Updated: Jul 1, 2021
The Appeals Court, in Ithaca Finance, LLC v. Leger, recently considered what constitutes due process in tax foreclosure proceedings, and held that, notwithstanding significant procedural failures, a notice of the petition to foreclose, sent by certified mail pursuant to M.G.L. c.60, §66, is all that due process requires.
Under M.G.L. c.60, §69A, a foreclosure judgment may be vacated if the taxpayer pays the redemption amount, plus interest, within one year. After one year, the judgment may be vacated only upon a showing that the taxpayer’s due process rights were denied. In this case, a taxpayer sought relief from judgment after one year and the Land Court granted the requested relief, ruling that the foreclosing petitioner had failed to comply with certain assignment and communication requirements of M.G.L. c.60, §2C, violating the taxpayers due process rights and resulting in an inequitable foreclosure. The Court noted that the foreclosing petitioner had been assigned the tax title but had made no attempt to contact the taxpayer until after the judgment of foreclosure was final and failed to communicate with the taxpayer regarding payment of the taxes or to inform her of the assignment, as required by M.G.L. c.60, §2C. Notwithstanding these failures, the Appeals Court reversed the judgment in favor of the taxpayer, finding that where the notice required by M.G.L. c.60, §66, is sent by certified mail and is, in fact, received by the taxpayer, constitutional due process is satisfied.
In a closing footnote, possibly signaling to Beacon Hill that legislative reform is needed, the Appeals Court remarked:
Moreover, as the judge concluded and as we have outlined in this opinion, Ithaca's violations of several provisions of G. L. c.60, §2C, resulted in an inequitable foreclosure. We note that established case law requires the provisions of c.60 to be strictly construed in favor of protecting the taxpayer's right of redemption. We question whether, in light of the severe consequences a taxpayer faces in these proceedings, the Legislature fully considered the desirability of completely prohibiting relief after one year in a circumstance where a private entity repeatedly violated explicit statutory obligations. (citations omitted).
This decision restates established law, but the Court’s sympathetic discussion follows a series of recent decisions that have taken a closer look at inequitable tax title practices by private companies. See Tallage Lincoln, LLC v. Williams, 485 Mass. 449 (2020); Tallage LLC vs. Meaney, Mass. Land Ct., No. 11 TL 143094, 2015 WL 4207424 (June 26, 2015) (failure of taxpayers to pay municipal water and sewer bills amounting to $492.51 resulted in foreclosure on property with fair market value of $270,000). Stay tuned for future developments.