Location:
HOUSING;
Scope:
Connecticut laws/regulations;

OLR Research Report


HOUSING 2009

Kristin Sullivan, Principal Analyst

2011-R-0475

December 20, 2011

NOTICE TO READERS

This report summarizes Public Acts that affect housing passed in the 2009 regular and special sessions. We do not summarize all provisions of each act. Consequently, we encourage readers to obtain full texts of the acts that interest them online at www.cga.ct.gov, or from the State Library or the House Clerk's Office. Complete analyses are on our webpage (www.cga.ct.gov/olr).

Table of Contents

energy assistance 4

Operation Fuel 4

Weatherization Program for Low-Income Households 4

housing development incentives 5

Enterprise Zones Property Tax Exemptions 5

Housing Incentive Grants 5

Redeveloping Mills on Certain Brownfields 5

Registration System for Certain Uninhabited Dwellings 6

miscellaneous 6

Access to Utility Meters 6

Document Recording Fees 6

Fire Insurance and Certain Terrorism Policies 7

Hearings under Certain Rental Assistance Programs 7

Managed Residential Communities (MRCs) 8

Nursing Home Bill Of Rights 8

Registration System for Certain Uninhabited Dwellings 8

mortgages and foreclosure 8

Mortgage Practices 8

Mortgage Lenders, Brokers, and Originators 9

Secure and Fair Enforcement for Mortgage Licensing (S.A.F.E.) Act and the Foreclosure Mediation Program 9

Real estate 10

Residential Condition Report 10

Time Shares 10

Supportive housing 11

Next Steps Initiative 11

Supportive Housing for Families Program 11

ENERGY ASSISTANCE

Operation Fuel

PA 09-2 ( 3) requires the unspent balance of $8.5 million appropriated in a 2008 act from the FY 08 General Fund surplus to be carried forward and available in FY 10 for an emergency energy assistance program established in the 2008 act (PA 08-1, August Special Session).

The 2008 act appropriated the funds to the Office of Policy and Management (OPM) to expand Operation Fuel, Incorporated to provide emergency home heating assistance between November 1, 2008 and April 30, 2009 to Connecticut households with incomes between 150% and 200% of the applicable federal poverty level. Operation Fuel, Incorporated is a nonprofit organization that serves people who are not eligible for publicly funded energy assistance.

PA 09-3 ( 31) requires the unspent balance of the $8.5 million appropriation to OPM that was carried forward to FY 10 in PA 09-2 for Operation Fuel, Incorporated to be available between July 1, 2009 and June

30, 2010. (PA 09-5, September Special Session ( 82) specifies that assistance can be provided

regardless of whether these fuels are a household's primary or secondary energy sources.)

EFFECTIVE DATE: Upon passage

Weatherization Program for Low-Income Households

PA 09-2 ( 27) repeals a $2 million appropriation from the FY 08 surplus to fund a weatherization program for low-income households that participate in the Connecticut Energy Assistance Program. The program, administered by the Department of Social Services (DSS), was required to give priority to helping households with incomes below 200% of the federal poverty level and to coordinate assistance with weatherization assistance programs for low-income households administered by municipal electric utilities and utility companies under programs overseen by the Energy Conservation Management Board and the Fuel Oil Conservation Board.

EFFECTIVE DATE: April 1, 2009

HOUSING DEVELOPMENT INCENTIVES

Enterprise Zones Property Tax Exemptions

PA 09-93 changes the criterion under which property owners qualify for a property tax exemption when they improve homes, apartments, condominiums, and other types of residential property in the state's 17 enterprise zones. By law, municipalities must exempt a portion of the property's assessed value attributed to the improvements over seven years.

Property owners who improve rental units or convert them into condominiums must rent or sell them, respectively, only to people meeting an income criterion. Under prior law, they had to rent or sell the units to people earning no more than 200% of the municipality's median family income. Under the act, property owners must rent or sell the units to people earning no more than 200% of the median income for the area in which the municipality is located, as determined by the U. S. Department of Housing and Urban Development. (PA 09-234 ( 3) makes the same changes.)

