Massachusetts House passes home equity legislation

Malden delegation voted to protect property owners from “equity theft”

On June 26, 2024, the Massachusetts House of Representatives unanimously passed H.4791, An Act relative to municipal tax lien procedures and protections for property owners in the Commonwealth. This bill seeks to align current Massachusetts statute with a recent decision by the U.S. Supreme Court while addressing the issue of delinquent tax collections – or so-called “equity theft.” The legislation secures the rights of property owners to reclaim any excess equity to which they are entitled after all taxes and fees are repaid to the municipalities following a tax foreclosure, while substantially increasing notifications and other protections for property owners throughout the foreclosure process. On June 27, the Massachusetts Senate referred the bill to its committee on Ways and Means.

While cities and towns across the Commonwealth critically depend on property taxes to provide public services to the community, they are also committed to providing needed flexibility in the collection of these property taxes when residents face difficult times. Since the May 2023 Supreme Court decision of Tyler v. Hennepin County, the Legislature has been dedicated to helping municipalities update existing practices by updating our statute to align with the SCOTUS decision. This bill ensures that Massachusetts law is constitutional throughout all municipalities in the Commonwealth and fair to those subject to municipal tax lien foreclosure proceedings.

“I am glad to see the House pass this substantial piece of legislation,” said State Representative Steve Ultrino (D-Malden). “This bill rectifies a systemic problem and protects homeowners from home equity theft by providing them with better notices in the municipal tax lien process and an equitable process for resolving tax delinquencies. Moreover, it also ensures that our state statute and laws are aligned with the Supreme Court’s decision. Thank you Speaker Mariano, Chair Cusack and House leadership for advancing this bill.”

“We are excited for the passage of the Home Equity Bill, marking a significant milestone in the effort to support homeowners and municipalities throughout the state,” said State Representative Paul Donato (D-Medford). “This legislation will allow families to access the equity in their homes, which will provide financial flexibility and essential stability. We, as legislators, will continue to foster strong communities and equitable prosperity.”

“This legislation ensures Massachusetts is constitutionally aligned with current statute following the Supreme Court’s Tyler v. Hennepin decision,” said State Representative Kate Lipper-Garabedian (D-Melrose). “This bill will ensure property owners in the Commonwealth are properly protected following a tax foreclosure, allowing them to reclaim any excess equity while also extending additional protections and provides clarification to the tax lien foreclosure process for our cities and towns.”