JOHN MOLONEY & OTHERS, [Note 1] TRUSTEES, [Note 2] vs. BOSTON FIVE CENTS SAVINGS BANK FSB & ANOTHER. [Note 3]

LIACOS, C.J. The plaintiffs are trustees representing the interests of unit owners in the common areas of a condominium complex in Dedham. The trustees seek declaratory, monetary, and injunctive relief to rectify perceived faults in those common areas. The material facts are simple and are supplied by a stipulation and statement of agreed facts. In early 1987, Boston Five Cents Savings Bank FSB (Boston Five) provided a construc-

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tion loan to Mother Brook Development, Inc. (Mother Brook). By late December, 1987, Mother Brook recorded a condominium deed of trust pursuant to G.L.c. 183A, s. 8 (1994 ed.). Over the next eleven months, Mother Brook sold forty-four of the eighty-six residential units in the complex.

At that point, November, 1988, Mother Brook became financially distressed. Workout negotiations ensued, and in October, 1989, Boston Five acquired a deed in lieu of foreclosure and then immediately passed all title to the condominium complex to a newly created wholly owned subsidiary, Delprete Street Corp. (Delprete, and collectively with Boston Five, bank). Delprete completed several "punch lists" of unfinished work at the complex (within individual units and in common areas), and also marketed and sold the remainder of the residential units to retail purchasers.

A Superior Court judge heard the case on the agreed facts and the stipulation of the parties that liability shall be determined solely on the applicability of G.L.c. 183A, s. 22 (1994 ed.), which reads: [Note 4]

"In the event of a foreclosure upon a condominium development, the lender taking over the project shall succeed to any obligations the developer has with the unit owners and to the tenants, except that the developers shall remain liable for any misrepresentation already made and for warranties on work done prior to the transfer."

The judge concluded that the very first statutory condition on

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liability ("[i]n the event of a foreclosure") was not met and dismissed the case. He reasoned that a deed in lieu is not a foreclosure. In his view, a foreclosure within the meaning of s. 22 must involve either the procedures of G.L.c. 244 (1994 ed.) or the filing of a bill in equity, see G.L.c. 185, s. 1 (E) (1994 ed.). Judgment entered for the defendants, the trustees appealed, and we granted their application for direct appellate review.

We must first determine the meaning of the word "foreclosure" in G.L.c. 183A, s. 22. At the outset, we look to the words of the statute. See, e.g., Marco v. Green, 415 Mass. 732, 739 (1993). The bank asserts that the judge was correct in ruling that "foreclosure" means only the procedures of G.L. c. 244 or a bill in equity to foreclose. Nowhere does c. 244 formally define "foreclosure" for its own purposes, much less for the rest of the General Laws.

We turn to the "intent of the Legislature ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated." Telesetsky v. Wight, 395 Mass. 868, 872-873 (1985). A deed in lieu is, for a great many purposes, the functional equivalent of a formal foreclosure. A deed in lieu essentially involves an alternate method of the collection of security. The lender accepting a deed in lieu, just Like the lender exercising strict foreclosure, has the security interest mature into real ownership without any requirement of public sale. See J & W Wall Sys., Inc. v. Shawmut First Bank & Trust Co., 413 Mass. 42, 44 (1992). Cf. Waterville Indus. v. Finance Auth. of Me., 984 F.2d 549, 550-552 (1st Cir. 1993) (neither deed in lieu nor subsequent bankruptcy settlement that voluntarily transferred title to lender was anything more than lender protecting security interest). Perhaps most importantly, the deed in lieu is, in effect, the settlement of foreclosure litigation. See J & W Wall Sys., Inc. v. Shawmut First Bank & Trust Co., supra. The deed in lieu therefore can be the business equivalent of formal

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foreclosure. See, e.g., M. Park & D. Park, Real Estate Law s. 521, at 628 (2d ed. 1981). [Note 5]

The clear legislative intent is to impose liability on those lenders who "tak[e] over the project," G.L.c. 183A, s. 22, in order to acquire the security that backs a loan to a condominium developer. The parties to whom liability might be owed (unit owners, a condominium association, and even contractors) are not necessarily party to the settlement with the lender after a developer's default. They cannot control whether a deed in lieu is used. If taking a deed in lieu avoids potentially massive liability, then a great many lenders, and perhaps every lender, exercising their security interests would take that route. Under the bank's view, lenders would never incur liability, making s. 22 an empty shell. [Note 6] The legislative scheme makes sense and is fulfilled only if deeds in lieu are, for the purposes of s. 22 (as they are for many other purposes), the functional equivalent of formal foreclosures. "[W]hen a literal reading of a statute would be inconsistent with legislative intent, we look beyond the words of the statute." Attorney Gen. v. School Comm. of Essex, 387 Mass. 326, 336 (1982).

