Taking for Real Estate Taxes and the Right of Redemption in Massachusetts

January 1, 2010

This Memorandum serves to outline and highlight how Goldman & Pease LLC can assist in the prompt resolution of curative title actions in courts throughout the Commonwealth of Massachusetts and to highlight the area of Tax Takings and Right of Redemption under Massachusetts’ law as it relates to curative title actions.

  1. I. Relevant State Law

Massachusetts law states that if “a tax on land is not paid within fourteen days after demand therefor and remains unpaid at the date of taking, the collector may take such land for the town, first giving fourteen days’ notice of his intention to exercise such power of taking, which notice may be served in the manner required by law for the service of subpoenas on witnesses in civil cases or may be published, and shall conform to the requirements of section forty.” M.G.L. c. 60, § 53 (2009).  Under M.G.L. c. 60, § 54, title to land taken for unpaid taxes vests in the town as of the date of the taking, upon the town’s filing of an instrument of tax taking in the applicable registry of deeds within sixty days of the date of the taking. Such title is thereafter “held as security for the repayment of said taxes with all intervening costs, terms imposed for redemption and charges, with interest thereon.” Hanna v. Town of Framingham, 60 Mass. App. Ct. 420, 424 (2004).

In order to complete a taking of land for taxes, the town must, in accordance with M.G.L. c. 60, § 65, “bring a petition in the land court for the foreclosure of all rights of redemption of said land either six months from the sale or taking, , or in case of a city or town, at any time following the sale or taking if the buildings thereon have been found to be abandoned property …or there has been a certification pursuant to section 81B that the redemption amount as determined pursuant to section 62 exceeds the assessed value of the parcel…”  Additionally, §65 permits a petition for the foreclosure of all rights of redemption to be filed at any time following the consent in writing of the record owner.  A town’s petition to foreclose must include: (1) a description of the land to which it applies; (2) the assessed valuation of the land; (3) the petitioner’s source of title, giving a reference to the place, book and page of record; and (4) such other facts as may be necessary for the information of the court.

Where the petitioner is a city or town, the land court may, upon motion, also order the payment of legal fees to a city or town, which amount shall be added to the tax title account of the land to which the right of redemption is being foreclosed.  A land court judge must also consider the taxpayer’s ability to pay said fees in any such fee award.

The town’s title under an instrument of tax taking is, however, subject to redemption by any person having an interest in the land, at any time prior to the filing of a petition of a decree of foreclosure. M.G.L. c. 60, § 62 states as follows:

Any person having an interest in land taken or sold for nonpayment of taxes… at any  time prior to the filing of a petition for foreclosure under section sixty-five, if the land    has been taken or purchased by the town and has not been assigned, may redeem the    same by paying or tendering to the treasurer the amount of the tax title account of the  land being redeemed, and interest at sixteen per cent…

As the redemption of real estate from a tax sale is wholly by statute, a “person having an interest in the land,” as detailed in §62, must follow the terms of the statute accordingly.        McNeil v. O’Brien, 204 Mass 594, 598 (1910). Massachusetts Courts have generally     interpreted tax redemption statutes – because of their remedial nature – liberally in favor    of a person seeking to recover his land.  It is the policy of the law to favor redemption    from tax sales. United Trust Company v. William S. Reed, et al, 213 Mass. 199, 201           (1912).

However, it is important to note that the rights a bona fide purchaser, i.e., a third party who purchases the property without knowledge of the situation, may trump any and all right to redeem the property.

  1. II. Hypothetical

A mortgagor failed to pay her property taxes, and the tax collector of the town began the process of taking the mortgaged property for the town, by following all the procedures as detailed in M.G.L. c. 60, § 53.  Thereafter, the town initiated and concluded foreclosure proceedings by filing a petition for foreclosure which, as provided by statute, that extinguished all interested parties’ right of redemption, pursuant to M.G.L. c. 60, § 65.

After the petition to foreclose all rights of redemption was allowed, the mortgagee was made aware of the tax foreclosure, and wanted to redeem the property. However, the mortgagee was informed by the town that its right to redeem the property had already been extinguished by statute. Instead of accepting this result, the mortgagee promptly filed a motion to redeem the property (see M.G.L. c. 60, § 62).  In doing so, the mortgagee returned the property title to the mortgagor.  This redemption motion was accepted by the town as it saw an opportunity to obtain the back taxes plus 16% interest in this depressed economy.  The mortgagee was given the opportunity to petition the town’s selectmen for redemption of the property.

In the end, the town recognized the long history of statutes and case precedent that favored – and some would say even encouraged – the right of redemption from tax sales.  The mortgagee was permitted to redeem the property and thereafter, to commence its own foreclosure on its mortgage arising from the mortgagor’s significant default on loan payments.  The town first vacated the tax taking and then executed and recorded an instrument of redemption to restore title in the name of the mortgagor.

The Greater Boston attorneys at Goldman & Pease, located in Needham, concentrate in business law, real estate law, condo law, civil litigation, and estate planning and serve the greater Boston metro region including Alston, Arlington, Belmont, Brighton, Brookline, Cambridge, Canton, Dedham, Dover, Milton, Natick, Needham, Newton, Norwood, Waltham, Watertown, Wayland, Wellesley, Weston, West Roxbury, Westwood, and all of Massachusetts.