Tag Archives: Homestead

UCC Update Bill: Primed to Pass During Informal Session

This month the BBA Council voted to support House Bill 25 “An Act Making amendments to the Uniform Commercial Code Covering General Provisions, Documents of Title and Secured Transactions.”  This legislation was filed in January 2011 at the beginning of the 187th legislative session.  House Bill 25 will modernize provisions of Articles 1, 7 and 9 of the Uniform Commercial Code (UCC).  These updates will bring Massachusetts in line with the national model.  The revisions to the UCC include things like providing for electronic bills of lading and warehouse receipts and addressing technical corrections in personal property secured transactions.

House Bill 25 has broad support from groups representing creditors and debtors alike – including the Massachusetts Bankers Association and the Associated Industries of Massachusetts.  Last October, the Financial Services Committee held a public hearing on the bill, and it is now before the Economic Development and Emerging Technologies Committee.

The Legislature is in informal session through December. In order for bills to pass during informal session there cannot be any opposition – even a single member can derail a piece of legislation. This means that typically only non-controversial proposals would have a chance of advancing in the next two months.  Passage of a bill during an informal session is generally a win-win for everyone – because legislators get credit for passing sensible reforms and supporters are rewarded for their hard work.

Despite the fact that the Legislature only meets in informal sessions between now and the end of the year, House Bill 25 is still alive and there is a good chance that it will find its way to the Governor’s desk before January.  Here’s why….it’s a good bill, it’s non-controversial, and it has broad support and no known opposition.  Probably even more important than all of that is the fact that during informal sessions there is a much smaller queue of bills vying for placement on the legislative calendar.

A legislative victory by the end of December – and during an informal session – wouldn’t be the first time the BBA has seen a flurry of activity in the waning months of a legislative session.  In December 2010, when the last legislative session was coming to an end, the BBA was pleased to see homestead reform and an update to the bankruptcy exemptions statute in Massachusetts become law.  Similar to the updates of the UCC, these bills made sensible improvements to existing laws that were widely supported. Both bills progressed quickly in the final days of session but actually took years to gain traction to advance in the Legislature.  The BBA had been working on homestead reform for numerous legislative sessions and on various iterations of the bankruptcy exemptions statute for several years.

Controversial and contentious bills often grab headlines during formal session.  Informal sessions can present opportunities for the Legislature to turn attention to seemingly mundane but important issues like House Bill 25.  With more time to fully vet and promote passage, bills in this category often become law before the session ends.  The BBA will now focus on getting this bill on legislators’ radar screens in an effort to secure passage before the end of the year.

-Kathleen Joyce
Government Relations Director
Boston Bar Association
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It’s That Time of Year Again

As people race to finish holiday shopping, there’s a growing curiosity about which bills in the legislature will actually make it all the way to the governor’s desk during the session’s final weeks.  With one eye on our current bills and where they are during the informal sessions, we’ve also begun taking a hard look at our legislative priorities for the next session. 

This process started months ago and probably won’t be completed until January.  The BBA has been reviewing our portfolio of bills that we’ve filed in the past and determining whether or not the issues are still timely and important. For those that make the cut, we must take a careful look to ensure that the language in the bill still reflects the reforms we sought. 

The BBA’s issues are varied and far reaching; including everything from complicated tax issues to criminal justice reforms to family law matters and consumer protection, so the input and expertise of our member volunteers is crucial.  The goal is to present complete, up-to-date, and meaningful legislation that will have real world, positive impacts on the citizens of the Commonwealth and practitioners of the law.

Some bills are time sensitive and require immediate action.  Other bills get filed each session until we are able to focus enough of the legislature’s attention on them at just the right time.  For example, legislation updating the Homestead exemption and creating the Massachusetts Uniform Probate Code took many years to become law. 

An example going forward is our bill that would update the dollar amounts in Massachusetts for bankruptcy exemptions.  In 2004, amid concerns that the new federal bankruptcy law would make it harder for people to seek bankruptcy relief, and that under Massachusetts’ obsolete exemption statute, debtors are vulnerable to losing the very tools that allow them to earn a living, the BBA began to work on updating the state exemption statute.  Tying the dollar amounts in the statute to cost of living adjustments was just the beginning.  Our proposal also recognizes the need for things like computers, sophisticated and specialized power tools, and automobiles as items necessary for earning a living today.   It is critical to update the exemptions to ensure they are relevant to the real world in which we live.

Generally speaking, the exemptions remain unchanged until someone summons the energy to introduce and pass a bill increasing them – and in Massachusetts this hasn’t been done in over 30 years.  While there is no mechanism by which these exemptions are regularly reviewed and other reforms are needed as well, updating the personal exemption statute will be an important step in helping a very vulnerable population.

When legislation is filed, many of the volunteers that work on it have visions of attending a grand signing ceremony in a large community hall.  They imagine getting commemorative pens from the governor, along with cameras flashing from a full press corps.  But what usually happens is that bills fortunate enough to make it to the governor’s desk are rarely ever afforded any media coverage.  Instead most become law quietly without much notice. 

