SC Supreme Court Crafts New Foreclosure Law

Standard

foreclosureFailure to file bond does not render appeal moot

In a case decided on November 4*, the Supreme Court of South Carolina interpreted S.C. Code §18-9-170** in a way that may come as a surprise to dirt lawyers.

The case arose from the foreclosure of an HOA lien. The absentee owner defaulted in the foreclosure and did not appeal. Instead, he moved to vacate the resulting sale. When his motion to vacate was denied, the master issued a deed to the successful bidder, and the defaulting owner appealed without filing an appeal bond.

The Court of Appeals dismissed the appeal, holding that the property owner failed to comply with the statute that would have stayed the sale, and, therefore the master-in-equity’s deed rendered the appeal moot.

The Supreme Court reversed and remanded the case to the Court of Appeals for a decision on the merits.

Real estate practitioners have likely read §18-9-170 to mean that failure to file a bond in this situation renders the appeal moot. This case indicates that the failure to file a bond may not be an issue. If no bond is filed, the master may issue the deed to the successful bidder, but the appeal can proceed. By implication, if the appeal is successful, then the purchaser’s deed may be set aside. The Court specifically stated that the master’s deed does not moot the appeal, and the appellate court may reach the merits.

For title examiners and the lawyers who rely on title examinations, this case means that whether or not an appeal bond has been filed, we must pay attention to a case on appeal.

* Wachesaw Plantation East Community Services Association, Inc., v. Alexander, Appellate Case No. 2012-21340, Opinion 27585

** S.C. Code §18-9-170 reads in relevant portion: “If the judgment appealed from directs the sale or delivery of possession of real property, the execution of the judgment shall not be stayed unless a written undertaking be executed….”

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