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Officials brief council committee on state change limiting municipal claims on foreclosure surplus
Summary
Lawrence City officials told the Ordinance Committee on March 11 that changes to Chapter 60 of Massachusetts law effective Nov. 1, 2024, require municipalities to act more quickly after foreclosure to identify and, if required, return surplus equity to former owners.
Lawrence City officials told the Ordinance Committee on March 11 that changes to Chapter 60 of the Massachusetts law governing collection of real estate taxes — effective Nov. 1, 2024 — alter how municipalities must handle surplus equity when a property is foreclosed for unpaid taxes.
David Coppola, an attorney representing the treasurer-collector’s office, described the change as a response to a 2023 U.S. Supreme Court decision in a Minnesota case. Under the revised Chapter 60, municipalities that foreclose must notify former owners within 14 days whether the city intends to retain a property for municipal use or sell it. If the city chooses to retain the property and the appraisal shows surplus equity above outstanding obligations, the municipality must pay that surplus to the former owner if it wishes to keep 100% of the property’s equity. If the city chooses to sell, it must list the property with a licensed realtor and, if unsold after 12 months, may proceed to auction.
Why it matters: The shortened timeframes require quicker administrative and council decisions after a foreclosure judgment enters. City officials said the administration will bring recommended dispositions to the council in advance to meet statutory notice deadlines.
What the committee heard: Attorney Coppola said the city forecloses on roughly five properties per year and had about 15 foreclosures in the prior three years; those foreclosures predated the statutory change. Officials said the administration will follow current procedures but will add faster internal review and earlier council votes so the city can meet the 14-day notice requirement. The administration requested that councilors treat the presentation as informational; the committee voted to forward the material to the full council as a committee report.
Next steps: The administration will notify the council when specific foreclosed properties approach judgment so the council can vote whether the city will retain or list a property for sale, and staff said they will email councilors with a current inventory of city-owned and surplus properties.
