In addition to increased funding for programs to assist moderate-income homebuyers (for example, in line items 7004-0072 and 7004-0081) the Affordable Homes Act includes several policy measures that will benefit home owners and home buyers.
- Buyers’ right to inspection
- Increase in homestead exemption
- Foreclosure prevention pilot program
- Condominium board process
- Registered land administration
Buyers’ right to inspection
In 2023, Senator Michael Moore filed legislation to require that all home buyers have the right to obtain a professional inspection of a home after making their initial offer. The legislation would not have required that buyers do an inspection, only that they could not be forced to give up their right to an inspection. A version of this legislation was included in the Affordable Homes Act (“the Act”) as Section 45.
Some buyers recently, especially private equity and other investors, have been willing to purchase homes without an inspection. Some sellers recently have been insisting that offers be submitted without an inspection contingency that would give the buyer some time to have the home professionally inspected and allow the buyer to renegotiate if hidden defects are found. First-time home buyers are especially disadvantaged without an inspection because they often lack the experience to identify defects themselves and often lack the financial resources to absorb any surprises. Last March, I conducted a survey that found that protection for the right to do an inspection was popular among home buyers and owners and was most popular with those having less home-buying experience.
Real estate transactions are complicated and we have to be concerned about unintended technical consequences to any new rules. During Senate debate, we negotiated an amendment sponsored by Senator Moore that used wrote general language protecting the buyer’s right to an inspection, while leaving the technical details to be fleshed out by Housing and Livable Communities through regulations. The amendment includes appropriate exceptions and allows HLC to create additional “limited” exceptions.
The general principles that will be fleshed out through regulation are that no seller of a home shall:
New Section 101 of Chapter 143, added by Affordable Homes Act (“the Act”) Section 45.
- condition the acceptance of an offer to purchase on the prospective purchaser’s agreement to waive . . .[the] purchaser’s right to have the structure or unit inspected, . . .
- accept an offer to purchase from a prospective purchaser, or an agent thereof who, in advance of the seller’s acceptance of an offer, informs the seller, either directly or indirectly, that the prospective purchaser intends to waive, in whole or in part, the prospective purchaser’s right to inspection;
While there was some opposition for realtors, the conference committee accepted the amendment language and it is now Section 45 of the Act.
Increase in homestead exemption
Section 51 of the Act increases the value of a declared homestead from $500,000 to $1,000,000. The declared homestead is perfected by filing a declaration at the registry of deeds. There is also a lesser automatic homestead, the value of which was not increased and remains unchanged at $125,000. A homestead protects homeowners from losing their homes (or at least the part of the value of their homes up to the statutory amount) when they are found liable for judgments. A homestead does not protect against mortgage foreclosure, prior liens, or federal, state, or local tax obligations.
This trial court library page collects law about the homestead, but as of September 24, 2024 had not yet been updated to reflect the Act. This FAQ from the Secretary of State has already been updated, however, it includes an apparent cut-and-paste error suggesting that the automatic homestead is newly enacted.
The standard declaration of homestead does not include an amount — it simply declares homestead. See the standard form and the governing statute. So a statutory increase in the amount should not create a need to refile the homestead. The FAQ from the Secretary of State confirms that those who previously declared a homestead do not generally need to refile to benefit from increased amount. However, this page is not intended to provide legal advice and homeowners should consult an attorney to be sure that they have perfected their homestead protection.
Foreclosure prevention pilot program
Section 129 of the Act creates a foreclosure protection pilot program. The Massachusetts Office of Public Collaboration at the University of Massachusetts at Boston is directed (subject to later appropriation of necessary funds) to offer foreclosure mediation in not more than five communities. In participating communities, creditors who notify borrowers of prospective foreclosure may include a notice of the opportunity for mediation. If a borrower then elects to do so, a mediation would be initiated, intended to lead to a loan workout short of foreclosure. Since notification is voluntary, this provision may not result in a high participation in mediation, but it does give lenders and borrowers who recognize the benefits of mediation and an additional pathway to pursue.
Condominium board process
Section 47 of the Act permits virtual meetings and votes by condominium boards, overriding any condominium deed provisions to the contrary:
- Board meetings may be held by phone or video conference
- Votes may be taken by phone, video, or email.
- Owner meetings may be held by phone or video conference.
- Votes of the owners may occur by mail or email.
- Electronic signatures of of owners are acceptable.
Registered land administration
Sections 46, 48, and 49 of the Act make technical changes in procedures related to registered land. These were not widely discussed and are not apparently controversial. The changes will make it easier for home owners to withdraw from the registered land system (a public legal system, alternative to the deed registry, which offers certification of title). The registered land system, although intended to streamline the protection of title, is now perceived as cumbersome when making sales of property.