Case Law Summaries

CKC Condominium Association, Inc. v. Summit Bank

• Opinion Date: November 29, 2000
• Real Property Law
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DEEDS; SHERIFF’S SALE—A buyer at a Sheriff’s sale is not burdened with the obligations of ownership until the Sheriff’s deed is delivered.

Under the by-laws of a condominium association, each buyer of a condominium unit was required, at the time of purchase, to pay the association a non-refundable sum equal to three months’ assessment charges. A bank holding the mortgage on forty-four condominium units instituted a foreclosure action and obtained a judgment of foreclosure followed by a writ of execution. A sheriff’s sale was conducted on May 11, 1993, and the bank was the only bidder. On June 24, 1993, the sheriff executed and delivered a deed to a subsidiary of the bank. Five days later, that subsidiary conveyed all of the units to an individual pursuant to a prior agreement between the bank and that individual confirmed by letter dated May 10, 1993. On June 15, 1999, more than six years after the sheriff’s sale, but less than six years after the date of the sheriff’s deed, the condominium association filed an action claiming that the bank was obligated to pay the three months’ assessment as provided for in the by-laws. The bank contended that if it became a purchaser at all, it did so at the sheriff’s sale at the moment the property was struck off on acceptance of its bid. Under that theory, the association’s complaint would have been filed beyond the six-year limitations period. The lower court accepted the bank’s position. The Appellate Division disagreed, but emphasized that the only issue before it was when, for statute of limitation purposes, the bank became a purchaser. It left other issues bearing upon the association’s rights against the bank by way of both legal and equitable defenses to a later resolution. The Court noted that the terms “purchaser” and “time of its purchase” were not defined in the by-laws. It did, however, hold that both terms “have a common contextual meaning not only in the legal community but among the public at large as well.” In its view, “one is not regarded as the purchaser chargeable with the burdens of ownership until delivery to him of a deed or other indicia of title.” By example, the Court pointed out that a person under contract to purchase a condominium unit, although he is deemed an equitable owner by reason of the doctrine of equitable conversion, is not obligated to pay the assessments until title is vested in him. In that context, the Court saw no difference between a contract purchaser prior to closing and delivery of the deed and a successful bidder at a sheriff’s sale prior to delivery of the sheriff’s deed. In fact, the rights of a successful bidder are only contingent and the sheriff’s deed is not deliverable until the passage of ten days following the sale, and then, if an objection to the sale is made, not until the hearing on the objection mandated by the rule has been completed. Moreover, a sheriff’s sale is subject to the mortgagor’s usual ten-day right of redemption. Therefore, according to the Court, the six-year statute of limitations was to be measured from the date that the sheriff delivered the deed and not from the date of the sheriff’s sale.

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