property or an appraisal of property where the judgment holder has elected to retain possession, the judgment holder shall prepare a written itemized accounting setting forth the disposition of the proceeds arising from the sale or a report of the appraisal, including, but not limited to, the sale price, legal fees, marketing fees, auctioneer fees, advertising costs, appraisal fees and any excess equity due to any parties entitled to claim excess equity, or their successors in interest. The written itemized accounting shall be mailed, by certified mail, to their last known address or place of business, not more than 30 days after the sale of the property or receipt of the appraisal of the property if such property is retained.

(2) Where the judgment holder knows the identity and mailing address of the former property owner and all others known to hold the right of redemption in the property, the judgment holder shall, in addition to the written itemized accounting, provide for the provision of a proportional share of the excess equity to which such individual is entitled.

(3) A judgment holder that does not know the identity and mailing address of the former property owner and all others known to hold the right of redemption in the property shall, in addition to the written itemized accounting, provide a notice that the former owners of the property and all others known to hold the right of redemption in the property at the time judgment of foreclosure entered in the land court, or their successors in interest, may claim excess equity from the sale or retention of the property and that such claims shall be submitted in writing to the judgment holder not more than 18 months after the date of the notice. The excess equity claim shall be delivered to the judgment holder by personal service, receipt of which is acknowledged by the judgment holder, or by certified mail, return receipt requested; provided, however, that a municipality shall allow a claimant to submit a claim at the local collector’s office. The excess equity claim shall contain the claimant’s name, telephone number, mailing address, the property address or parcel number and a description of their interest in the property and shall include any other persons or entities known to the claimant to have an interest in the property at the time of the final judgment of foreclosure, including any other former owners, mortgagees, lienholders, heirs or other individuals or entities who held a right to redeem or their successors in interests.

(e) Excess equity shall be held in escrow by the judgment holder in a segregated interest-bearing account, in which all excess equity funds from all foreclosures are deposited and separately accounted for on the books and records of the municipality. Excess equity that has not been claimed within 19 months of a sale or appraisal of a property shall be disposed of pursuant to chapter 200A.

(f) The superior court shall have jurisdiction to hear any disputes that arise between or among the judgment holder and any former owners, mortgagees, lienholders, heirs or other individuals or entities who, at the time of the final judgment of the land court, held an interest in the property and right to redeem, or their successors in interest, and who are claiming excess equity, including, but not limited to, disputes regarding the valuation of the property, the sale process, the amount of excess equity, its distribution or any other aspect of this section. Any party may seek a determination of the dispute by filing a written complaint in the superior court not more than 12 months after the date of the notice of written itemized accounting following sale or appraisal of the property under subsection (d). Such complaint shall name all parties adversely interested who are known to the plaintiff and process shall issue and service be made consistent with the Massachusetts Rules of Civil Procedure. All matters pertaining to the litigation shall be heard by the superior court department and the parties shall be granted the right to a trial before a jury, unless all parties waive that right and file a written agreement requesting a trial without a jury.

SECTION 44O. Section 65 of said chapter 60, as so appearing, is hereby amended by striking out, in line 4, the word “six” and inserting in place the following figure:- 12.

SECTION 44P. Said chapter 60 is hereby further amended by striking out section 69A, as appearing in the 2022 Official Edition, and inserting in place thereof the following section:-

Section 69A. The land court may grant a motion to vacate a decree of foreclosure brought by any interested person other than the petitioner under section 65 within 1 year after the final entry of the decree if presented with extraordinary circumstances and if: (i) no  innocent purchaser has acquired an interest in the property for value; or (ii) no claim for excess equity has been paid pursuant to section 64A, unless the court makes appropriate equitable orders to protect the rights of the purchaser of the property or the payor of the excess equity. If the foreclosure petition was filed for an unoccupied or abandoned building as set forth in sections 1 and 81A, or there has been a certification pursuant to section 81B that the redemption amount as determined pursuant to section 62 exceeds the assessed value of the parcel, no petition to vacate a decree of foreclosure entered under section 69 and no proceedings at law or equity for reversing or modifying such a decree shall be commenced by any person other than the petitioner except within 90 calendar days after the final entry of the decree or within 1 year of the final entry of the decree, if the decree was entered prior to the effective date of this section. For any decree relating to a property for which record title stands in the name of a deceased person or person under guardianship or conservatorship, a petition may be maintained for reversal or modification of such decree up to 1 year from the date of decree.

No motion to vacate a decree of foreclosure and no proceeding at law or in equity for reversing or modifying such a decree shall be commenced by any person other than the petitioner under section 65 after 1 year, except upon a showing that the moving party’s due process rights have been violated.

If a decree of foreclosure is vacated pursuant to this section, all rights and obligations set forth in section 64A shall be suspended and any proceedings instituted in the superior court regarding excess equity shall be dismissed.

