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April 04, 2014

Purchaser of a sheriff’s deed obtains full legal title that is effective back to the date of the sheriff’s sale once the redemption period expires

In Wells Fargo Bank v Country Place Condominium Association, the Court of Appeals held that a bank, which obtained title to a condominium unit by purchasing the unit at a sheriff’s sale, was responsible for condominium association fees incurred from the date of the sale onward.  Under MCL 559.158, a purchaser of a condominium unit as a result of foreclosure is not liable for condominium association fees “that became due prior to the acquisition of title to the unit.”  The Court rejected the bank’s argument that it should not be responsible for the association fees until the date the redemption period expired and it obtained full legal title.  The Court disagreed with the bank because the purchaser of a sheriff’s deed acquires equitable title on the date of purchase, and once the right to redemption is exercised, the equitable title “automatically becomes full legal title that is effective back to the date of the sheriff’s sale.”  Accordingly, the “acquisition of title” occurred on the date of the sale rather than on the date the redemption period expired.

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