N.H. RSA 479:25 and N.H. RSA 477:29 provide for non-judicial foreclosures on mortgages that contain the statutory power of sale language.

A non-judicial foreclosure under N.H. RSA 479:25 generally requires the following.

• A notice of sale be prepared and include the:
1. date, time, and place of sale;
2. town, county, street or highway and street number (if any) of the mortgaged premises;
3. date of the mortgage;
4. volume and page of the recording of the mortgage; and
5. terms of the sale (the “Notice”).
• The Notice be published once a week for three successive weeks in a newspaper with a general circulation in the town or county in which the property is situated.
• A copy of the Notice be served upon the mortgagor or sent by registered or certified mail to their last known address or to such person as may be agreed upon in the mortgage at least 25 days before the sale, or in the case of a residential mortgage, at least 45 days before the sale.
• A copy of the Notice also be sent to any person having a lien of record on the mortgaged premises not less than 21 days before the sale, provided that the lien is recorded at least 30 days, or in the case of a residential mortgage, at least 50 days, before the date of the sale in the registry of deeds.

After the foreclosure sale and pursuant to N.H. RSA 479:26, the person selling pursuant to the power of sale will within 60 days after the sale cause the:

• foreclosure deed;
• a copy of the notice of the sale; and
• an affidavit setting out fully and particularly the acts in the premises, to be recorded in the registry of deeds in the county where the property is situated, and the affidavit or a duly certified copy of the record thereof will be evidence of whether or not the power of sale was duly executed.

Failure to record the deed and affidavit within 60 days after the sale will render the sale void and of no effect only as to liens or other encumbrances of record with the register of deeds for the county intervening between the day of the sale and the time of recording the deed and affidavit.

New Hampshire allows for other methods of foreclosure (judicial and otherwise) pursuant to N.H. RSA 479:19. However these methods are very rarely used given the common inclusion of the statutory power of sale in most mortgages and the time, expense and impracticality of these methods.

Because foreclosure under the power of sale pursuant to N.H. RSA 479:25 in New Hampshire is a relatively quick, non-judicial process, we do not typically see foreclosure on equity in New Hampshire. See 2.5 Pursuing Claims Against Borrowers and Foreclosure Simultaneously.

See 2.1 Foreclosure Process.

A mortgagor may redeem the property by paying all amounts due and owing plus all damages and costs caused by the breach of the mortgage before the foreclosure sale is complete according to N.H. RSA 479:18. Under New Hampshire law, the mortgagor loses all legal and equitable interest in the property, and the right of redemption, once the auctioneer’s hammer falls and the memorandum of sale is signed. This right of redemption applies to all statutory methods of foreclosure (see Barrows v Boles, 141 NH 382 (1996)).

New Hampshire law does not prohibit a lender from pursuing the equity of the property owner and foreclosure of a mortgage at the same time. From a practical perspective, because foreclosure under the power of sale pursuant to N.H. RSA 479:25 in New Hampshire is a relatively quick, non-judicial process, the foreclosure is typically completed before any deficiency judgment is entered and after the right of redemption can be exercised. A lender can generally pursue other claims against the property owner at the same time as foreclosure under power of sale.

Judicial and other methods of foreclosure as allowed in New Hampshire pursuant to N.H. RSA 479:19 will each take more than one year to complete.

The timeline for a non-judicial foreclosure sale is case and fact specific. For example, a residential foreclosure sale requires more notice than a commercial foreclosure sale and a unique piece of real estate may require more advertising (to comply with the commercially reasonable sale standard) than other types of real estate. However, a foreclosure sale can generally be completed within 45 to 90 days after notice of default, acceleration and passage of any cure periods.

Deficiency following a foreclosure action is calculated based upon what is allowed under the terms and conditions of the promissory note and mortgage.

A lender may commence a lawsuit against the borrower for the deficiency balance (including in the lawsuit, attachment of other assets) or the lender may exercise its rights under any other security interest and/or guarantee that the lender may hold.

We typically see either limited partnerships or limited liability company entities formed to facilitate real estate joint ventures in New Hampshire.

Common law or statutory duties of persons with ownership interests in a real estate joint venture are generally governed by the operating agreement or limited partnership agreement (as applicable).

Remedies against owners who violate these common law, statutory or contractual duties are generally governed by the operating agreement or limited partnership agreement (as applicable).

When an organisation’s governing documents are silent or vague, disputes regarding management decisions are resolved based on statutory provisions governing the form of entity along with judicial precedent. When the governing documents allow for a decision-making stalemate the process will generally be followed in the absence of an overriding statutory provision.

We do not generally see automatic entry of judgment or automatic entry of provisional remedies in New Hampshire.

