Short selling your home? Here’s a tip: start the process well in advance of a scheduled foreclosure sale

A September, 2018 opinion1Ocean Bank v. Gato, 2018 WL 4761845, ___ So.3d ___ (Fla. 3d DCA 2018). from Florida’s Third District Court of Appeals provides guidance on what is not a “lawful, cognizable basis” for cancelling, rescheduling, or continuing a judicial foreclosure sale date, in the absence of an agreement from the plaintiff (lender). In the case below, thirteen days before a foreclosure sale2This was the second foreclosure sale to be scheduled, with the first having been canceled due to the homeowner filing bankruptcy. The bankruptcy case was dismissed not long after it was filed, resulting in the foreclosure sale being reset. was set to occur, the plaintiff/homeowner filed an “emergency” motion to cancel the foreclosure sale, citing as the basis a contemplated short sale, and attaching a short sale contract dated twelve dates prior to the “emergency” motion.

At the hearing on the homeowner’s motion to cancel, the plaintiff/bank explicitly objected, stating, “The bank has declined the short sale which would leave us tens of thousands of dollars short. We have filed our objection in writing and the law says that under those circumstances the motion to cancel the sale should not be granted.” The court’s response? “So what I’m going to do is give it a 90-day resale date with no further continuances.”

The bank appealed this decision to the Third DCA. The appeals court, in citing to Florida Statutes § 45.031(1)(a)3Florida Statutes § 45.031(1)(a) states that “the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof.” The statute continues, “[a] sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time.” (Emphasis added)., said that the court’s rescheduling of the sale was improper as the homeowner’s basis for wanting the sale canceled was not a “lawful, cognizable basis,” in light of the bank’s objection. However, in an odd twist that only an attorney could find interesting, the appeals court, in its enlightened wisdom, affirmed the lower court’s ruling, despite the ruling being wrong, because reversing the decision may have resulted in further delay to the bank’s foreclosure sale.

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1. Ocean Bank v. Gato, 2018 WL 4761845, ___ So.3d ___ (Fla. 3d DCA 2018).
2. This was the second foreclosure sale to be scheduled, with the first having been canceled due to the homeowner filing bankruptcy. The bankruptcy case was dismissed not long after it was filed, resulting in the foreclosure sale being reset.
3. Florida Statutes § 45.031(1)(a) states that “the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof.” The statute continues, “[a] sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time.” (Emphasis added).

Published by Joseph Battaglia

Bradenton attorney Joseph Battaglia handles real estate, bankruptcy, and debtor/creditor litigation matters. He has been licensed since 2008.

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