Extended Right of Redemption for Sheriff Sale

Appellate Division – Extending Right of Redemption is an Appropriate Remedy for Lack of Notice of Adjourned Sheriff Sale

In an unpublished opinion released on July 13, 2017, the New Jersey Appellate Division affirmed a Chancery Division decision denying a mortgagor’s motion to vacate a sheriff’s sale in a foreclosure matter where the lender was not able to provide proof that the mortgagor had actual notice of an adjourned sale. The Appellate Division agreed with the trial court that the appropriate remedy in such a situation was to extend the right of redemption, putting the mortgagor in the same position she would have been in had notice been provided, allowing her an opportunity to redeem the property if possible.

In the matter, Deutsche Bank Nat’l Trust Co. v. Hwang, Docket No. A-2949-15 T2, a final judgment of foreclosure was entered in August 2010 and the sheriff’s sale was scheduled for December 2010. Over the next four years, the sale was adjourned a number of times to permit efforts at loss mitigation and as a result of multiple bankruptcy filings. In August 2013, the mortgagor sought an adjournment of the scheduled sale to permit her to sell the property, acknowledging in a certification that she could not keep the property. The property was finally sold at a sheriff’s sale on December 4, 2015. The defendant mortgagor contended that she was not provided with actual notice of this adjourned sale date. The trial court granted an request to extend the right of redemption, but denied the mortgagor’s subsequent motion to vacate the sale.

In affirming the trial court, the Appellate Division held that Rule 4:65-2 contains an implicit requirement that the mortgagor be given actual notice of the actual sale date, but that where there is a failure of actual notice, “the appropriate relief will depend on the circumstances.” The Appellate Division cited the New Jersey Supreme Court decision of United States ex rel. U.S.D.A. v. Scurry, 193 N.J. 492 (2008), where the Court’s remedy for a failure of notice included an extension of the redemption period, allowing the mortgagors the same opportunity to redeem they would have had if notice had been proven. In this matter, the Appellate Division reasoned that although there was no actual proof that the defendants had knowledge of the date of the adjourned sale, their multiple requests for a stay indicated they were aware the sale was progressing. Further, the extension of the redemption period put them in the same position they would have been in had there been notice of the sale. As there was no abuse of discretion by the trial court in denying the motion to vacate the sheriff’s sale, the trial court was affirmed.

Robert D. Bailey, Esq., drafted the respondent’s brief on behalf of the plaintiff/respondent, Deutsche Bank Nat’l. Trust Co.