Massachusetts General Laws ch. 183B sec. 29A – Forfeiture of rights of time-share owner for breach of condition of any mortgage; proceedings
Section 29A. The rights of a time-share owner shall be subject to forfeiture in accordance with clauses (a) to (g), inclusive, for breach of condition of any mortgage, which for the purpose of this section shall include any security instrument including, but not limited to, a mortgage, trust deed or other similar instrument encumbering a time-share.
Terms Used In Massachusetts General Laws ch. 183B sec. 29A
- Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
(a) Upon default, and after all applicable cure periods have expired, the holder of a mortgage shall provide written notice of default to the time-share owner at the last known address thereof by certified and first class mail and provide a reasonable opportunity to cure of not less than 90 days from the date of the mailing of the notice letter.
(b) Prior to offering a time-share for sale for breach of condition of a mortgage, the holder thereof shall attempt in good faith and with reasonable precaution which, for the purpose of this section shall not require separate proceedings under section 57 of the acts of 1943, to determine whether any person subject to forfeiture proceedings under this section is entitled to protection under the Service members Civil Relief Act of 2003, 50 U.S.C. App. Sec. 517, hereinafter referred to as ”SCRA”.
(c) Nothing herein contained shall prevent a holder of a mortgage from seeking a determination under section 57 of the acts of 1943 that a time-share owner is not entitled to benefits under SCRA or, if a time-share owner is entitled to the benefits under SCRA, a determination of said time-share owner’s rights under SCRA.
(d) With respect to forfeiture proceedings based upon breach of condition of a security instrument encumbering a time-share license, the holder thereof shall have the option to; (i) foreclose in the manner prescribed in the time-share instrument or, if not prescribed, in accordance with this section; or (ii) to sell, by public or private sale, conducted in accordance with Part 6 of Article 9 of chapter 106.
(e) If, after expiration of the 90–day period, the time-share owner has not cured the default in the manner prescribed and the holder of the mortgage has determined in good faith and with reasonable precaution that the time-share owner is not entitled to protection under SCRA, the holder of the mortgage shall conduct a public auction sale under the following conditions:
(1)(i) notice of such sale shall be published once in a public newspaper with a general circulation in the town or county in which the time-share property is situated and not less than 30 days before the date of the sale, calculated by excluding the date of publication of the first notice and the date of sale;
(ii) at least 30 days prior to the date of sale, a written notice of the time, date and place of the auction shall be mailed, by certified mail and by first class mail to the last known address of the time-share owner of record and to the last known address of all parties having a lien or other interest of record in the time-share estate junior to the mortgage that is the subject of forfeiture proceeding;
(iii) such notice shall contain: the name of the time-share owner and the original mortgagee; the date, book and page or document number of the mortgage; the date, time and place of the sale; a general description of the time-share; and the terms of the sale; provided, however, that if more than 1 time-share is to be included in the sale, all such time-shares may be combined into 1 notice of sale, with 1 property description being given as set forth in clause (iv); and
(iv) notice of sale pursuant to this section shall be printed in substantially the following form:
SALE OF TIME–SHARE ESTATE UNDER M.G.L. C. 183B, SECTION 29A.
By virtue of M.G.L. c. 183B, Section 29A and in execution of the Power of Sale contained in a certain Mortgage (or Mortgages, if more than one) on the time-share estate (or estates, if more than one) given by the time-share owner (or owners, if more than one) set forth below for breach of the conditions of said Mortgage and for the purpose of foreclosing, the same will be sold at Public Auction commencing at ___ on
TERMS OF SALE: (State the deposit amount to be paid by the purchaser at the time and place of the sale, and the times(s) for payment of the balance or the whole as the case may be. The time share estates, if more than one, may be sold in individual lots or as a group.) Other terms to be announced at the sale.
