A Florida appeals court on Friday overturned a decision cancelling the foreclosure auction of homeowner Joseph Mills' property in Hillsborough County, nearly two years after it was sold over unpaid homeowners' association fees.
According to the
judgment available on Justia, Mills had paid the outstanding amount just five days after the October 2024 auction and secured the association's support to cancel the sale. However, Real Estate Services Group, the company that bought the property, was not informed or given a chance to object before the cancellation was approved. The appeals court ruled that the buyer's rights had been violated and ordered a fresh hearing.
The dispute began at Hickory Lakes Estates in Florida, where Mills owned a property covered by the rules of a homeowners' association. Residents were required to pay monthly fees, but Mills had fallen behind on his payments. The association eventually placed a lien on his property, which meant it could seek to recover the unpaid money through legal action.
In February 2024, the Hickory Lakes Estates Owners' Association took Mills to court.
By August, it had secured a foreclosure judgment, allowing the property to be sold to recover the debt. The auction was fixed for October 18, 2024.
On September 25, Mills challenged the foreclosure judgment and made an emergency request to have it cancelled. However, he did not pay the amount required under the judgment at that point. With no payment made, the auction went ahead as planned.
Homeowner paid 5 days after auction
At the October 18 auction, a company called Real Estate Services Group, Inc. (RESG) emerged as the highest bidder. The court clerk issued a certificate of sale, confirming that the company had successfully purchased the property at the auction.
But Mills had not given up. On October 23, just five days after the sale, he transferred the amount required under the foreclosure judgment to the association's lawyer.
Having made the payment, Mills returned to court. He informed the judge that the money had been paid and asked for the auction to be cancelled.
This time, the homeowners' association supported him. Both sides agreed that the auction should be cancelled and the money paid by RESG should be returned.
They submitted their agreement to the court and asked the judge to approve it without a hearing. The judge did so, cancelling the auction and stopping the court clerk from issuing the final ownership document to RESG.
However, the company that had won the auction had not been informed about these developments. It had not received Mills' request, the proof of his payment or the agreement submitted to the court.
When buyer discovered sale was cancelled
When RESG learnt that the property sale had been cancelled, it objected. The company had participated in the auction, placed the winning bid and received confirmation of the sale. Yet the decision to cancel its purchase had been made without giving it an opportunity to respond.
RESG asked the lower court to reconsider the decision. Its argument was that buying the property at a court-supervised auction had given it rights that could not simply be ignored.
The court refused to reverse the cancellation. RESG then approached Florida's Second District Court of Appeal, bringing the dispute back before judges nearly two years after the original auction.
The company also questioned whether Mills could still recover the property by paying the debt after the certificate of sale had been issued. However, the appeals court did not decide that question because RESG had not raised it before the lower court.
Whyappeals court sided with the buyer
The appeals court found that RESG should have been included in the proceedings before the auction was cancelled. Although the company had not yet received the final document transferring ownership, it had already acquired a legal interest in the property by winning the auction and receiving the certificate of sale.
The judges said RESG was entitled to know what was being proposed and to explain its position before the court made a decision.
The court also considered earlier Florida cases involving buyers at foreclosure auctions. Those rulings recognised that a successful bidder has rights even before the formal transfer of ownership is completed.
In Mills' case, the lower court had approved an agreement between the homeowner and the association without involving the buyer. The appeals court found that this denied RESG its right to a fair hearing.
The October 23 ruling has not brought the dispute to an end. The appeals court overturned the earlier cancellation order and sent the matter back to the Hillsborough County court.
The lower court must now hold a hearing after giving proper notice to the parties. It will reconsider Mills' objection to the auction and his request to have the sale cancelled.