Real Property – Foreclosure Sale – Bona Fide Purchasers – Civil Practice – Service of Process – Sale Price

Bloody Point Property Owners Association, Inc. v. Ashton (Lawyers Weekly No. 011-098-14, 8 pp.) (James Lockemy, J.) Appealed from Beaufort County (Marvin Dukes III, Master-in-Equity) S.C. App.

Holding: The respondent-purchasers had no notice of the Pennsylvania appellants’ claims that they were not properly served with notice of the foreclosure on their Beaufort County property; therefore, respondents were bona fide purchasers, and their title to the property was not affected by appellants’ claims of defective service of process. In light of our finding that respondents were bona fide purchasers without notice, we need not address appellants’ argument regarding improper service.

We affirm the master-in-equity’s denial of appellants’ motion to vacate/set aside the foreclosure sale.

Appellants failed to pay $2,971.70 in assessments to the Bloody Point Property Owners Association, so the Association asserted claims for foreclosure of a lien against the Beaufort County property of appellants, who reside in Pennsylvania. After attempts to serve appellants at their last known address failed, they were served by publication in Beaufort County’s The Island Packet newspaper. The respondent-purchasers bought the property for $8,800 and paid an additional $2,793.20 in taxes and fees.

At the time of the foreclosure sale, the court file reflected that appellants had been served, were in default, had received notice, and were not in the military. Furthermore, respondents made actual payment of the purchase price at the foreclosure sale and acquired title through the master-in-equity deed. Finally, respondents had no notice of any title defect or other adverse claim, lien, or interest in the property. Therefore, the master did not abuse his discretion in determining respondents were bona fide purchasers.

Appellants argue the $11,593.20 foreclosure sale price shocks the conscience. We disagree. Only when judicial sales are for less than 10 percent of a property’s actual value have our courts consistently held the discrepancy to shock the conscience of the court.

Even though appellants bought the property in 2001 for $201,500 and submitted a 2012 appraisal valuing the property at $140,000, the master accepted respondents’ evidence that the property had sold for $10,000 in the 2010 Beaufort County Delinquent Tax Auction (appellants subsequently redeemed the property) and that respondents had the property appraised at $17,000 for the purpose of obtaining title insurance in 2012.

The master held the actual value of the property was less than $115,932; therefore, the $11,593.20 sale price did not shock the conscience of the court. The master did not abuse his discretion.

Affirmed.