Real Estate Licensing [Pre-Licensure], S.121: SUPPORT

The intention of this bill is to enhance professionalism in the real estate industry through a modest increase in the pre-licensure requirements. This legislation would enhance the education requirements for obtaining a real estate salesperson’s license and it would also amend the educational and experience requirements for obtaining a real estate broker’s license.

Massachusetts has the third lowest educational requirements in the nation for licensure as a salesperson. In fact, Rhode Island and Alaska, are the only two other states that have a requirement less than the twenty-four hour requirement for licensure as a salesperson here in Massachusetts. Every other state has a higher hour requirement with the national average around 66 hours.

S.121 seeks to increase the Broker/Salesperson Licensing Exam Prerequisites as follows:
Broker: 40 hours of classroom instruction and 3 years experience as RE Salesperson, actively associated with licensed broker
Salesperson: 40 hours of classroom instruction

Currently, in order to sit for licensing exam to become Real Estate Broker or Salesperson, applicant must first have completed:
Broker: 30 hours of classroom instruction and 1 year experience as RE Salesperson, actively associated with licensed broker
Salesperson: 24 hours of classroom instruction

Status: Before the Joint Committee on Consumer Protection & Professional Licensure.
Action Needed: Strongly urge your legislators to vote “YES” if this bill comes up for a vote.

Real Estate [Continuing Ed.], H.3651: SUPPORT

Currently, Real Estate Brokers & Salespersons must receive 12 hrs. of classroom instruction in order to be able to renew their license, which is less than approximately half of the other states. With the exception of New Jersey, every state in the United States requires real estate licensees to earn continuing education in order to maintain their real estate license. The commitment to provide a high level of professional services by securing and building up a strong educational foundation on an annual basis is a positive step both for real estate licensees and the consumers they serve throughout the Commonwealth.

H.3651 seeks to increase the Continuing Professional Education requirement up to no less than 20 hrs per 2-year cycle.

Status: Before the Joint Committee on Consumer Protection & Professional Licensure.
Action Needed: Strongly urge your legislators to vote “YES” if this bill comes up for a vote.

Abandoned Property Registry/Copper Pipe Theft Prevention, H.2218: SUPPORT

Vacant houses are an increasing concern in many communities of the Commonwealth. Many fall into disrepair, attract crime, and create safety issues in neighborhoods down with them. Further, metal piping and other fixtures are harvested from the structure, thus making its title unmarketable for mortgage loan qualification purposes. And the problem, brought on by the foreclosure crisis, is becoming widespread.

H.2218 seeks to halt and reverse this problem with a 2-prong approach:

• State Abandoned Housing Registry: The primary difficulty in ensuring that vacant properties are kept in decent condition lies in the difficulty in locating their owners, who are responsible for keeping their property up to Code and preventing it from becoming a public nuisance. In response to the growing foreclosure/vacancy problem, some cities have enacted local ordinances requiring the registration of vacant properties. However, there is no state law with a single, unified Registry.
  
  H.2218 creates a 2-year pilot program establishing a state-wide vacant and foreclosed property registry housed within the Attorney General’s Office that will require all property owners, including lenders, trustees and service companies, to register and properly maintain vacant and foreclosed properties.

• Licensing Scrap/Junk Dealers: Vacant houses are easy prey for copper thieves. When the piping … including gas lines … is ripped out of a house, it loses significant value, and banks are unable to grant conventional mortgage loans for such a property. What makes the copper theft problem difficult to cure is the fact that the thieves rapidly liquidate their booty through scrap/junk dealers who, under the current statutory framework, are not required to keep such records as would help law enforcement to shut down this criminal enterprise.
• H.2218 seeks to create a state-wide “Second Hand Metal Registry.” This registry will assist in revitalizing our neighborhoods by providing law enforcement with sufficiently detailed transaction information to keep scrap metal thieves out of business and out of houses, helping to ensure that vacant properties will be sold and re-occupied sooner than later.

Status: Before the Joint Committee on Public Safety & Homeland Security.
Action Needed: Strongly urge your legislators to vote “YES” if this bill comes up for a vote.

Real Estate Transfer Taxes, S.1316; S.D.632: OPPOSE

The Massachusetts Association of REALTORS® strongly opposes S.1316 & S.D.632, two bills that would authorize the creation of a new transfer tax on the sale of property in the communities of Martha’s Vineyard and Nantucket.  MAR believes that the imposition of this type of new sales tax on homes could have serious implications for the Massachusetts economy and set the wrong precedent for the Commonwealth’s tax policies.  If passed, other Massachusetts communities facing budgetary issues and needs may seek similar authority to solve local revenue problems. 

Martha’s Vineyard and Nantucket seek to create funding for affordable housing. However, MAR sincerely believes that creating an “entrance or exit fee” to homeownership is the wrong way to solve this problem. No matter how well-intentioned, transfer taxes would increase the bottom-line price of many homes by thousands of dollars. MAR believes that the fact that these bills single out home sellers over a certain price (roughly all homes exceeding the median home price in each community) to subject them to this new tax only further exemplifies the inequitable nature of this taxing scheme. REALTORS® oppose real estate transfer taxes for the following reasons:

• Discriminatory: The proposed tax scheme is inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community wide need/responsibility.
• “Equity Stripping:” It is important to remember that, unlike a home purchase which can be financed, payment of a sales tax can’t be financed.  Such a tax would cost thousands of dollars due at closing from the buyer or taken from the seller’s proceeds.  In some ways, a transfer tax can be looked at as a type of municipal “equity stripping” of the value of one’s home.
• Prop 2½: The tax would subvert the voter approval process inherent in a Proposition 2-1/2 override in which voters can decide themselves whether to increase their own property taxes.
• Unstable Revenue Source: The real estate market is highly sensitive to economic downturns; this tax would provide an unstable source of revenue for a current and ongoing community need.
• Barrier to entry: The tax is exclusionary because it would increase the cost of home ownership and in effect create an additional barrier to entry for an already expensive part of the state.

