Highlights and Notes from the August 5, 2014 MAR Government Affairs Meeting

 

Berkshire County has two members holding seats on the MAR Government Affairs Committee.  Mark McIlquham holds the appointed seat for Berkshire County, and Anne Meczywor was appointed chair of the committee, after having served on it the previous five years.  MAR’s legal team of Mike McDonagh, Ashley Stolba, and Justin Davidson (a Lee native!), and MAR staff member Christine Howe each gave updates on issues that are critical to MA REALTORS.

 

 

Mike McDonagh shared the following with the committee regarding State Issues/Legislation/Regulations:

 

2014 Public Policy and Property Rights Advocacy Award:  Susan Renfrew of Greenfield and neighboring board, Realtor Association of Pioneer Valley, was recognized at REALTOR Day on Beacon Hill for her tireless efforts on behalf of our members and private property rights.  Susan is immediate past chair of NAR’s State and Local Issues Committee and was the 2008 President of MAR.

 

Land Use Reform – H.1859/H.4065         MA REALTORS recognized that our land use laws and regulations need to be updated and streamlined, but the bill as written was flawed. This legislation did nothing to prevent municipalities from continuing the practice of imposing arbitrary and ad hoc mitigation requirements on development—a practice that hinders and burdens the development of needed housing and commercial growth.  The authority for municipalities to impose mandatory inclusionary zoning requirements on individual developments does so without providing density bonuses or other incentives. Finally, the bill’s elimination of the simple and cost-effective Approval Not Required (ANR) process, which would make it more expensive and complicated to undertake the development of new lots with frontage on existing roads. At the end of the session, the bill was defeated as written, a win for MAR.  It is likely the bill will be refiled, but the overall outlook is that input from MAR will be sought to correct these issues.

 

Condo Bill – A bill is proposed to toughen a law governing condominium boards so condo owners would have better access to basic financial information. Current rules require condo associations to make insurance policies, balance sheets, and other documents available to homeowners, but there currently are no penalties for failing to comply. Movement on this bill may happen informally while the legislature is not in session.

 

Foreclosure Title Clearing – This bill has passed both houses and is awaiting the Governor’s signature. This bill serves to end uncertainty for homeowners who have purchased homes that previously were foreclosed, creating clouds on title.  There were many foreclosures that were not done properly, and the former owners have sued successfully to reclaim their properties. This bill starts a three year clock ticking for previous owners of foreclosed homes to make claims. After the three year window, the previous owners can still sue lenders for damages, but the home’s new owners will not be subject to damages or potential loss of their homes.

 

Flood Insurance Bill – passed and signed.  In MA, flood insurance can now only be REQUIRED by lenders on the outstanding balance of a mortgage, rather than the entire value of a home.  Homeowners are still encouraged to look into fully insuring their homes, but the requirement to do so is removed, substantially reducing the financial burden for many. (Note: Federal Flood Insurance Legislation is discussed later.)

 

ROOM OCCUPANCY TAX BILL DEFEATED…..AGAIN – Periodically, bills are proposed to allow Massachusetts municipalities to collect a tax on seasonal home rentals.  The true targets of such a measure are former hotels turned seasonal rentals on the coast, but would almost certainly affect all towns with large numbers of seasonal rentals such as the Berkshires.  Issues arise regarding enforcement, accountability of homeowners, and affordability to homeowners who rely on short term rental income.  This bill is highly likely to appear again in the future.

 

Division of Professional Licensure – Mostly “housekeeping” issues were addressed in this action that affected many other categories of licenses outside of real estate.  One section affects our industry.  Expired licensees can now reinstate their licenses to active status by paying back fees equal to NO MORE THAN two years of fees.

 

Scrap Metal – The issue of trying to stem the theft of copper pipes and wire from unoccupied homes suffered a setback with the defeat of a bill that would have required scrap metal dealers to exercise greater care in acquiring inventory.  ID’s of sellers would be required, and metal would have to be held by the dealers for a period of time in case authorities needed to look for stolen property.  Opposition to this measure sited added cost of holding as metal prices fluctuated day to day, as well as privacy issues.  This bill is likely to be refiled and compromise is expected.

 

Disclosure Regulations for SuperPACs – Individuals can now contribute up to $1,000.  The top five contributors to any SuperPAC must be disclosed.  The newly approved Massachusetts Realtors IEPAC will not be affected as contributions come from NAR and that is always FULLY disclosed.

 

License Plates – A law reducing the number of license plates needed to start production was defeated after “unknown” reservations were expressed by the state police.  Efforts are underway to determine what their objections are so they can be addressed and move this bill forward ASAP.  Once in production, the Welcome Home plates would be an effortless, ongoing fundraiser for the MAR Charitable Foundation, which is very active granting charitable funds across the entire state.

 

Independent Contractor Status – A decision is expected at the end of this year or very early next in Monell vs Boston Pads. In this suit, the status of two agents is being debated as employees (which would entitle them to specific pay and benefits) as opposed to independent contractors.  If found to be employees, the effects on our real estate industry could be far reaching.  http://massrealestatelawblog.com/tag/monell-v-boston-pads-llc/

 

 

Local Issues were covered by Ashley Stolba:

 

Springfield Rental Ordinance – An ordinance is proposed to require owner registration and city inspections of all rental units.  The opposition to the proposal is the potential damage to the fragile, recovering multi-family market, penalizing good owners who play by the rules, inefficient use of limited city resources, and the imposition of significant time and financial costs to implement registration and initial inspection of 8,000 multifamily properties and over 30,000 units.  The proposed registration fee is $25 per unit with an annual renewal fee of $15.  The ordinance would also require an initial inspection of the units with a $10 fee per unit.  Regulations are already in place to regulate the condition of rental properties in the city.

