OPERATING ISSUESFOR

MUNICIPAL AFFORDABLE HOUSING TRUSTS

Kathleen M. O’Donnell, Esq.www.kathleenmodonnell.com

kmeodonnell@verizon.net

Where to Start?Read the Warrant Article and the By-Laws

adopted under the ArticleDo you have a Declaration of Trust?How many Trustees do you have?What other Town Offices do they hold, if any?Is there a good reason to have all of the

Selectmen serve as Trustees?

Trust DocumentsDeclaration of Trust - Why do you need one?

What does it cover?Name of the TrustPurposesTenure of TrusteesMeetingsPowers of TrusteesActs of Trustees – how many do you need to signLiability – can’t bind the TownAmendmentsAccountsDuration – indefinite Trustees Certificates as evidence of authority

Trust DocumentsRecord Declaration of Trust or Trust

Certificate at Registry of DeedsTrustees should be appointed and a Trustees’

Certificate recorded at the Registry of Deeds

Internal OperationsElect Chair of Board of TrusteesElect SecretaryAccounting:

Statute does give Trust the authority open your own account but – usually -

Use the Town’s Treasurer and Town accountsEstablish protocols for reports from Treasurer

to Trust to include updates on expenditures from Trust funds

Internal OperationsMinutes Open Meeting Law requirementsE-mail warningsPosting agendasApproved minutes, accounting, and votes

should be maintained where??

Working with Other Boards and CommissionsBoards of SelectmenCommunity Preservation CommitteeHousing AuthorityHousing CommissionIf the Trustees come from these entities, and

they should, be sure that the Trustee remembers which hat he/she is wearing when making a decision

Working with AdministrationIs Town Administrator/Manager an ex officio

member of the Trust?Town Treasurer – need good working

relationship if you expect timely, accurate, reports

Do you have access to Town Counsel? Should you use Town Counsel

Uniform Procurement Act – Requests for Proposals

Funding SourcesMoney from inclusionary zoning40B paymentsTax lot sales – need cooperation of Treasurer

to limit sales to affordable housing purposesCommunity Preservation ActGifts and donations – in kind or in cash

Form 8283Gift acknowledgement

Working with CPA FundsProposals to CPCGrant Agreements – what are they and why

you should have oneTerms:

Description of project or general grant?Amount of grant – how and when are funds

delivered to TrustReporting requirements?Restriction required in return for funds?

Compliance with Uniform Procurement Act?

Tasks

Review existing Housing Plan for opportunities for development

Consider use of funds as leverage for access to other funding sources

Establish guidelines for expendituresfor example - $150k per housing unit

Use of funds for local housing needs, not necessarily for units on the Subsidized Housing Inventory

EXAMPLES OF TRUST ACTIVITIESPurchase land for affordable housingAcquire town owned parcels through transfer

by town meeting vote or purchase at tax title auction

Purchase restrictions on private construction projects

Provide financing to non-profit developers in return for mortgage or additional affordable units

EXAMPLESDownpayment Assistance Program - Provide

funds to cover gap between market sale price and affordable price in return for deed rider

Research potential zoning changes to allow development of affordable housing on grandfathered lots

EXAMPLESAllow accessory units through special

permitsAllow mixed use in commercial districts

through special permitsInclusionary zoningForeclosure prevention assistance through

short term loans

Closing RequirementsPurchase – Uniform Procurement Act (c. 30B

Section 16) – can file uniqueness determination with Central Register

Disposition – no exemption for uniqueness – must comply with c. 30B

File Disclosure of Beneficial Interests (c. 7 Section 40J) with DCAM

Don’t forget the IRS – need to file 1099S reporting the sale, obtain affidavit from seller that he/she is not a foreign person subject to backup withholding (FIRPTA)