The bank attempts to provide a rationale for distinguishing between deeds in lieu and formal foreclosure procedures. It is contended that if s. 22 does not extend liability to the lender acquiring a deed in lieu, the statute will provide an incentive for that lender to acquire the deed quickly (rather than use lengthy formal procedures) and complete a condominium project. Although that might be a rational choice by the

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Legislature, it is manifestly not the choice that was made in s. 22. Avoiding developer liability is likely to be a strong enough incentive to impel virtually all lenders to acquire deeds in lieu. Section 22 would be devoid of practical effect, and we do not so read statutes. See Plymouth County Retirement Ass'n v. Commissioner of Pub. Employee Retirement, 410 Mass. 307, 312 (1991). [Note 7]

The bank refers us to J & W Wall Sys., Inc. v. Shawmut First Bank & Trust Co., supra, in which we held that a deed in lieu is a "purchase" for purposes of G.L.c. 254, s. 7 (1994 ed.). The argument is that this statute treats "purchases" (including deeds in lieu) and "foreclosures" differently, thereby demonstrating a lack of functional equivalency. Quite to the contrary, J & W Wall Sys., supra, addressed the treatment of a deed in lieu with respect to a contractor's lien recorded after that conveyance. For that purpose c. 254, s. 7, treats "foreclosures" and "purchases" (including deeds in lieu) identically -- not enforcing contractor's liens recorded after the lender exercises on the security. Thus, read together the statute and our decision further demonstrate functional equivalency between the deed in lieu and more formal foreclosure proceedings.

There are of course several real differences between formal foreclosure and the deed in lieu. The bank attempts to show that "foreclosure" and "deed in lieu" have distinct meanings, and that in saying one the Legislature did not mean the other. Primary among these differences is that formal procedures eliminate junior liens, and deeds in lieu do not. E.g., J & W Wall Sys., supra at 44 n.4. This distinction proves too much. What it indicates is that a lender who takes a deed in lieu is generally less protected than a lender using formal procedures.

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The Legislature has made a decision to protect retail purchasers -- unit owners -- by preserving liability. Section 22 is essentially a consumer protection statute. It would be perverse to impute to the Legislature an intent to treat the acquirer of a deed in lieu better in this situation, merely because of an expedient maneuver in which the unit owners are not involved. See Shepard v. Finance Assocs. of Auburn. Inc., 366 Mass. 182, 191 (1974) (consumer protection statute interpreted broadly to effectuate legislative purpose). [Note 8]

We vacate the judgment below based on our understanding that the phrase "[i]n the event of a foreclosure" in s. 22 includes instances in which a lender acquires a deed in lieu of foreclosure. The judge based his ruling solely on an interpretation of the word ,,foreclosure," and did not rule on any other aspect of s. 22. We do not generally reach issues not discussed below, contrast American Grain Prods. Processing Inst. v. Department of Pub. Health, 392 Mass. 309, 311-312 (1984). Additionally, the record in this case leaves open the questions whether the defendants in this case had "tak[en] over the project" (G.L.c. 183A, s. 22), whether the plaintiff trustees have standing to assert claims for damage to unit owners, whether assuming exposure to liability under s. 22 allows the plaintiffs to recover for (a) negligence, (b) breach of warranty (express or implied), and (c) breach of fiduciary

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duty (if any). Thus, we remand the case for further proceedings consistent with this opinion. Whether, after further consideration, a trial "solely on the issue of damages" (see note 4, supra) as per the stipulation is appropriate, is also open to such further rulings as the judge may make in his sound discretion. See and compare Stuart v. Brookline, 412 Mass. 251, 254-255 (1992), and Crittenton Hastings House of the Florence Crittenton League v. Board of Appeal of Boston, 25 Mass. App. Ct. 704 (1988), with Huard v. Forest St. Hous., Inc., 366 Mass. 203, 208-209 (1974), citing Loring v. Mercier, 318 Mass. 599, 601 (1945).

So ordered.