The Massachusetts Land Court has held that a plaintiff’s failure to timely file a copy of a complaint challenging a foreclosure with the registry of deeds, as required by Mass. Gen. Laws c. 244, § 15, requires dismissal of a complaint challenging the subject foreclosure. Kenney, et al. v. Brown, et al., No. 16 MISC 000530 (Mass. Land Court July 27, 2017).
Mass. Gen. L. c. 244, § 15 (“Section 15”) became effective December 31, 2015, and made certain changes to provide protection to subsequent third-party purchasers of foreclosed properties. Where the property has been conveyed to an arms length third-party purchaser, Section 15 specifies that a challenge to the validity of a foreclosure sale must be commenced in court either through a complaint or other pleading and that a copy of that complaint or other pleading be recorded in the registry of deeds for the county where the property lies. Both the court action and the recording of the pleading must take place by the later of three years after the recording of the foreclosure affidavit of sale or December 31, 2016.
In 2007, U.S. Bank National Association foreclosed on property owned by plaintiffs Kenney and Frank. The bank then conveyed the property to a third party, who then conveyed it to defendants Brown and Oxboel in 2008. In 2016, plaintiffs challenged the validity of the foreclosure sale. Following the filing of an amended complaint in December 2016, the defendants filed answers asserting Section 15 as a defense. On January 19, 2017, plaintiffs recorded a copy of their amended complaint with the registry of deeds.
After examining the text of Section 15, the Court disposed of plaintiffs’ arguments regarding the effective date of the statute and waiver, and concluded that Section 15 served as a complete bar to the plaintiffs’ claims.
“By placing a time limit on a challenge to contest the validity of a foreclosure, after which such claims are barred and cannot be brought, § 15 is not a statute of limitations, but a statute of repose. As a statute of repose, § 15 precludes challenges to the validity of an arm’s length purchaser’s title arising out of a foreclosure sale . . . If a challenge to a foreclosure is not asserted and recorded within three years from the recording date of the foreclosure affidavit or . . . asserted and recorded by December 31, 2016, the statute completely eliminates a cause of action.”
For more information about our banking law practice, please visit our banking law page.