SECTION 44Q. Section 75 of said chapter 60, as so appearing, is hereby amended by adding the following sentence:- The notices shall be prepared by the department of revenue, in language understandable by a least sophisticated consumer, together with a notice in the 7 most commonly spoken languages in the commonwealth, that this notice affects important legal rights and should be translated immediately.

SECTION 44R. The second paragraph of section 77B of said chapter 60, as so appearing, is hereby amended by inserting after the second sentence the following sentence:- The notice shall also include the affirmative statement that the custodian will, following a completed sale, provide to such owner a written notice containing an itemized accounting of the disposition of the proceeds arising from the sale, including the sale price, legal fees, auctioneer fees and advertising costs, other fees and any excess equity due to the owner, within 30 days after the receipt of such funds.

SECTION 44S. Said section 77B of said chapter 60, as so appearing, is hereby further amended by inserting after the word “law”, in line 36, the following words:- , so long as the accounting provisions of this section and section 64A are satisfied.

SECTION 44T. Said section 77B of said chapter 60, as so appearing, is hereby further amended by striking out the fourth paragraph.”; and

by inserting after section 107 the following 3 sections:-

“SECTION 107A. There shall be a special commission to conduct a comprehensive study relative to current law and practice around the collection of delinquent property tax revenue by cities and towns in the commonwealth.

The commission shall consist of: the chairs of the joint committee on revenue or their designees, who shall serve as co-chairs; the commissioner of revenue or a designee; the chief justice of the land court department or a designee; the chief justice of the superior court department or a designee; 1 member who shall be appointed by the senate president; 1 member who shall be appointed by the speaker of the house of representatives; 1 member who shall be appointed by the minority leader of the house of representatives; 1 member who shall be appointed by the minority leader of the senate; 1 member who shall be appointed by the governor; the attorney general, or a designee; the executive director of the Massachusetts Municipal Association Inc.; the president of the Massachusetts Collectors’ and Treasurers’ Association, Inc; a representative of third-party purchasers of tax-receivables; and a representative on property owners’ rights.

The commission shall file a report that shall include, but not be limited to:

(i) an examination and assessment of the current local property tax collection processes, including property owner notification and communication, property tax deferral options or exemptions that exist for special classes, third-party investor and any subsequent foreclosure proceedings;

(ii) an examination of the role of purchasers of tax receivables, including third-party purchasers of tax receivables, on the collection of delinquent property tax revenue, and any recommended changes to said practice;

(iii) recommended changes to the current statutory interest rate for delinquent property taxes, if any, and the effect said changes would have on municipal operations and finances;

(iv) an examination of the revenue impact on cities and towns from former owners seeking to recover lost equity to which they may be entitled following the United States Supreme Court ruling in Tyler v. Hennepin County, 598 U.S. 631 (2023);

(v) recommended changes to the statute of limitations for such claims, if any;

(vi) the feasibility of a neutral third-party, including special masters and arbitrators, to oversee the determination of excess equity;

(vii) recommendations to implement additional reforms to municipal payment agreements under to section 62A of chapter 60 of the General Laws for seniors and individuals whose primary income source is disability benefits;

(viii) the collection and analysis of data which may include the number of foreclosures of properties following a tax taking which resulted in the loss of excess equity by former property owners for the 3 years preceding the United States Supreme Court ruling in Tyler v. Hennepin County, 598 U.S. 631 (2023);

(ix) best practices in place in other states; and

(x) Any other recommendations that the commission finds to be in the interest of property owners and municipalities in the commonwealth.

The commission shall file its final report and its recommendations for legislation with the clerks of the senate and house of representatives, the joint committee on revenue, and the senate and house committee on ways and means not later than December 31, 2025

SECTION 107B. To uphold the language access and inclusion notice requirements, pursuant to sections 44B to 44D, inclusive, and sections 44G, 44H, 44N and 44Q the department of revenue shall evaluate every 10 years the 7 most commonly spoken languages of the commonwealth utilizing the most recent data from the decennial federal census. The department shall update and prepare notices in language understandable by a least sophisticated consumer and the 7 most commonly spoken languages in the commonwealth, as established by the most recent census data.

SECTION 107C. A former owner or other previous holder of the right of redemption of property or their successors in interest, whose right of redemption was foreclosed upon by a final judgment of foreclosure entered on or after May 25, 2021, but before the date of the passage of this act, may file a written complaint in the superior court for the return of excess equity in accordance with section 64A of chapter 60 of the General Laws within 12 months of the passage of this act; provided, however, that no claim for the return of excess equity may be asserted by any party where a land court judgment of foreclosure was entered, and not appealed, on or before May 24, 2021.”; and

by inserting after section 104 the following section:-

“SECTION 109A. Sections 44A to 44S, inclusive, shall take effect as of November 1, 2024.”.