EFFECTIVE DATE: Upon passage

Housing Incentive Grants

PA 09-7 ( 53), September 2009 Special Session, authorizes grants to municipalities that designate housing incentive zones and issue building permits for housing units to be built in these zones. Under prior law, the grant for designating zones was $2,000 for each unit that could be built on developable land in the zone. The building permit grant was $5,000 for each single-family detached unit and $2,000 for each multifamily, duplex, and townhouse unit. The act changes these flat per-unit amounts to maximum per-unit grants and authorizes the OPM secretary to determine the amounts up to the authorized maximums. The law specifies the criteria for designating zones and the process for obtaining the grants.

EFFECTIVE DATE: Upon passage and applicable to grant payments beginning with those issued in FY 09.

Redeveloping Mills on Certain Brownfields

PA 09-234 ( 1) makes it easier for state agencies to use or allow others to use mills on contaminated floodplain sites. By law, an agency cannot implement or assist any type of project in a floodplain without certifying to the DEP that, among other things, the project promotes long-term nonintensive uses and does not encourage new development in the floodplain by constructing or extending utilities needed to support that development. The act exempts the agency from having to certify that the proposed use meets this condition if it can show that, among other things, residential dwellings or other critical activities are above the 500-year flood elevation. If the agency cannot show that the project meets this and other criteria, it may, as under existing law, apply to the commissioner for an exemption from the certification requirement.

EFFECTIVE DATE: Upon passage

Registration System for Certain Uninhabited Dwellings

PA 09-144 creates a registration system for tracking the owners of uninhabited one- to four-family dwellings obtained by strict foreclosure or foreclosure by sale. It specifically allows municipalities to enforce against a registrant any provision of the statutes or municipal ordinance on the repair or maintenance of real estate after the municipality has provided notice and an opportunity to remedy the situation.

EFFECTIVE DATE: October 1, 2009

MISCELLANEOUS

Access to Utility Meters

PA 09-31 requires owners of residential buildings to give utilities and heating fuel dealers access to meters and other facilities located on their premises. It subjects the affected parties to sanctions if they do not, including being held responsible for their tenants' utility bills. The act also establishes verification requirements for the termination of residential utility service. These provisions apply to services provided by utility companies, municipal utilities, and competitive electric suppliers.

EFFECTIVE DATE: July 1, 2009

Document Recording Fees

PA 09-229 makes temporary changes to a funding stream for housing and other specified activities. It temporarily increases, from $30 to $40, the fee people must pay to town clerks for each document recorded in municipalities' land records (from the effective date until July 1, 2011). It renames the “Land Protection, Affordable Housing and Historic Preservation Account,” (a separate, nonlapsing account in the General Fund) the “Community Investment Account” and requires town clerks to remit $36, rather than $26, to it.

Under prior law, document recording fee revenues had to be distributed equally and quarterly to support Connecticut Commission on Culture and Tourism (CCCT), CHFA, Department of Environmental Protection (DEP), and Department of Agriculture (DOAG) programs. Each entity received 25% of the funds for specific purposes. From the effective date until July 1, 2011, the act decreases, from 25% to 20%, the shares for CCCT, CHFA, and DEP programs and increases, from 25% to 40%, DOAG's share. It requires the new DOAG funds to go into an Agricultural Sustainability Account.

EFFECTIVE DATE: Upon passage

Fire Insurance and Certain Terrorism Policies

PA 09-164 makes numerous changes to the standard fire insurance policy that insurers, by law, must write in Connecticut. Specifically, it shortens the time an insurer has to pay a claim from 60 to 30 days and increases the statute of limitations for filing a lawsuit relating to a claim from 12 to 18 months after sustaining a loss. Additionally, the act allows an insured person and the insurer to agree in writing to a partial claim payment in advance of final claim adjudication and requires an insurer to reduce the total amount due to an insured by the amount of any advance partial payment made.

