(a) Any mortgage to secure future advancements of money for construction or repair of buildings or improvements on land in this state, including site improvements of every kind with or without the construction or repair of any buildings, is sufficiently definite and certain and valid to secure all money actually advanced under and in accordance with its provisions, up to but not exceeding the amount of the full loan therein authorized, with the same priority as if it had been advanced at the time the mortgage was delivered, (1) if the mortgage contains a description of the loan in substantially the following form: “Whereas buildings or improvements on said premises are in process of construction or repair, or to be erected or repaired; and whereas the said grantee has agreed to make the loan herein described to be paid over to said grantor in installments as the work progresses, the time and amount of each advancement to be at the sole discretion and upon the estimate of said grantee, so that when all of the work on said premises shall have been completed to the satisfaction of said grantee, said grantee shall then pay over to said grantor any balance necessary to complete the full loan of $....; and whereas the grantor agrees to complete the erection or repair of said buildings to the satisfaction of said grantee within a reasonable time from the date hereof or at the latest on or before .... months from this date”, or (2) whenever one or more advances are to be made when a certain event or condition occurs, if the mortgage contains the pertinent portions of the above clause, and such additional clauses as shall set forth with reasonable certainty and accuracy the particular sums which are to be advanced and the event or condition which determines when such sums are to be advanced to the grantor. A mortgage that otherwise complies with subdivision (1) of this subsection shall be valid notwithstanding any provision in any other agreement between the mortgagee and mortgagor that sets forth either particular sums which are to be advanced or the event or condition which determines when such sums are to be advanced, or both, whether or not such other agreement is recorded on the land records. Nothing herein invalidates any mortgage which would be valid without this subsection.
(b) The parties may subsequently modify the time set forth in the mortgage for the grantor to complete the erection or repair of said buildings or improvements as well as the payment dates for interest and principal necessitated by the change in the completion date by a writing to that effect, signed by the parties and recorded upon the proper land records. The modification shall in no way affect or limit the priority of the mortgage.
(c) If the mortgagor under a mortgage to secure future advances containing a description of the loan as specified in subsection (a) hereof is in default under the mortgage or note, the mortgagee may complete the erection or repair and the cost thereof shall be a part of the debt due the mortgagee and secured by the mortgage, provided in no such case may the total debt due exceed the face amount of the note.
(1949 Rev., S. 7194; 1949, S. 2970d; 1971, P.A. 809; P.A. 73-545; P.A. 79-178; 79-602, S. 62.)
History: 1971 act specifically included site improvements in previous provisions and added Subsecs. (b) to (d); P.A. 73-545 incorporated former Subsec. (b) in Subsec. (a) as Subdiv. (2), relettering as necessary; P.A. 79-178 added provision in Subsec. (a) validating mortgages which comply with Subdiv. (1) notwithstanding other agreements re particular sums to be advanced or conditions determining advances, etc.; P.A. 79-602 made minor changes in wording but made no substantive changes.
Statute does not annul 76 C. 388, which still provides the test for future advances not framed in the form suggested by statute. 143 C. 582. Cited. 146 C. 523; 185 C. 463; 202 C. 566; 219 C. 772; 232 C. 294.
Cited. 10 CA 251; 33 CA 563.
Cited. 17 CS 52.
Notes of Decisions
Dart & Bogue Co. v. Slosberg, 522 A.2d 763 (Conn. 1987).
· cites it 16× “) Similar language is contained in General Statutes § 49-3, which validates mortgages to secure future advances when they contain stipulated clauses that the statute describes as “sufficiently definite and certain.”
Connecticut Bank & Trust Co. v. Carriage Lane Assocs., 595 A.2d 334 (Conn. 1991).
· cites it 5× “General Statutes § 49-3 provides in relevant part: “(a) Any mortgage to secure future advancements of money for construction or repair of buildings or improvements on land in this state, including site improvements of every kind with or without the construction or repair of any…”
GMAC Mortg. Corp. v. Glenn, 931 A.2d 290 (Conn. App. Ct. 2007).
· cites it 9× “Section 49-31f (g) provides in relevant part: “No homeowner who files a defense to any action for foreclosure shall be eligible to make application for protection from such foreclosure .”
Am. Bank v. Eagle Constr. Co., 522 A.2d 835 (Conn. App. Ct. 1987).
· cites it 18× “This appeal involves the issue of a mortgagee’s priority, as against a subsequent encumbrancer, of a present advance made by the mortgagee in connection with an open-end construction mortgage which was in conformity with General Statutes § 49-3. The *252 trial court held that…”
L & R Realty v. Connecticut Nat'l Bank, 732 A.2d 181 (Conn. App. Ct. 1999).
· cites it 4× “loan under the note, (b) the terms and conditions governing the bank’s rights to foreclose under the mortgage, (c) the terms and conditions governing the parties’ rights and obligations under the guarantees and (d) the nature, priority and duration of the lien, (3) that the…”
Deutsche Bank Nat'l Trust Co. v. Angle, 933 A.2d 1143 (Conn. 2007).
· cites it 5× “The defendant contended that he did in fact meet the required elements for protection under the act, and also argued that § 49-3 lj-4 of the regulations exceeded the banking commissioner’s statutory authority.”
Seaport Capital Partners, LLC v. Speer, 171 A.3d 472 (Conn. App. Ct. 2017).
· cites it 3× “" We note in passing that Bona incorrectly relies on General Statutes § 49-3, which applies to mortgages securing future advancements of money for construction or repair of buildings or improvements.”
Connecticut Nat'l Bank v. Esposito, 554 A.2d 735 (Conn. 1989).
· cites it 2× “Although the plaintiff argued in its brief that the purported mortgage did not satisfy the statutory requirements of General Statutes § 49-3 lb (a), 4 it recognizes that in order to prevail, the mortgage also must be invalid under common law standards.”
Dart & Bogue Co. v. Slosberg (In Re Dart & Bogue Co.), 52 B.R. 594 (Bankr. D. Conn. 1985).
· cites it 5× “Judge Borden responded as follows: In Calcagno the Superior Court held that disclosure of the name and address of the mortgagee in the mortgage deed was sufficient information under General Statutes § 49-3 lb(a) from which the maximum term of the note could be determined because…”
Naugatuck Sav. Bank v. Fiorenzi, 654 A.2d 729 (Conn. 1995).
· cites it 5× “By contrast, the title to General Statutes § 49-3 1b, which speaks in terms that we have held not to be mandatory, contains no language “to indicate that the information described in the statute is ‘required.”
Shawmut Mortg. Co. v. Wheat, 717 A.2d 664 (Conn. 1998).
· cites it 3× “General Statutes § 49-3 If (b) provides in relevant part that when the “property which is the subject of a foreclosure action is owned by more than one person .”
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