The Affordable Homes Act (“the Act”) is focused on preserving and producing affordable rental housing. Legal protection for tenants is also an important theme in the Act. The following tenant protection initiatives were included:
- Eviction sealing
- Expanded condo conversion protections
- New voluntary alternative to up-front security deposit
- Office of Fair Housing
- Protections for tenants in local housing development
One tenant protection that was not adopted was the proposed tenant opportunity to purchase.
Eviction sealing
Section 52 of the Act, adds a new, long-sought, and widely-supported provision to the General Laws. The provision is intended to assure that tenants who face eviction at some point in their lives are not permanently disadvantaged in seeking housing — there is convincing anecdotal evidence that any eviction case, regardless how far in the past and regardless of the outcome, may make it exceedingly difficult to find housing. As shown in the table below, the new provision allows tenants to petition for the sealing of eviction cases against them under different rules for different types of evictions.
Timelines and decision standards for petitions for sealing of eviction records
| Eviction Type | When petition may be brought | Court decision standard |
|---|---|---|
| “No-fault” — i.e, no allegation of non-payment or lease violation | Any time after case over | Shall seal |
| Non-payment of rent | 4 years with no other nonpayment eviction cases. Any time if back rent is paid. | Shall seal if petitioner certifies non-payment due to hardship |
| “Fault” — lease violations other than non-payment | 7 years with no other fault eviction cases. | Shall seal |
| Nuisance — prostitution, drugs, etc. | 7 years and no other fault or nuisance cases and no other related criminal convictions | If in the interest of justice and public safety |
| Case of any type that is dismissed | Any time after case over, no notice to parties or hearing required | Shall seal |
| Case of any type with judgment in favor of defendant | Any time after case over, no notice to parties or hearing required | Shall seal |
Sealing of dismissed cases without delay was added by a floor amendment in the senate and was slightly controversial. It was not in the version of the eviction sealing bill filed by the lead sponsor Senator Lydia Edwards, although it was included in the version of eviction sealing which had been previously reported by the Judiciary. While a dismissed case is ambiguous — cases may end in dismissal simply because a tenant departs, regardless of the merits of the case — a pattern of multiple dismissed cases does strongly suggest a pattern of non-payment of rent. All versions of the language did require the tenant to petition for sealing — it was never contemplated to be automatic — so a tenant who lacks respect for their obligations will likely remain identifiable as they may not make the effort to seal their cases. Additionally, landlords remain able to seek references from prior landlords; reference checking is necessary anyway to identify cases in which a tenant fell behind and left voluntarily without the filing of an eviction case. The conference committee accepted sealing of dismissed cases without delay, resolving this balance of concerns in favor of people seeking housing.
The consequences of sealing the record of a case are:
- The record is not available in public court indexes or for inspection
- Consumer reporting agencies (i.e. credit reporters) may not report the eviction 30 days after it has become unavailable in the courts
- Consumer reporting agencies may not use the eviction in credit scoring 30 days after it has become unavailable in the courts
- An applicant for housing or credit may answer “no record” as to that sealed case (and application forms must notify applicants that they can do so)
- Sealed records may be still made accessible by a court in its discretion for “public safety, scholarly, educational, journalistic or governmental purposes,” generally with personal information redacted.
- Sealed records shall be made available as necessary and appropriate for collection of a money judgment or for criminal enforcement.
Note that existing consumer credit law already prohibits consumer reporting agencies from reporting any judgment more than seven years old. This existing law is updated to reflect the new sealing rules by Section 28 of the Act.
The new sealing language defines the concept of a “lessor action” — an action brought by a tenant against a landlord. However, this definition is only used to identify an event that would restart the time line to sealing. There is no provision for sealing of lawsuits brought by the tenant. Note that there is an apparent drafting error — the new language refers to lessor actions “brought against the petitioner” while it should refer to lessor actions brought by the petitioner, but the intent is clear.
Expanded condo conversion protections
Section 57 of the Act extends condominium conversion protections to buildings with under 4 units which are not owner-occupied. All buildings under 4 units were previously exempted whether or not owner-occupied (unless part of a larger development).
As background, a special act of the legislature in 1983 (Acts of 1983, Chapter 527) regulates the conversion of rental units to condominium or coop ownership. The 1983 statewide law requires:
- Notice to tenants of intention to convert
- One year delay after notice before requirement to vacate (two years for a person with disability or an elderly or low or moderate income tenant)
- Limitation of rent increases to inflation rate during delay period
- Tenant opportunity to purchase their unit on terms at least as favorable as offered to the general public for 90 days from time of notice
- Relocation costs of $750 ($1,000 for a person with disability or for elderly or low or moderate income tenant)
- For a person with disability or for elderly or low or moderate income tenant, assistance in finding comparable rental housing
A municipality may adopt differing provisions by a 2/3 vote of their legislative body.
The 1983 original law exempted buildings with less than four units. A 1989 amendment tightened up loopholes in the 1983 law. In particular, it closed a loophole for condominium conversions of town house style developments: it removed the exemption buildings under four units if they are part of a development.
