Massachusetts Real Estate Lawyer Blog
Massachusetts foreclosure proceedings may involve multiple legal challenges from different parties and extend over many years. In a May 13, 2019 case, the Appeals Court of Massachusetts reviewed a dispute over the surplus sale proceeds following a real estate tax taking. The action was brought by an individual plaintiff against the defendant, who was the owner of a foreclosed property.
In 2010, the town executed a tax taking on property owned by the defendant. The town subsequently filed a petition in Land Court to foreclose all rights of redemption on the property, and in 2014, obtained a foreclosure judgment in its favor. The town sold the property at auction for approximately $815,000 in 2016.
The plaintiff in the case had brought a Massachusetts Wage Act claim against the defendant in 2012. She was awarded a judgment in the amount of $250,000, to be secured by a mortgage on the defendant’s property, which the plaintiff recorded in August of 2014. After learning that the town planned to sell the property at auction, the plaintiff filed an action against the defendant and the town seeking a declaratory judgment that she was entitled to the surplus of the tax debt from the sale. After the judge entered summary judgment in favor of the town, the plaintiff filed the instant appeal.
Under Massachusetts law, title conveyed by a tax taking of land is absolute after foreclosure of the right of redemption by decree of the Land Court. On appeal, the court explained that once a municipality forecloses all rights of redemption, the record title is cleared, and the municipality may sell or keep the property free of any claims of the prior owner and other persons whose rights are extinguished. The court concluded that neither the defendant nor the plaintiff were entitled to surplus from the sale of the property, because the foreclosure judgment issued by the Land Court in 2014 terminated any interests they may have held in the property.
The court held that the town, having acquired its interest in the property through a tax taking, held absolute title to the property as of the date of the foreclosure property. In order to assert her interests in the property, therefore, the plaintiff was required to bring her claim in the town’s Land Court action, prior to the entry of the foreclosure judgment. However, because the plaintiff failed to intervene in the foreclosure action and assert her interest, her claim terminated on the date of the foreclosure judgment. The court thus affirmed the decision of the lower court.
If you are seeking legal guidance for an issue concerning your home or residential property, the Massachusetts real estate attorneys at Pulgini & Norton can help. We provide trustworthy advice to homeowners and individuals in all areas of residential real estate law, including property tax liens and foreclosures. We can also assist with mortgage refinancing, home sale and purchase agreements, actions for adverse possession and quiet title, and many other residential land transactions. Contact us online or call our office at (781) 843-2200 to request a free consultation with a real estate attorney at Pulgini & Norton.