May a sheriff’s sale be set aside when the foreclosure judgment granting the sale is later reversed?

Lee v. Rich

Facts: A homeowners’ association (HOA) places an assessment lien on a property in its common interest development (CID) when the owner fails to pay multiple delinquent HOA assessments. The HOA obtains a judgment to foreclose on its lien and the property is sold to a third-party buyer at a sheriff’s sale. After the statutory redemption period elapses, the foreclosed owner obtains a judgment to vacate the HOA’s foreclosure judgment.

Claim: The foreclosed owner seeks to set aside the sheriff’s sale, claiming the sale is void since the foreclosure judgment granting the sale was vacated.

Counter claim: The buyer claims the foreclosed owner may not set aside the sale since a sheriff’s sale is absolute.

Holding: A California court of appeals holds the foreclosed owner may not set aside the sheriff’s sale since, though the foreclosure judgment was vacated, the sheriff’s sale is absolute and may not be set aside unless the sale was improper and the home was sold to the lienholder. [Lee v. Rich (November 30, 2016)_CA4th_]