Our current change goes further and limits the small building exemption to owner-occupied buildings, so making all non-owner-occupied buildings under four units subject to the law. This will make a material difference in the communities that have large stocks of older two- and three- family rental housing. From a previous statewide compilation of 2023 assessors’ data, we know that of the approximately 3 million housing units in the state, approximately 460,000 units are in the approximately 200,000 two- and three- family buildings that have not been yet converted to condominium ownership. Some of these 200,000 small, non-condo buildings may be owner-occupied, so the 200,000 is an upper bound on the number of non-owner-occupied small buildings newly subjected to the condominium conversion law. From the 2022 American Community Survey, we know that there almost 180,000 owner-occupied units in two- and three- family structures in Massachusetts, so there must be at least 20,000 (200,000 less 180,000) non-owner-occupied small buildings. However many of the owner-occupied units in small buildings in the census must already be condominiums, so the true number of non-owner-occupied small buildings is likely much greater than 20,000.
Voluntary alternative to security deposit
Section 50 of the act authorizes HLC to develop regulations that would create a framework for a landlord and tenant to agree to a fully or partially non-refundable fee in lieu of a security deposit. The goal is to reduce the initial financial hurdle for new tenants, effectively allowing them to pay their security deposit over time. The total amount collected shall not exceed one month’s rent (a typical security deposit), but the possibility that some of the fee would be non-refundable offers some compensation for the risk to the landlord created by the delay in receiving the deposit. This may suffice to make the voluntary arrangement more attractive to landlords.
Fair housing
Section 5 of the Act created an office of fair housing within the executive office of housing and livable communities (“HLC”). The new office has a broad mandate to address equity issues in housing.
Housing discrimination per se has long been illegal in Massachusetts. Agencies already empowered to respond to complaints of housing discrimination include:
- Civil Rights Division of Massachusetts Attorney General’s Office
- Massachusetts Commission Against Discrimination
- U.S. Department of Housing and Urban Development
The new office of fair housing does not have enforcement powers. The mandate of the new office is to broadly coordinate among state agencies on policies and strategies to:
- (A) advance the elimination of housing discrimination and increase access to fair housing;
- (B) overcome patterns of segregation;
- (C) foster inclusive communities without barriers that restrict access for individuals or groups protected from unlawful practices pursuant to chapter 151B; and
- (D) support enforcement of and compliance with all fair housing laws, including, but not limited to, said chapter 151B and the federal Fair Housing Act, 42 U.S.C. 3601 et seq.;
New section 31(b)(i) of chapter 23B added by Section 5 of the Act.
The Act further directs the agency to “facilitate communication and partnership among state agencies and municipalities” and “facilitate the development of interagency initiatives to examine and address the social and economic determinants of housing disparities.”
The Act creates, but does not capitalize, a new Fair Housing Fund to be expended by the new office “for the purpose of eliminating housing discrimination.” The new office can function within the operating budget of HLC without the capitalization of the fund itself. The fund is intended to support activities like:
New section 2FFFFFFF(b) of chapter 29 added by Section 6 of the Act.
- (i) private enforcement initiatives;
- (ii) education and outreach initiatives;
- (iii) fair housing testing;
- (iv) lending discrimination;
- (v) affirmatively furthering fair housing; and
- (vi) special projects.
Protect tenants in local housing development
Under existing Chapter 121B, Section 26(k), local housing authorities have the power to convey property to a private developer subject to detailed review and approval by HLC. Such a conveyance can help fund the replacement or rehabilitation of existing public housing units and create additional affordable and/or market rate housing. Existing Chapter 121B, Section 26(q) streamlines procedures for this type of conveyance and the existing fourteenth paragraph of Chapter 121B Section 34 explicitly exempts the private developer from public procurement rules as they redevelop units for public housing.
The new provision added by section 35 of the act codifies protections for existing public housing tenants in the context of such a redevelopment, assuring that:
- Tenants retain all rights under federal, state, or local subsidy programs
- Tenants will not be evicted or see their assistance reduced or be forced to reapply
- The new project will have at least the same number of low income units.
As to the first item above — rights under subsidy programs — the new provision includes an exception allowing changes needed to “secure financing necessary for the feasibility of the project.” However, the new provision includes no such exception as to the second item above — eviction or reduction of assistance. This is a possible inconsistency that will be worked out under the heavy supervision of HLC required by Chapter 121B, Section 26(k), which already provides for relocation planning, tenant participation, and preservation of low income units.
Note that as to preservation of low income units, Chapter 121B, Section 26(k) has slightly weaker language than the new provision. The existing language allows a reduction in low income units when there is no shortage of low income housing in the city or town or if necessary to provide for units accessible to persons with disabilities. Thus, the new provision (which has no such exceptions) strengthens the law as to preservation of low-income units.
Tenant opportunity to purchase (not adopted)
The House version of the Affordable Housing Act included a version of the tenant opportunity to purchase act (“TOPA”). This provision was not adopted in the conference committee report. TOPA, when adopted by a municipality, would create a process requiring a property owner considering a sale to a third party to first negotiate with tenants to arrange a sale to a tenant organization or a tenant designee (likely a community development corporation, “CDC”). Most commonly these deals could close, if at all, only through a designated CDC and only when CDC capital is available. My sense from conversation with CDC’s has been that their need is usually more capital — they do not usually suffer from a shortage of projects to do. Capital available to most CDC’s will likely be fully deployed without the extra flow of opportunities that TOPA would create for them. It does not seem wise to burden most larger property sales with the TOPA process — which would, according to realtors, depress market rate housing production — when it would do so little to increase CDC redevelopment activity. It is possible that a more narrowly targeted TOPA proposal could be successful in a future session.