PROPERTY: Tax assessments, foreclosures, right of redemption (and their assignments): HUMBERT MORTGAGE, INC. v. REDELL (COA 9/5/2008)

PROPERTY:  Tax assessments, foreclosures, right of redemption (and their

PANEL:  Buckingham Presiding; Stumbo concurs; Capterton concurs
        filing separate opinion
COUNTY:  Boone Cir. Ct.

BUCKINGHAM, Senior Judge.
Humbert Mortgage, Inc. Money Purchase Pension Plan appeals from an order of the Boone Circuit Court approving Westmark Properties, LLC’s purchase and exercise of the right of redemption in certain real property Humbert had purchased at public auction in a master commissioner’s sale.
COA affirmed.

The City of Florence filed an action in rem against 39 parcels of real property, seeking to collect delinquent ad valorem property taxes.  Mortgagee of one of the parcels named in city’s action answered and cross-claimed, and moved for sale of the property to satisfy its lien. The Circuit Court granted the motion and the property was sold to mortgagee. Subsequently,
a limited liability company (LLC) that bought the right of redemption from the son, and sole heir, of the deceased property owner filed notice of its exercise of the right of redemption. The Boone Circuit Court, Paul W. Rosenblum, Special Judge, approved the exercise of the right of
redemption and the mortgagee appealed.

The COA held that the one-year right of redemption applied and
that the son had the legal right to sell the right of redemption to the LLC
which was not subject to mortgagee’s lien.

The time limit for the exercise of a right of redemption when property is sold to satisfy unpaid property taxes is 60 days after the sale. KRS 91.511(2).
In a more typical master commissioner sale, such as when a mortgage holder seeks a sale by the master commissioner, the time limit to exercise a right of redemption is one year.
Because the property did not sell for two-thirds of its appraised value, the right of redemption arose.
In this case, the property was sold to enforce Humbert’s lien; it was not sold pursuant to the City’s action to enforce the collection of property taxes. Therefore, the one-year time limit of KRS 426.530(1) was applicable.

Digested by Michael Stevens

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