The parties may need to address unpaid state taxes before a joint venture can be wound down in New Hampshire.

We encounter the following types of guarantees in our real estate practice in New Hampshire.

• Non-recourse carveout guarantees.
• Full guarantees.
• Limited payment guarantees.
• Completion guarantees.

Guarantees are governed by the general law of contracts (see Fleet Bank-NH v Christy’s Table 141 N.H. 285 (1996)).

Guarantees (including completion, unconditional or absolute guarantees) are governed by the general law of contracts in New Hampshire. Provisions which purport to relieve a party from bad faith or intentional wrongs are considered to be against public policy and will not be enforced (see Reconstruction &c. Corp. v Faulkner, 101 N.H. 352 (1958)).

There are no expedited judicial procedures available in New Hampshire that are particularly appropriate in the guarantee-enforcement context. New Hampshire does not have any statutory rules that affect a lender’s ability to enforce the provisions of a guarantee.

While we do see arbitration clauses in real estate transactions in New Hampshire from time to time, it is not the prevalent method of addressing real estate disputes in agreements.

A matter decided via arbitration will typically reach a decision more quickly than one pending in court. The slow pace of litigation in courts is a frequent concern for litigants and while the state has made efforts to improve efficiency (including the development of a Land Use Review Docket within the Superior Court and a Housing Appeals Board for certain land use appeals involving housing) there is not much that can be done, given the state of the courts’ dockets. In addition, arbitration agreements frequently require that the dispute be kept confidential, which can be attractive to litigants who wish to keep their dispute out of the public eye.

However, there are disadvantages to arbitration. These include having to pay the arbitrator’s fee, which can be significant given that many arbitrators charge an hourly rate. In addition, should a litigant be dissatisfied with the decision of an arbitrator, they will face a challenging standard on appeal. Specifically, under RSA 542:8, the New Hampshire Superior Court may modify an arbitrator’s decision for plain mistake or vacate it for fraud, corruption, misconduct by either the parties or the arbitrator(s) or the arbitrator having exceeded their authority. The combination of the cost and the challenging appeal standard frequently makes arbitration a less attractive venue for litigants who have a choice in the matter.

However, ultimately, the advantages and disadvantages of arbitration versus litigation will vary on a case-by-case basis. Depending on the factual allegations and claims involved, a litigant may have a preference regarding the decision-maker, be it a single arbitrator, a panel of arbitrators, a judge or a jury, and all options should be evaluated in the context of the particular dispute.

With only limited exceptions, virtually every litigated real estate transaction is mediated at some point. In fact, New Hampshire Superior Court Civil Rule 32 requires that cases participate in some form of alternative dispute resolution (ADR) at some point in the dispute unless the Superior Court exempts the case for “good cause”. Such “good cause” exemptions are not frequently sought.

Of the various types of ADR (including mediation, arbitration and neutral case evaluation), mediation is by far the most frequently used process. Among other things, it allows the parties to retain control over the outcome of any settlement, as the decision to settle or not settle in mediation is entirely voluntary. It also affords the parties an opportunity to craft creative solutions which may not be available were the decision left to a judge or jury.

Of course, some matters are resolved through direct negotiation without the use of mediation. However, in our experience, the majority of real estate disputes (like other civil disputes) go through the mediation process as part of efforts to resolve the matter.

A pre-judgment attachment or mechanic’s lien provides security for an eventual judgment, but they do not, in and of themselves, prevent the sale or encumbrance of property. As a practical matter, it is unlikely that the property subject to a pre-judgment attachment or mechanic’s lien will be alienated without addressing the attachment or mechanic’s lien in some fashion, usually by placing funds to match the attachment or mechanic’s lien into an escrow account until the conclusion of the dispute.

Pre-judgement attachments and mechanic’s liens can provide the plaintiff with a priority position that may make a lender unwilling to loan funds in connection with a property unless and until the attachment or lien is removed, which may also have the practical effect of preventing the sale or encumbrance of the property.

New Hampshire law also recognises a lis pendens, which is a notice that is recorded with the registry of deeds that informs potential purchasers of the pendency of a lawsuit in which title to that real estate may be affected by a claim for specific performance. A lis pendens can be recorded at the registry of deeds without prior notice to the defendant/owner and without approval from a court (see N.H. Rev. Stat. Ann. Section 511-A:8, III).

A lis pendens can only be used in connection with an equity case seeking specific performance of an agreement to transfer land and there is an imminent danger of a transfer to a bona fide third party. A lis pendens does not provide the plaintiff with any security for an eventual judgment and it does not prevent the alienation of the property. Instead, it merely provides notice to an eventual buyer of the pending litigation that might affect title.