Under prior law, commercial risk insurance policies, including those issued to a condominium association, could exclude coverage for losses caused, directly or indirectly, by terrorism (1) if the premiums charged for the policy reflected projected savings from the exclusion and (2) until the terrorism risk program established under federal law expires. The act instead requires a condominium association's master insurance policy to include coverage for losses caused by terrorism if the condominium was formed after 1976. It still permits other commercial risk insurance policies, including those issued to a condominium formed before 1977, to exclude the coverage, subject to the two conditions.

EFFECTIVE DATE: October 1, 2009

Hearings under Certain Rental Assistance Programs

PA 09-118 gives individuals in the rental assistance and transitionary rental assistance programs aggrieved by decisions of the DSS commissioner or his or her designated agent the right to (1) a hearing in accordance with the Uniform Administrative Procedure Act and (2) appeal final decisions to Superior Court. Under prior law, these individuals could request an informal hearing and a subsequent desk review to appeal DSS decisions to deny, modify, or terminate program assistance. But, because DSS was not statutorily required to hold formal hearings, individuals were unable to appeal final decisions.

EFFECTIVE DATE: October 1, 2009

Managed Residential Communities (MRCs)

PA 09 - 3 ( 42 and 61), September Special Session, eliminates (1) the requirement that MRCs be subject to Department of Public Health (DPH) oversight and regulation and (2) DPH's responsibility to investigate complaints about MRC violations of the law and review each MRC's operations every two years. But it retains DPH's authority to adopt regulations governing MRCs and the requirement that MRCs comply with them. MRCs are facilities that provide housing and services for people over age 55, including access to assisted living services.

Nursing Home Bill Of Rights

The state's nursing home patients' bill of rights gives patients entitled to receive Medicaid the specific right to have the nursing home or chronic disease hospital not charge, ask for, accept, or receive any gift, money or donation in addition to Medicaid payment as a condition of admission, expedited admission, or continued stay at the facility. PA 09-168 adds third-party payment guarantees to this prohibition and extends this right to all patients, not just those entitled to receive Medicaid.

EFFECTIVE DATE: October 1, 2009

Registration System for Certain Uninhabited Dwellings

PA 09-144 creates a registration system for tracking the owners of uninhabited one- to four-family dwellings obtained by strict foreclosure or foreclosure by sale. It specifically allows municipalities to enforce against a registrant any provision of the statutes or municipal ordinance on the repair or maintenance of real estate after the municipality has provided notice and an opportunity to remedy the situation.

EFFECTIVE DATE: October 1, 2009

MORTGAGES AND FORECLOSURE

Mortgage Practices

PA 09-207 makes several changes affecting mortgage practices. Among other things, it:

1. creates the crime of residential mortgage fraud;

2. modifies the interest rate that makes a home loan “nonprime”;

3. extends, by one year, the banking commissioner's authority to adjust interest rate parameters for nonprime loans;

4. allows the commissioner, under certain conditions, to deem mortgage professional license applications abandoned and keep the application fee; and

5. applies a prohibition against increasing the interest rate after default to all, rather than just high cost, residential mortgage loans.

Under the act, a person who commits a single act of residential mortgage fraud is guilty of a class D felony, while a person who commits two or more acts is guilty of a class C felony.

Mortgage Lenders, Brokers, and Originators

By law, a mortgage originator's license is tied to the broker or lender with whom the originator is associated and the license is not effective when the originator is not associated with the lender or broker. PA 09-208 specifies that the mortgage originator's license is also not effective when the associated lender or broker's license is suspended.

The act also specifies that lender, broker, and originator licenses must be surrendered, revoked, or suspended in accordance with the banking statutes, rather than the sections applicable to these specific licensees.

EFFECTIVE DATE: Upon passage

Secure and Fair Enforcement for Mortgage Licensing (S.A.F.E.) Act and the Foreclosure Mediation Program

PA 09-209 implements the 2008 federal S.A.F.E. Act by imposing additional conditions on licensing for mortgage professionals, including education and testing. It also changes the process for determining eligibility for the Emergency Mortgage Assistance Program (EMAP) by (1) allowing the Connecticut Housing Finance Authority (CHFA) to determine what constitutes a significant reduction in a borrower's income and (2) expanding the circumstances that constitute a financial hardship beyond a borrower's control and changing some of the conditions for repayment. The act expands eligibility for the CT FAMILIES refinancing program from homeowners with adjustable rate mortgages to include those with fixed-rate mortgages.

