Following a 10-year advocacy effort seeking greater protection for
homeowners, the Boston Bar Association today celebrated the signing of An Act
Relative to the Estate of Homestead by Governor Patrick.
"This is great news to the attorneys whose clients have come to them in dire
straits, overwhelmed with debt and seeking help to obtain a fresh start," said
BBA President Donald R. Frederico. "These homestead reforms are substantial and
will provide important consumer protections to homeowners in
Massachusetts. In addition to the consumer protection provisions, the bill
will address many issues that have caused great difficulty to the courts in
interpreting the current homestead statute."
When the new Homestead Legislation goes into effect in 90 days, March 16th,
2011, here are some of the things that it will do:
- Provide automatic protection to any primary residence up to $125,000
in equity in the home
- Clear up ambiguities and make rules for filing a
homestead declaration more logical
- Protect beneficiaries of
trusts
- Clarify that a refinancing mortgage will not be able to
terminate previously filed homesteads
- Protect proceeds from the sale
of a home or insurance
- Protect spouses and co-owners who
transfer property amongst themselves
- Extends homestead protection to
manufactured homes
Background:
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 very 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. While the BBA pushed for its own version of homestead
reform, other groups, most notably the Real Estate Bar Association (REBA), also
proposed their version of homestead reform. Senator Creedon 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 revised
and balanced bill that the two bar associations filed jointly in the
legislature.
The new law 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, we hope to see
progress on updating the personal property exemption laws.