Foreclosure By Entry Is Effective Method for Mortgagee to Gain Fee Simple Title

Photo of Jeffrey A. Soilson

The Massachusetts Land Court’s decision this fall in HS Land Trust LLC v. Gonzalez, Civ. Action No. 11 Misc. 446482 (October 30, 2012), serves as a useful reminder that a foreclosure by entry – which often accompanies a foreclosure by sale – is a perfectly valid method of obtaining title following the breach of a mortgage’s conditions.

The foreclosure by entry statute, G.L. c. 244, § 1, allows recovery of possession of land by a mortgagee “by open and peaceable entry thereon,” if that entry is unopposed by the mortgagor or anyone else claiming the land, and is “continued peaceably” for a period of three years following the recording of a certificate that entry has been made.

In HS Land Trust, Land Court Justice Keith Long held that a mortgagee who made entry and recorded a certificate in 1990, but took no other action demonstrating ownership of the property until almost twenty years later, was the owner in fee simple of the foreclosed-upon land. The mortgagee’s ownership interest was not affected by the fact that the land had been purportedly conveyed numerous times in the intervening years between the recording of a certificate of entry and the mortgagee’s assertion of rights against the current would-be owner.

The case illustrates just how little is necessary to establish title through a foreclosure by entry, if a mortgagee is willing to wait three years to obtain a full fee simple interest. “Cases that have interpreted the foreclosure by entry statute have long held that a mortgagee who has made peaceable entry on the property and duly recorded a certificate of entry need not do anything further to establish possession,” wrote Judge Long.

The Court explained further that, during the three years following peaceable entry, the mortgagor is treated as the mortgagee’s tenant at will. Thus, the mortgagor’s continued occupancy of the land does not interrupt the mortgagee’s possession during the three-year time period required to gain full title. Once the three years has expired, the mortgagee owns the property outright.

Interestingly, however, there appears to be an outer limit to the length of time during which a mortgagee may remain entirely idle with respect to the property, if she wishes to protect her interest. Judge Long wrote that a fee simple owner who has gained his title through foreclosure by entry could be dispossessed by adverse possession. The twenty-year clock associated with adverse possession does not begin to run, however, until the mortgagee has obtained fee simple title (i.e., once the three years after recording a certificate of peaceable entry have expired).

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