 

Gas Pipeline Updates – Disclosure remains the primary issue as valid arguments are being presented from both sides of the pipeline issue.  It was noted that several legislators and town councils have come out in opposition to the pipeline.  It has been proposed to look into the creation of a disclosure form for sellers and buyers, but the concern is in having yet another form for clients and customers to sign, perhaps adding to confusion rather than clearing things up.  Another suggestion was that the state forms committee look into adding wording to existing disclosure forms to make them multipurpose, and encouraging the consumer to completely investigate areas of concern.

 

 

Justin Davidson reviewed Federal Issues/Legislation:

 

Terrorism Risk Insurance Reauthorization Act – The act, originally approved in 2002, is set to expire at the end of 2014.  This insurance is critical to securing financing in commercial real estate.  Inability to insure could easily harm the extremely fragile commercial real estate market.  Without TRIA, insurance providers may exclude terrorism from property coverage and some firms many decline to rate or cap their ratings on Commercial Backed Mortgage Securities transactions.  TRIA keeps coverage available and affordable, and does not cost the taxpayer.  Waiting until the last minute to reauthorize will cause unnecessary uncertainty in commercial markets.

 

Preserving Real Estate Tax Related Policies – With Congress in its current inactive state, and with elections on the horizon, little movement is expected to remove the Mortgage Interest Deduction, Property Tax Deductions, and Mortgage Debt Forgiveness (taxing phantom “income” of the amount of a debt “forgiven” by a lender in a short sale).

 

National Flood Insurance Rates and Refunds – FEMA will begin October 1 processing refunds to homeowners who paid “excessive” rates that escalated suddenly with the reauthorization of the Federal Flood Insurance Program.  NAR will take an active role in monitoring FEMA’s work on the affordability of flood insurance.

 

FCC Open Internet Policy – Proposals have been made to redistribute the availability of bandwidth. Smaller companies (MANY real estate entities would be greatly impacted) would have broadband availability reduced, while large companies would be able to buy more.  MAR President Peter Ruffini sent a letter to the FCC commenting on the matter, emphasizing that we rely heavily on an “open internet access unencumbered by technical or financial discrimination.”  He urged “the FCC to adopt Open Internet rules that will protect against blocking, discrimination, access charges, and paid prioritization.”

 

Drones – The FCC has released its interpretation of model aircraft, including “drones”.  “(A) Realtor using a model aircraft to photograph a property that he (or she) is trying to sell and using photos in the property’s real estate listing does not constitute hobby or recreational use.”  This means that real estate professionals could be subject to FAA’s safety and designated airspace enforcement as well as future rulemaking. This would cover photos purchased from another photographer as well. Even if an amateur homeowner uses a drone to photograph their property, the real estate professional may not use that photo in a commercial manner, including the marketing of the home for sale or in promoting their business.

 

Dual Agency Agreements in FHA – As of mid-July, HUD is allowing the practice of dual agency in FHA pre-foreclosure transactions, which previously had been excluded.  The new guidance requires properties to be listed for at least 15 calendar days before any offers are evaluated.  After 15 days, all offers may be reviewed as they are received.  If multiple offers are received, the listing agent or broker must forward the offer with the highest net return to HUD and meets HUD’s criteria. These requirements must be implemented no later than October 1, 2014.

 

 

RPAC Contributions and Participation through July:

On behalf of RPAC Chair Sarah Gustafson, Christine Howe presented an update on RPAC.

 

Berkshire County is doing considerably better that it has in recent past years, but still lags badly in participation numbers compared to most of the other 15 local associations in the Commonwealth.  With only 17 of our members having invested, our members have voluntarily invested $3,926.63.  The dollar figure is 58% of our dollar goal, coming from several Fair Share contributions, and a few major investors.  The participation goal is what we should focus on.  Seventeen members is 4% of our membership. Six local associations have reached 25% or more of participation:  Pioneer Valley (27%), Newburyport (37%), Worchester (31%), New Bedford (29%), Plymouth and South Shore (28%), and Greater Boston (29%).  North Central and North Shore are at 24% of participation goal, Eastern Middlesex is at 20% and Cape Cod and Islands is at 14% of participation goal.  These boards range from much larger to significantly smaller than we are, so that’s why percentages of participation are noted, not head counts.

 

A Fair Share investment is considered to be $15 – $25.  A member has the option to designate that funds be applied only to ISSUES education and promotion use (NAR PAF) rather than RPAC, which may be distributed to the campaigns of candidates who consistently support REALTOR issues regardless of party affiliation.

 

A note from Anne:  “Given the large number of issues covered this month alone and how they impact our business, a Fair Share investment in RPAC or RPAF seems monumentally reasonable. All members are encouraged to assess how much these issues may have impacted their business this year, and consider contributing accordingly. We need to step up and invest, and not rely on the rest of the state to carry us financially in this way. MAR has been readily available to come to our assistance with policy and legislation support in the past, most recently with willingness to support us on bringing back the trains, as well as helping us fight Pittsfield’s attempt to make REALTORS partially responsible for vacant landlord-owned properties.  Is it fair to expect them to do that so willingly if we don’t step up?

 

I would be willing to organize a major investor fundraising event if a few more of us are willing to consider becoming major investors.  More importantly, I would be happy to speak to offices about the importance of RPAC with an eye to increasing the number of our members who contribute a voluntary Fair Share.  If you would like more information, please let me know.  If you have just written your $15 check to RPAF, please send to Sandy at the Board office ASAP, and accept my sincere thank you.”