The state’s Supreme Judicial Court has pruned back the tangled garden of the state’s foreclosure laws, clarifying how long lien holders have to foreclose on old debts and clearing up some clouded titles.

The case, Deutsche Bank National Trust Co. v. Fitchburg Capital LLC, involved a bit of family drama, with one relative offering another private business loans secured by mortgages on a home in Fitchburg, which the second party owned. The original commercial loans were meant to be short-term, with one coming due after a single year.

The eventual owner of the notes, an entity named Fitchburg Capital, did not move to foreclose on the loans until several years after their original repayment date. By that time, the homeowner, Lee Bourque, had also fallen behind on payments due on a second, residential mortgage he had taken out, and Deutsche Bank, as trustee for the securitized trust which held the note, was also looking to foreclose. When Bourque filed for bankruptcy in 2011, the issue of the competing claims to the house came to a head. Fitchburg conducted a foreclosure auction and claimed the property in 2012.

Deutsche then sued, saying that Fitchburg’s foreclosure should be invalidated because it had waited too long to begin the process. At issue was a 2006 law passed by the legislature intended to help clear up so-called “obsolete mortgages.” The law states that any mortgage that includes a deadline by which the debt must be paid in full, the lender has five years from that date to start the foreclosure.

Deutsche said that even though the Fitchburg loans had been issued before its own – which would normally mean that Fitchburg would have the first claim on the collateral – since more than five years had elapsed from the due date on the loans and the start of the foreclosure, the foreclosure was invalid. (The law permits mortgage holders to extend their claims by filing certain paperwork with the registry of deeds, but Fitchburg had not done this.)

Fitchburg claimed that while the notes included a due date, no deadline was included in the language of the mortgage itself – and since cases like the SJC’s own ruling in Eaton vs. Fannie Mae had ruled that the note and the mortgage were separate legal entities, that meant the obsolete mortgage law didn’t apply.

The state’s Supreme Judicial Court disagreed, writing “The flaw in Fitchburg’s argument is the misconception that considering the maturity date of the note to be the maturity date of the mortgage requires the note and the mortgage to lose any independent properties. The question, rather, is whether the term or maturity date of the underlying [debt] is commonly understood as the term or maturity date of the mortgage.” It is so understood, the court ruled.

The new clarity could help clear up one variety of potential clouds on title, said Jeffrey Loeb, an attorney with RichMay P.C. in Boston who represented Deutsche in the case. Loeb said he’s aware of several cases before the Land Court in which the issue of competing older claims has arisen, including a nearly identical case currently being considered by the Appeals Court. The SJC’s decision should wipe away those claims, since the ruling applies retroactively – even if the loan itself was issued before the law was changed or before the SJC made its decision, the five-year limit still applies.

“From my perspective, this case and this decision reaffirms what lots of folks thought the law was. If people haven’t done what they need to do to extend, it’s deemed discharged,” said Loeb. “Had the SJC taken Fitchburg’s argument, it would have created a whole host of problems.”

Note-holders whose mortgages have expired under the ruling can still sue the debtor individually to attempt to recover the debt or pursue other assets. Under Massachusetts law, they may have up to 20 years to pursue such claims.

But the Deutsche v. Fitchburg case should not be taken as a panacea for the thousands of homes across the Bay State who have had their titles clouded by problematic foreclosures. Unlike the loans issued in this case, which were due to be repaid after a single year, most home loans have terms of 15 or 30 years. Such loans do not usually specify a specific date by which the funds must be repaid, instead stating only that the mortgage exists until the loan has been paid off. In the absence of a particular date to start the clock ticking, lenders have 35 years before a mortgage is rendered obsolete and wiped off the title.

“In terms of the Ibanez [title problems] this case isn’t necessarily going to solve anything; it’s pretty narrow,” said Tom Moriarty, a litigation partner at Marcus, Errico, Emmer & Brooks and principle author of the Real Estate Bar Association’s amicus brief in the case. Nevertheless, the decision clears up a potential serious problem. A ruling in favor of Fitchburg would have eliminated the utility of the obsolete mortgage statute, Moriarty said, making this a victory for common sense.