Motion to Set Aside Sheriff Sale
A motion to set aside sheriff sale is a legal action to recover a property sold at auction. Every year in Philadelphia, thousands of properties are sold at Philadelphia sheriff sale. Most of these properties are sold because owners have defaulted on their mortgages or their taxes. There are two main sales: mortgage foreclosure and tax lien. After a property is sold at sheriff sale anyone with legal standing may petition the court to set aside the sale.
What is a Motion to Set Aside Sheriff Sale?
A motion to set aside is a legal pleading asking the court to effectively cancel a sheriff sale. In Philadelphia, many judges will set aside a sale for good cause. Good cause may be any compelling equitable argument warranting overturning the sale. Many judges are lenient in finding good cause since properties are auctioned at sale without the consent of prior owner. Therefore, if there is a good reason to set aside the sale a prior owner may recover their property by filing a motion to set aside sheriff sale.
Time Frame to File a Motion to Set Aside Sheriff Sale
A motion to set aside sheriff sale should be filed before the sheriff’s deed is recorded. Concord Liberty Sav. and Loan As’n v. NTC Properties, 454 Pa. 472, 312, A. 2d (Pa. 1973). This means a prior owner has four to six weeks to file the motion before losing the right to file a motion to set aside sheriff sale. After the deed is recorded the probability of setting aside a sale is substantially reduced. Some lawyers may argue the court lacks legal authority to set aside a sheriff sale after the deed is recorded under Pa.R.C.P. 3132. Therefore, if you have a legal interest in setting aside a property you must file the petition to set aside in a timely manner.
Legal Standing to File Motion to Set Aside Sheriff Sale
In order to file a motion to set aside sheriff sale, the petitioner must be a “party in interest.” This means the individual filing the lawsuit must have legal standing to bring the claim. Legal standing is governed by Pa.R.C.P. 2327. Under the rule a party has legal standing where the action affects a “legally enforceable interest.” Thus, if you lost your property at a sheriff sale you have the right to intervene and file a motion to set aside sheriff sale. On the other hand, a third-party purchaser has a right to intervene in a civil action to contest a motion to set aside sheriff sale. The Court will hear from all parties including the city, prior owner, and thirty-party purchaser before making a determination on the motion to set aside sheriff sale.
Proper Cause to Set Aside Sheriff Sale
There must be a good reason to set aside a sheriff sale. The most common reason is lack of notice. For example if the property was sold without serving the prior owner with notice there may be a legal basis to set aside the sale under Pa.R.C.P. 3132. Before the City of Philadelphia can sell your property they also must comply with the Pennsylvania Municipal Claims and Tax Liens Act (MCTLA), 53 P.S. Section 7101-7105. Thus, if the prior owner was unaware that his property was being sold he may have a legal basis to set aside the sale.
City of Philadelphia Challenge to Motion
The City will likely challenge the lack of notice argument. Often times the notice of sale is posted to the Property and photos are taken to challenge any subsequent attempts to overturn the sale. Finally, the City usually opposes motions to set aside sheriff sale as setting aside the motion impacts the finality of the auction and may deter investors from purchasing properties. If you have a question about a motion to set aside sheriff sale speak with a qualified Philadelphia real estate and property lawyer.
Third-Party Challenges to Motion to Set Aside
Often times the new owner will challenge a motion to set aside sheriff sale. A third-party purchaser may assert a challenge to a sale by showing good cause to deny the petition. For example, if the third-party purchaser has already made substantial investments in the Property in may weigh against the motion to set aside sheriff sale.
Settlement Before Litigation of Motion
Often times a motion to set aside sheriff sale is settled before actual litigation. For example, a third-party purchaser may agree to set aside a sale in consideration for their costs paid and some return on their investment. On the other hand, a prior owner may argue to withdraw their motion to set aside sheriff sale in consideration for payment of costs. You may consider resolving a motion to set aside by settlement since there is uncertainty in any legal proceeding. One way to mitigate such uncertainty is with a reasonable settlement.
Philadelphia Real Estate Lawyers
If you are seeking to file a motion to set aside sheriff sale contact our experienced Philadelphia real estate and property attorneys. We can assist in drafting the legal pleading to set aside sale and discuss the likelihood of success in your particular matter. For a free consultation call our office at 267-535-9776.