Status: S.1316: Before the Joint Committee on Revenue; S.D.632: Reference pending.
Action Needed: Strongly urge your legislators to vote “NO” if these bills come up for a vote.

SCOPE (Selling City Owned Property Efficiently), H.3474, S.768: SUPPORT

This bill would give municipalities the option of selling municipally owned vacant and underutilized properties on the open market and get them into the hands buyers through a simplified and cost effective process.

In many cases these vacant and abandoned units detract from the quality of neighborhood life and, instead of generating property tax revenues, these properties create a drain on community resources and services.

This proposal for an alternative approach will provide municipalities with the ability to choose a market driven sales program using locally knowledgeable real estate brokers while at the same time, provide a clear and predictable path for the municipal seller, the broker, and the buyer.

By providing municipalities with this option, they will be able to access the network of independent private sector real estate brokers and agents to supply the marketing and brokerage services that most buyers and sellers have come to depend upon to help address their housing and real estate needs.

Status: Before the Joint Committee on Municipalities & Regional Government.
Action Needed: Strongly urge your legislators to vote “YES” if these bills come up for a vote.

Home Rental Tax, H.2940, H.3486: OPPOSE

The new tax will create requirements on property owners that were never intended for seasonal or second homeowners.

An owner who contemplates renting his or her home for less than 90 days would be required to register with the Department of Revenue (DOR) for a period of three years. This was always intended to be a requirement for established businesses, not seasonal homeowners; hence the term “Hotel/Motel Tax.”  Registration with the DOR would carry the obligation to file a monthly report of income from the property for three years, even if the property has not been rented, there is no such income, and no tax is due.

This proposal would create a new tax on all property owners who choose to rent their homes for a short term (under 90 days.)  In addition to established businesses like hotels, motels and bed and breakfasts a city or town could levy a room occupancy tax on any apartment, single or multiple family housing, cottage, condominium and timeshare unit.  Further, these property owners are not set up to meet the accounting requirements for room occupancy taxes.

The new tax would create substantial tax reporting and accounting problems for hundreds of home owners, many of whom may not live in town and therefore would be unable to vote on a matter that directly affects them.

Many vacation home owners are seasonal residents and rent their properties to cover the costs of other local, state and federal taxes. These individuals pay full property taxes just like year-round residents, yet utilize virtually none of our municipal services, such as schools, libraries, etc. Enacting this kind of tax will discourage purchases of short term rental properties, especially those who need the income to cover the expenses of the property.

Once enacted by cities and towns this tax will impose up to an additional 9.7%excise tax (5.7% for the state and up to 4% for a city or town) on short term rentals of properties described above. While all cities and towns need additional revenue there is a process in place for raising taxes if necessary to support municipal services:  a Prop 2 ½ override.  It is unfair to subject property owners who engage in rentals for ninety days or less to the rigors of established businesses to support a city or town.

It is possible that many seasonal property owners will choose not to rent their properties anymore as the accounting requirements are simply too high a burden. For a community whose restaurants, galleries, and attractions derives significant revenues from thousands of visitors who utilize short term rentals, this tax will negatively impact these revenues as it will prevent visitors from visiting as seasonal rentals will not be available to them.

Budget gap from diminished compliance will hamper provision of local services. The town is likely to incur a budget gap between projected and actual revenues, in light of inability for many property owners to comply, and the choice that some homeowners may make, to simply not rent their home at all.

The tax cannot be enforced fairly and equitably due to auditing difficulty. Compliance problems would be exacerbated, thereby resulting in inequitable and unfair enforcement, by the difficulty in auditing taxpayers who are either not business entities, or, if made business entities by operation of this tax, not traditional business entities with all relevant trappings. If they are to be made “business entities,” this could create zoning issues in some towns.

When faced with the imposition of this tax, many homeowners who rent may simply not report their rental income, creating an underground economy. Some homeowners will “go underground” to avoid the tax and only the law-abiding taxpayers will be shouldering the burden of this tax.

Status: Before the Joint Committee on Revenue.
Action Needed: Strongly urge your legislators to vote “NO” if these bills come up for a vote.

Move and Store/Warehousing, H.1425, S.1791: SUPPORT

MAR supports this legislation which seeks to clarify a landlord’s obligation to pay for the cost of moving and storing their tenant’s property in an eviction proceeding. This bill would require that the storage facility used by the landlord be fully bonded, be within the Commonwealth and be within 20 miles from the location where the property is being removed.

This bill brings fairness and equity back into the eviction process. Recent changes to the eviction law in Massachusetts, while safeguarding the rights of tenants, have created a confusing procedure for moving and storing a tenant’s property.

Status: Before the Joint Committee on Judiciary.
Action Needed: Urge your legislators to vote “YES” if these bills come up for a vote.

Housing Production, H.1227: SUPPORT

This bill seeks to prohibit city/town from restricting rates of development or issuance of building/special permits within specified time-frames, absent showing of specific circumstances and concerns to which such growth rate restriction constitutes a reasonable response.

A city or town must supplement special restriction with strategic plan to resolve relevant concern(s) that supported the restriction.

Special growth restrictions terminate after 1 year, but can be extended by local legislative body with report and recommendation of Planning Board.

Status: Before the Joint Committee on Housing.
Action Needed: Strongly urge your legislators to vote “YES” if this bill comes up for a vote.

Frequently Asked Questions About the REALTORS® Political Action Committee (RPAC)