February 6, 2008
FORECLOSURE BY SALE-PROTECTION FOR BUYER AGAINST PROPERTY DAMAGE
By: George Coppolo, Chief Attorney
You asked what legal protections are available when the people who are being foreclosed on deliberately damage the property after the foreclosure auction but before the transfer of title.
It does not appear that there are any statutory safeguards to protect a purchaser of foreclosed property from intentional damage done to it by the foreclosed owners between the time the committee accepts the purchaser's bid at the auction and the time the closing occurs. However it appears that the purchaser has at least two avenues he or she can pursue to get relief.
According to Denis Caron, an expert in foreclosure law and the author of Connecticut Foreclosures, An Attorney's Manual of Practice and Procedure, a purchaser can ask the court to make him or her a party to the foreclosure and once made a party, to file a motion with the court to either decrease the purchase price or disapprove the sale. Or as an alternative, the purchaser can ask the committee to make a “motion for advice” with the court.
According to Caron, the court has the authority, after considering such motions, to conduct a hearing and to provide an equitable remedy if it sees fit. For example, in theory, the court could order the foreclosing party to pay for the damage if it determined that the committee did not take adequate safeguards to protect the property, or it could order a reduction in the sale price.
Apparently, there is a case pending in the Hartford Judicial District courthouse that raises the issue of the court's authority to provide a remedy under circumstances similar to those you raised in your question. We will follow this case and advise you how it is decided.
In general, a purchaser of foreclosed property takes it as is, with no warranties or guarantees as to its condition. The Fact Sheet-Notice to Bidders form (JD-CV-80 Rev. 3-06), which is given to potential purchasers of foreclosed property ordered sold by the court states that
“The property is being sold “as is,” subject to no contingencies whatsoever. The committee makes no warranties, either express or implied, concerning the property's condition, and no adjustments will be made for any defects that may be discovered after this date…”