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A JUDICIAL FORECLOSURE SALE SHOULD BE SET ASIDE IF THERE IS DOUBT ABOUT THE TITLE (HERE SUSPICION A DEED WAS FORGED); CAVEAT EMPTOR (BUYER BEWARE) IS NOT STRICTLY APPLIED TO A JUDICIAL SALE AT AUCTION (SECOND DEPT). ​

The Second Department, reversing Supreme Court and setting aside the judicial foreclosure sale, determined the possibility a deed was forged cast suspicion on the fairness of the sale. The court noted that caveat emptor (buyer beware) is not strictly applied to a judicial sale:

“‘[A] purchaser at a judicial sale should not be compelled by the courts to accept a doubtful title,’ and, ‘if it was bad or doubtful, he [or she] should, on his [or her] application, be relieved from completing the purchase'” … .

Moreover, “[t]he rule that a buyer must protect himself [or herself] against undisclosed defects does not apply in all strictness to a purchaser at a judicial sale” … . “[A] sale of land in the haste and confusion of an auction room is not governed by the strict rules applicable to formal contracts made with deliberation after ample opportunity to investigate and inquire” … .Golden Bridge, LLC v Rutland Dev. Group, Inc., 2023 NY Slip Op 03854, Second Dept 7-19-23

Practice Point: Here the purchase of property at a foreclosure judicial sale was set aside because of suspicion a deed was forged. The doctrine of caveat emptor (buyer beware) is not strictly applied to a judicial sale.

 

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