In New Hampshire the only provisional remedy that would prevent the sale or encumbrance of real property during the pendency of a dispute is injunctive relief issued by a court such as a temporary restraining order or preliminary injunction.

To obtain a temporary restraining order or preliminary injunction, a lawsuit must be filed in a court asserting valid claims along with a separate motion for a temporary restraining order or preliminary injunction. The burden of proof will be on the plaintiff to demonstrate that:

• it is likely to succeed on the merits of at least one claim in its complaint;
• it will suffer irreparable harm if injunctive relief is not granted (or there is no adequate remedy at law);
• balancing the hardship to the respective parties favours it; and
• the public interest will not be adversely affected if the injunction is granted.

To obtain a pre-judgment attachment (as opposed to a mechanic’s lien), a lawsuit must be filed in a court along with a separate motion to attach real property owned by the defendant. The burden of proof will be on the plaintiff to demonstrate a reasonable likelihood that it will recover a judgment of an amount equal to or greater than the amount of security sought. If the plaintiff satisfies that burden, the burden of proof will be on the defendant to demonstrate that its assets are sufficient to satisfy the judgment such that a lien on its property is not warranted (see N.H. Rev. Stat. Ann. Section 511-A).

For the unique requirements to obtain a mechanic’s lien, see 7.6 Mechanic’s Liens.

A plaintiff who secures an injunction or pre-judgment attachment faces the risk that the court later concludes that the injunction or pre-judgment attachment was based on inaccurate assertions by the plaintiff and the defendant suffers harm as a result of the encumbrance. This is known as a “wrongful injunction” or “wrongful attachment” claim. In order to preserve a possible claim for “wrongful injunction”, the defendant must request an order requiring the plaintiff to post a bond as a condition of obtaining the injunction and the court must grant the request.

If the plaintiff is required to post an injunction bond when the injunction is issued by the court, the amount of that bond will serve as the limit of the plaintiff’s exposure for damages if it is later determined that the injunction was unjustified.

New Hampshire courts will issue temporary restraining orders or preliminary injunctions under certain circumstances, but the burden of proof is relatively high. The burden of proof will be on a plaintiff to demonstrate that it is likely to succeed on the merits of at least one claim in its complaint and that it will suffer irreparable harm if injunctive relief (such as the transfer of a unique property) is not granted.

In Soukup v Brooks, 2006 NH Super. LEXIS 35, the New Hampshire Supreme Court noted that “[b]ecause the subject of this litigation is rights in real estate, there is a presumptive lack of an adequate, alternative remedy at law and of irreparable harm by use without right which cannot be redressed by a damage award”.

Contractors, subcontractors and suppliers cannot place a mechanic’s lien on a property without court approval. To obtain a mechanic’s lien, a contractor, subcontractor or supplier must file a lawsuit in a court along with a motion for a mechanic’s lien attachment. Unlike other pre-judgment attachments, likelihood of success on the merits does not need to be proved, because the lien is an inchoate right granted by statute (N.H. Rev. Stat. Ann. Section 447). A plaintiff need only show that it has provided labour and/or materials that improved real property for which it has not been paid.

The plaintiff must file the lawsuit, obtain a court order approving the mechanic’s lien attachment and record the mechanic’s lien attachment with the appropriate county registry of deeds within 120 days of the last date on which the plaintiff performed substantial, rather than cursory or minor punch list work. Subcontractors and suppliers that do not have a contractual relationship with the property owner must also provide notice to the owner of an intention to place a mechanic’s lien prior to filing the lawsuit.

Mechanic’s liens are generally provided on an ex parte basis (see N.H. Rev. Stat. Ann. Section 511-A:8) where the plaintiff files the complaint and motion for mechanic’s lien attachment without serving the defendant. If the court grants the mechanic’s lien attachment, the plaintiff obtains a certified copy of the court’s order and records it along with a writ of attachment with the registry of deeds for the county where the property is located. The plaintiff then serves the defendant with the complaint, court order and proof of the recorded attachment. The defendant may then file an objection to the mechanic’s lien (after it has been recorded) and the court will then schedule a hearing. If the defendant proves that the mechanic’s lien was not perfected within 120 days or that the amount claimed is not really owed, the court may order the mechanic’s lien be dissolved.

A mechanic’s lien can only be recorded on the property where the labour and materials were supplied and not another property owned by the defendant.

A property owner does not have the right to substitute a bond to force the discharge of a mechanic’s lien, although a plaintiff may voluntarily accept the substitution.

If the plaintiff does not have a contract with the owner, the proper amount of the mechanic’s lien is likely to be limited to the value of the labour and materials provided to the property and will not include interest, attorneys’ fees and other indirect costs.

There is no applicable information in this jurisdiction.

There is no applicable information in this jurisdiction.