Background
Hickory Lake Estates Owners’ Association sued homeowner Joseph Mills to foreclose a lien for unpaid association fees. The county court entered a final judgment of foreclosure and scheduled a judicial sale. Real Estate Services Group, Inc. (RESG) submitted the highest bid, and the clerk issued a certificate of sale on October 18, 2024.
Five days later, Mills paid the judgment amount to the Association’s counsel and filed an objection to the sale and an emergency motion to vacate it. Mills and the Association submitted an agreed order vacating the sale and returning RESG’s funds, but they did not serve RESG with the motion, proof of payment, or proposed order. The county court entered the order ex parte and later denied RESG’s motion to vacate it.
The Court’s Holding
The Second District held that RESG acquired a protectable legal interest when it purchased the property at the judicial sale and the clerk issued the certificate of sale. Although that interest remained inchoate during the objection period, procedural due process entitled RESG to notice and an opportunity to be heard before the court took the interest away by vacating the sale.
Because the county court vacated the sale without notifying or hearing from RESG, the appellate court reversed and remanded for a duly noticed hearing on Mills’ objection and emergency motion. The court did not decide RESG’s separate argument that Mills’s right of redemption ended when the certificate of sale issued because RESG had not preserved that argument below.
Key Takeaways
- A third-party purchaser obtains a protectable legal interest upon purchasing property at a judicial sale and receiving a certificate of sale.
- A trial court violates due process by vacating a foreclosure sale without giving the purchaser notice and an opportunity to be heard.
- An appellate court generally will not consider a foreclosure argument that was not raised in the trial court.
Why It Matters
The decision confirms that parties cannot undo a completed judicial sale through an agreed, ex parte order without including the successful third-party bidder. Even before a certificate of title issues, the purchaser’s interest is sufficient to require notice and a hearing.
The ruling does not determine whether the sale ultimately must stand or whether Mills retained a right of redemption. It requires the county court to reconsider the request to vacate the sale through a process that permits RESG to participate.