-Kathleen Joyce

Government Relations Director

Boston Bar Association

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Homestead: From the Council to the Governor’s Desk

The BBA watched this week as one of its long-standing legislative priorities, homestead reform, was enacted by the Senate.   An Act Relative to the Estate of Homestead is now on the governor’s desk awaiting his signature.  This is good news to the many BBA members who have worked year after year and session after session to see the much needed changes in this area.  This is also good news to the attorneys whose clients have come to them in dire straits, overwhelmed with debt and seeking help to obtain a fresh start.  These reforms are substantial and will provide important consumer protections to homeowners in Massachusetts.  In addition to the consumer protection aspects, the bill will address many of the issues that have caused great difficulty to the courts in interpreting the current homestead statute.

In 2000, a detailed study of the Massachusetts homestead statute appeared in the Boston Bar Journal.  Author Mark W. McCarthy noted that homestead was so badly in need of change that only a complete rewrite would suffice. McCarthy even described the current homestead statute as, “ugly, clumsy, even embarrassing – and it just doesn’t work.”  That same year the BBA filed a homestead bill that was sponsored by then-Senator Robert S. Creedon, Jr. who was also chair of the Joint Committee on the Judiciary.  The BBA’s bill at that time focused on certain aspects of the homestead law including an automatic provision, certain stacking concerns for the elderly or disabled and creditor issues with respect to a homestead. 

Despite our hard work, real progress was not made for years.  While the BBA pushed for its own version of homestead reform, other groups, most notably the Real Estate Bar Association (REBA), were also proposing their version of homestead reform.  It was Senator Creedon who asked the BBA and the REBA to work together on a single bill that would incorporate the reforms that both organizations sought.  The BBA’s dialogue with REBA on homestead yielded good input on ways to improve the bill and led to a multi-year drafting process that resulted in a revised and balanced bill that was filed jointly in the legislature.   Now, an even more improved version of the compromise bill that the BBA and REBA worked on sits on Governor Patrick’s desk. 

Here’s what the current homestead bill will do:

  • Clear up ambiguities and make rules for filing a homestead declaration more logical
  • Protect beneficiaries of trusts
  • A refinancing mortgage will not be able to terminate previously filed homesteads
  • Protect proceeds from insurance or a home sale
  • Protect spouses and co-owners who transfer property amongst themselves
  • Provide protection for manufactured homes

Our work continued as we rallied our members to testify at public hearings, meet with legislators, and contact their local Reps and Senators, and we got pretty close to the finish line at the end of the last legislative session in December 2008.  While we weren’t able to claim victory before the legislature recessed, we did refile the bill to build upon the momentum of the last session. 

Homestead reform will provide concrete and meaningful assistance to citizens in Massachusetts especially low income consumers and the elderly.  Now with homestead poised to pass some ten years after our efforts began, maybe we can get somewhere on updating the personal property exemption laws.

– Kathleen Joyce

Government Relations Director

Boston Bar Association

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Homestead Reform Legislation Is Way Overdue

It seems so easy — you buy a home, pay $35 and file a “Declaration of Homestead” to protect it from creditors up to the amounts set by law.  But it’s not so simple and it’s actually confusing.  While it seems like a no-brainer for any homeowner in Massachusetts, too many people fail to take advantage of this important benefit.

A quick survey of my friends revealed that some had never heard of a homestead declaration, and those that did had only a vague understanding of this rudimentary consumer protection tool.  The reason being is that the current law, Chapter 188 §§ 1-10 is ambiguous and unclear at best.

For several years now, the BBA has been working – along with the MBA and REBA – to update the Massachusetts Homestead Exemption.  This effort intensified during the BBA presidency of the late M. Ellen Carpenter, a bankruptcy lawyer, and is more important now than ever before.

Quite simply, a declaration of homestead is protection for the equity in your residence from most creditors up to $500,000 in the event you are sued.  The Homestead bill that is currently being considered by the legislature, S 2406, will modernize and clarify the existing law.  More importantly it will eliminate the requirement that an actual filing be necessary to ensure that a homeowner is protected.

If Homestead reform legislation is enacted, this important protection would be automatic — up to $125,000 for every Massachusetts homeowner. If you’ve filed a Declaration of Homestead that protection would go up to $500,000.

BBA leaders have testified on behalf of homestead legislation reform at numerous public hearings.  We continue to press our case with staff and legislators.  When legislation to update the homestead statute was taken up in the Senate chamber in late April, it was missing the essential automatic protection provision.  Senator Cynthia Creem filed an amendment to restore the automatic provision and the bill was engrossed.  It is now in House Ways and Means.

Looking ahead towards the last weeks of formal sessions, the legislature is still working on gambling, economic development, sentencing reform, and the state budget. The BBA will continue to persist in its advocacy efforts.

-Kathleen Joyce

Government Relations Director

Boston Bar Association

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