Signed___
Holder of security instrument, or counsel; and
(v) the printed notice required under clause (iv) published in accordance with this section, together with such other or further notice, if any, shall be deemed a sufficient notice of the sale and the time-share shall be deemed to have been sold, and the instrument conveying the time-share from the foreclosing entity shall transfer the time-share subject to, and with the benefit of, all restrictions, easements, improvements, outstanding tax titles, municipal or other public taxes, assessments and security instruments recorded prior to the mortgage that is the subject of forfeiture proceedings, whether or not reference to such restrictions, easements, improvements, outstanding tax titles, municipal or other public taxes, assessments or security instruments is made in the instrument of conveyance; provided, however, that no purchaser at such sale shall be bound to complete the purchase if there are encumbrances, other than those included in the notice of sale, which are not stated at the sale and included in the foreclosing entity’s contract with the purchaser; and, provided further, that no such notice of sale shall be held to be invalid by reason of any error or irregularity which is neither substantial nor misleading.
(i) unless the notice of sale otherwise provides, the sale shall take place on the time-share property.
(ii) the sale shall be by public auction, conducted by a Massachusetts licensed auctioneer and, at the discretion of the auctioneer, the auctioneer may dispense with the reading of the names of the time-share owners (if there is more than one), the description of time-share (if there is more than one) and the recording information (if there is more than one instrument).
(iii) all rights of redemption of the time-share owner shall be extinguished upon the sale of a time-share pursuant to this section;
(iv) the association, its manager, the holder of the mortgage, and any time-share owner may bid at the sale and the successful buyer at such sale shall take title to the time-share free and clear of any and all outstanding obligations of the prior time-share owner to the association, except that if the buyer intends to use the time-share during the same fiscal year of the association in which the time-share was purchased, the buyer shall be obligated to pay the assessment for that year;
(v) upon closing, the holder of the mortgage shall provide the buyer with:
(A) a deed or other appropriate instrument transferring the rights to the time-share;
(B) an affidavit of sale attesting to compliance with all requirements of the forfeiture proceedings pursuant to this section and that the holder has attempted in good faith and with reasonable precaution, to determine whether any person subject to forfeiture proceedings under this section is entitled to protection under the SCRA; and
(C) a resale certificate as required by section 42, if requested by the buyer.
(vi) the buyer shall record the deed or other instrument and the affidavit of sale with the appropriate registry of deeds not more than the later of 90 days after the sale date or 90 days after receipt of the deed from the holder of the mortgage and upon such recording, the buyer shall be deemed to be a bona fide purchaser of such time-share and shall not be subject to claims by the prior owner thereof that the forfeiture proceedings under this section are invalid under SCRA; and
(vii) within 30 days after the closing and delivery of the deed or other instrument and affidavit of sale, the holder of the mortgage shall mail a notice detailing the results of the sale to the last known address of the former time-share owner and all parties which held a junior interest to that of such holder.
(f) In the event of a breach of the conditions of a mortgage on a time-share granted prior to the effective date of this section, the holder of the mortgage may conduct forfeiture proceedings of the interest of the time-share owner in the time-share under this section; provided, however, that if, at the same time the holder gives written notice of default to the time-share owner as provided in clause (a), the holder also gives written notice to the time-share owner stating that unless the time-share owner objects in writing to the non-judicial forfeiture within the 90–day period required by said clause (a), the holder will proceed to institute forfeiture proceedings pursuant to this section. The holder shall explain in the notice that the time-share owner has the right to a judicial foreclosure conducted pursuant to chapter 244 if the owner asserts the objection within the specified time period and shall include with the notice an objection form together with an envelope addressed to the holder. Failure of a time-share owner to object in a timely manner as required by this clause shall be deemed a waiver of the owner’s right to a foreclosure pursuant to chapter 244, which may include judicial foreclosure in a court action.
(g) In the case of a mortgage in which the term or maturity date of the mortgage is stated, section 33 of chapter 260 prohibiting the exercise of a power of sale, entry, possession or commencement of foreclosure proceedings after 5 years from the expiration of the term or maturity date shall not apply to forfeiture proceedings on mortgages for which an extension of the mortgage or acknowledgement or affidavit that the mortgage is not satisfied pursuant to sections 33 and 34 of chapter 260 has been recorded. For the purposes of this clause, completion of forfeiture proceedings shall be deemed to have occurred upon the recording of the deed and affidavit referenced in subclause (vi) of paragraph (2) of subsection (e).