Court appointed referees commonly permit successful bidders to assign their bid and vest title via the Referee’s Deed into the entity of their choosing. While defense attorneys making a last ditch effort to oppose a Motion to Confirm the Referee’s Report of Sale may claim this assignment is improper, a review of relevant case law shows that courts believe this to be proper procedure.
The Second Department recognized the near unfettered right of Plaintiff or its assignee to assign its successful bid at a foreclosure auction in Polish National Alliance of Brooklyn U.S.A. In this matter Plaintiff was the successful bidder at auction and assigned the bid to an unrelated party. Subsequently the Referee delivered the Referee’s Deed directly to the third party. The court determined that an assignment of a successful bid should not be set aside absent factors such as diminished bidding competiton or the imposition of other inequitable benefits upon the mortgagee.
Further, the Fourth Department held that Plaintiff has the full power to assign their winning bid to a third party and then direct the Referee to execute the Referee’s Deed directly to that third party. See Geddes Federal Savings & Loan Association v. Ferrante 226 A.D.2d 1099, 642 N.Y.S.2d 109 (1996) and Forest Hill Cementery Association v. Sullivan, et al, 235 A.D. 269, 271 (1932).
In Lennar Northeast Partners Limited Partnership v. Gifalidi the Supreme Court of Monroe County went as far as to recognize the right of Plaintiff to receive a Referee’s Deed executed in blank so that it could secure a buyer for the bid at a later date without having to pay additional transfer taxes. Lennar Northeast Partners Limited Partnership v. Gifaldi et al. 181 Misc.2d 113, 695 N.Y.S.2d 213 (1998).
Perhaps more indicative of the case law listed above is the fact that it is there is no case on point that even questions this absolute right to assign post bid. It appears that an attorney or party claiming otherwise is merely trying to slow down the proceedings.
Written by: Adam J. Friedman, Esq.