The act also makes changes to foreclosure laws. Principally, it:

1. makes the foreclosure mediation program mandatory, rather than optional, for actions with return dates on and after July 1, 2009;

2. specifies that no judgment of strict foreclosure or foreclosure by sale can be entered before July 1, 2010, unless the mediation period has expired or otherwise terminated, whichever is earlier, or the mediation program is not otherwise required or available;

3. specifies that a lender cannot be awarded attorney's fees for time spent in the first mediation session if the lender does not appear in person or obtain proper authority for its attorney to appear instead, unless the court finds such award reasonable; and

4. allows judgments of strict foreclosure to be opened after title has become absolute under certain circumstances.

EFFECTIVE DATE: July 1, 2009, except (1) CT FAMILIES provision is effective on passage and (2) the provision on opening strict foreclosure judgments and certain technical and conforming changes are effective October 1, 2009 (PA 09-219 makes the EMAP provisions effective upon passage).

REAL ESTATE

Residential Condition Report

The law requires a real estate seller to give a prospective purchaser a residential condition report before the binder or contract is executed in any residential real estate transaction (i.e., sale, exchange, or lease with option to buy). PA 09-127 requires the Department of Consumer Protection (DCP) commissioner to adopt regulations to set forth the current form for the report. By law, the report must disclose any municipal assessments on the property, including sewer or water charges. The act also requires the report to include information concerning (1) leased items on the premises, including propane tanks, water heaters, major appliances, and alarm systems and (2) whether the real property is located in a designated historic zone.

EFFECTIVE DATE: Upon passage

Time Shares

PA 09-156 replaces the prior, more limited time sharing plan laws with more detailed provisions. It establishes requirements for the sale and management of time shares, including, among other things, advertising, insurance, escrow, assessments, and various disclosures to prospective purchasers and owners. It specifies which of its provisions apply to out-of-state time shares.

The act also provides a variety of exemptions from its requirements, including for any time share property established in Connecticut before January 1, 2010. These properties remain subject to the state laws and regulations in existence on December 31, 2009.

EFFECTIVE DATE: January 1, 2010

SUPPORTIVE HOUSING

Next Steps Initiative

PA 09-7 ( 20), September Special Session, authorizes funds to (1) provide rental assistance and services for the Next Steps Initiative's Round 3 development projects and (2) pay for debt service on the bonds issued to finance the projects. Specifically, for Round 3 development projects the act authorizes up to:

1. $264,000 of the funds appropriated to DSS during the current biennium under PA 09-3, June Special Session, for Homeless/Housing Services;

2. $510,000 in FY 10 and $1 million in FY 11 of the funds appropriated to the Department of Mental Health and Addiction Services under PA 09-3, June Special Session, for Housing Supports and Services; and

3. $1 million of the funds appropriated to the treasurer to pay debt service under PA 09-3, June Special Session, during the current biennium.

The act requires any of these authorized funds that are not used for Round 3 to be used for other rental assistance and services for new scattered site supportive housing.

EFFECTIVE DATE: Upon passage

Supportive Housing for Families Program

PA 09-3 ( 46), June Special Session, requires the Department of Children and Families (DCF) to prioritize enrollment in its Supportive Housing for Families program after October 1, 2009 to maximize (1) the number of families with a child in an out-of-home placement who are likely to be reunified because of their participation in the program or (2) the number of families remaining together. It requires the DCF commissioner to report to the Appropriations and Human Services committees by January 1, 2010, on how the department will use funding for the program. The report must include the number of (1) families the program serves and (2) children expected to be reunited with their families during FY 10 and FY 11 because of efforts to give priority to families with a child placed outside the home that are undergoing reunification.

EFFECTIVE DATE: Upon passage

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