A receivership, while it may be needed to repair bad conditions, can be one of those bad things that can turn into something good. When a landlord abandons a building or files for bankruptcy, tenants can organize, grab onto all the uncertainty in their situation, and make their homes better places to live.45
As a tenant, you may be able to work with your receiver to help motivate a bank to sell to a nonprofit organization at a below‑market price. Under both federal and state laws called the Community Reinvestment Act (CRA), the government requires banks to meet the credit and banking needs of low- and moderate-income people in the bank's "designated lending area."46 Tenants have used CRA to negotiate below‑ market loans in order to buy their buildings.
A tenant group can also become a nonprofit organization and try to purchase the building itself. There are resources to provide tenants with legal help and groups that help tenants develop strong, democratic, and effective organizations. For information about where to get legal services and tenant-organizing assistance, see the Directory.
You can also seek out local city officials from the Board of Health or the community development department to get their help in moving the banks to act responsibly in terms of providing financing on good terms.47 Local governments may have Community Development Block Grant funds which tenants can use to hire organizers, staff, and experts to help them purchase their building.48
When tenants have needed to act quickly to prevent their building from deteriorating, they have found strength in numbers.49 Organized tenants have successfully taken back their properties from irresponsible landlords and improved their living conditions. Where tenants have not acted quickly, vacancies and vandalism have become obstacles to getting tenant support and keeping a core group of tenants together. The more organized and united you are in demanding what you need, the more likely judges, banks, or government officials will be to respond with assistance. You have a right to a decent place to live.
Endnotes
45 . In Olde Holyoke Dev. Corp. v. Morales, Hampden Housing Court 90 SP 01291 H (July 3, 1990), the court held that, pursuant to St. 1965 c. 898, §4, as amended by St. 1968, c. 404, §1, after a receivership ends, for nine months following the receivership, the new owner was prohibited from terminating the tenancy without a reason. The reasonings of this decision would presumably also prohibit rent increases during this nine-month period.
46 . Community Reinvestment Act of 1977, as amended, 12 U.S.C. §§2901 et seq. The state community reinvestment law is found at G.L. c. 167, §14. For more about federal CRA history, regulations, and how to access CRA lending information, see the Federal Financial Institutions Examination Council website at www.ffiec.gov/cra/default.htm.
In the Cardona receivership (see endnote 36), a local community development corporation contacted the CRA compliance officer at the landlord's bank, who played an important role in persuading the bank to fund the receivership.
You may want to call the bank and ask to speak with its Community Reinvestment Act (CRA) officer. Every bank appoints an officer to monitor compliance with the CRA. If a bank has been unresponsive to your requests for assistance, you may want to write a letter to the bank, outlining all of the relevant facts and specifically stating what you would like the bank to do. At the end of the letter, ask the bank to "include your letter in their Community Reinvestment Act Public Comment File." As a result of making this request, the bank will be required to show your letter to government officials who monitor the bank's compliance with this law. You may also want to send a copy of your letter to the monitoring agency. Remember to keep a copy of the letter for future reference.
47 . In Fitchburg, tenants of the Harris receivership, endnote 29, worked closely with city officials in their efforts to get BayBank to deal with three properties for which it held mortgages; the Fitchburg Board of Health pursued the bank by issuing correction orders regarding the properties; the Planning Department pursued contacts with bank officials in the unrealized hopes of negotiating the properties' sale to the CDC; and the mayor wrote a letter to BayBank, attaching a local paper's editorial condemning BayBank's inaction.
48 . In Somerville, the Human Services Office provided a local community action program with a Community Development Block Grant of $10,870 to hire a full‑time organizer to help tenants at Clarendon Hill Towers, a federally subsidized housing development, organize to purchase their building. The Community Development Office, a different office with the Somerville City Hall, gave tenants at Clarendon Hill Towers a grant of $25,000 to hire a law firm to negotiate an option agreement and structure a preservation plan.
49 . In Salem, organized tenants stopped a bank's attempt to sell a property at foreclosure by picketing and rallying at the sale itself. These efforts led to the bank's agreement to provide the tenants and a local nonprofit organization with the opportunity to negotiate and purchase the property themselves. Also, in Fitchburg, tenants from the Houde receivership demonstrated outside of Housing Court against BayBank's failure to act to provide money to the receiver, negotiate with the city, or bring it to foreclosure—eventually forcing the CDC to withdraw from acting as the properties' receiver. The demonstration received substantial local press, and a few weeks later BayBank scheduled foreclosure sales.
Produced by Susan Hegel Created July 2008
