Posts Tagged ‘sheriff sale’

Warning for Real Estate Investors: Three Northern California Real Estate Investors Convicted of Rigging Bids at Public Foreclosure Auctions


There are many pitfalls for real estate investors who purchase dIMG_1513istressed property.

In today’s market, good deals are getting harder to come by. With distressed property becoming a scarce resource and competition ever increasing, some real estate investors have resorted to illegal acts to boost their profit.

Investors should know that the Department of Justice as well as State Agencies are cracking down on fraudulent real estate practices.

Today, the Department of Justice announced that a federal jury convicted three real estate investors for their roles in a conspiracy to rig bids at public real estate foreclosure auctions held in Northern California.

This after a 3-week trial.

You can see the press release here.

Based upon the DOJ’s investigation – this was a large conspiracy “to rig bids to obtain hundreds of properties sold at foreclosure auctions. The conspirators designated the winning bidders to obtain selected properties at the public auctions, and negotiated payoffs among themselves in return for not competing. They then held second, private auctions at or near the courthouse steps where the public auctions were held, awarding the properties to conspirators who submitted the highest bids.”


What is particularly striking to me is that including today’s convictions the DOJ report that:

68 individuals have pleaded guilty or been convicted after trial as a result of the department’s ongoing antitrust investigations into bid rigging at public foreclosure auctions in Northern California.


Question for Real Estate Investors:

What type of unfair practices, including bid rigging, do you believe is going on in your state? What are you seeing foreclosure sales?

In Michigan the record numbers of foreclosed properties since 2008 has provided a market (albeit one that is slowing down) for flipping and rehabbing residential real estate.

This has also created opportunities for abuse and fraud.  The real estate legal landscape is complex enough, do yourselves a favor – follow the rules.

You don’t want to expose yourself to undue liability.


Questions? Comments?


Twitter: @JeshuaTLauka


Real Estate Investors: Recent Case Law Highlights Certain Pitfalls of Purchasing at Sheriff Sales

October 2, 2014 2 comments
Those who pick up properties at sheriff sales know there are pitfalls to watch out for.
A recent Michigan Court of Appeals unpublished case highlights one of those pitfalls
The case is WW Michigan Properties v Repokis, No. 316555, 2014 WL 4723822 (Mich Ct App September 23, 2014).
  • Daryl and his ex-wife, Karen Repokis, owned the property and defaulted on the terms of a loan, which ultimately resulted in foreclosure and a sheriff’s sale on December 15, 2011.
  • Two sheriff’s deeds were issued to Michigan Properties on December 15, 2011.
  • Michigan Properties did not record the two sheriff’s deeds until January 5, 2012,  (21 days after the date of their issuance.)
  •  Daryl redeemed the property on January 4, 2013, and then quitclaimed his interest in six of the seven parcels to Harsens Properties the same day.
  • Michigan Properties claimed the redemption was late, and filed a lawsuit to stop Daryl’s redemption.


When does the redemption period end?  Does the clock start ticking at the day of the foreclosure sale, or does it start when the deeds were actually recorded (since they were not recorded within 20 days of the sale)


You Must Record a Sheriff’s Deed Within 20 Days of the Sale

MCL 600.3232 provides the procedure when property is sold at sheriff’s sale in pertinent part:
The officer or person making the sale shall forthwith execute, acknowledge, and deliver, to each purchaser a deed of the premises bid off by him…And he shall endorse upon each deed the time when the same will become operative in case the premises are not redeemed according to law. Such deed or deeds shall, as soon as practicable, and within 20 days after such sale, be deposited with the register of deeds of the county in which the land therein described is situated, and the register shall endorse thereon the time the same was received …. [Emphasis added.]
As the Court held: “The plain language of MCL 600.3232 provides that a sheriff’s deed must be filed as soon as practicable, and within 20 days after the foreclosure sale. “Shall” designates a mandatory provision, Smitter, 494 Mich. at 136, and by not filing the sheriff’s deeds with the register of deeds within 20 days of the foreclosure sale, Michigan Properties failed to comply with MCL 600.3232.
“However, MCL 600.3232 does not provide the consequences for its violation. And, in Mills v. Jirasek, 267 Mich. 609, 614–615; 255 NW 402 (1934), our Supreme Court held that the recording provision in MCL 600.3232 is “directory,” as distinct from “mandatory,” and that an untimely recorded sheriff’s deed generally remains valid absent a showing of material harm or prejudice.” WW Michigan Properties v Repokis, No. 316555, 2014 WL 4723822 (Mich Ct App September 23, 2014)”
Conclusion: The Court of Appeals held that the trial court properly concluded that the redemption period ended one year from the date of the recording of the deeds.
Therefore, WW Michigan Properties’ failure to record its deed caused unfair surprise – the general public, particularly the borrower, Daryl, should have relied on when the deed was recorded, if it was recorded much later, otherwise, they do not know who owns the Property, and when they can redeem.
Lesson: There are consequences for failing to record a deed timely. WW Michigan Properties went an entire year with a sheriff’s deed and ultimately had to return the property, think of the costs they incurred, not to mention the legal fees.