Relating to Real Estate

Purchaser at Tax Sale Does Not Have the Right to Move to Strike a Judgment Foreclosing the Right of Redemption

In CapitalSource Bank, f/b/o Aeon Financial, LLC v. First Liberty National Bank of Maryland, No. 1647, Sept. Term, 2013, unreported (Md.Ct.Spec.App. April 13, 2015), First Liberty National Bank of Maryland owned real property in Prince George’s County but did not pay the taxes on the property. Prince George’s County sold the property at tax sale on May 11, 2009, and Aeon Financial, LLC was the high bidder. On November 13, 2009 Aeon filed a complaint to foreclose First Liberty’s right of redemption, and First Liberty consented to the entry of a final judgment on June 15, 2010. On April 17, 2013, Aeon moved to strike the judgment, arguing that its bid was based on “the exorbitant and unreasonable valuation and assessment of the property by the SDAT.” First Liberty opposed that motion. The Circuit Court for Prince George’s County denied Aeon’s motion and granted First Liberty’s motion to compel Aeon to pay the amount due after the tax sale. The Court of Special Appeals affirmed.

The Court of Special Appeals observed that under Maryland Code, Tax-Property Article (“TP”) §14-847(d) only “an interested party” is entitled to file a motion requesting that a judgment foreclosing the right of redemption be stricken, and that under Hardisty v. Kay, 268 Md. 202 (1973), the purchaser at a tax sale is not an interested party who has such a right. TP §14-847(d) was modified in 2002, but the court held that the modification did not change the holding of Hardisty.

In response to Aeon’s charge that the circuit court erroneously ordered Aeon to pay the full amount of the tax sale bid, the Court of Special Appeals held that Hardisty controls, that paying the bid amount was the equitable thing to do, and that the circuit court ruled correctly.

For questions, please contact Ed Levin (410) 576-1900.