Ninth Circuit Finds Bank May Set Aside HOA Sale Conducted During Bankruptcy As Void

• Published date: 13 December 2021
• Law Firm: Riker Danzig Scherer Hyland & Perretti
• Author: Mr Michael O'Donnell, Michael Crowley, Desiree McDonald and Kevin Hakansson

In a split decision, the United States Court of Appeals for the Ninth Circuit recently determined that the Bank of New York Mellon (the 'Bank'), as first deed of trust lienholder, could challenge a homeowner's association's ('HOA') sale of a property as a violation of an automatic bankruptcy stay, giving the Bank superior title. SeeBank of New York Mellon as Tr. for Certificateholders of CWALT, Inc., Alternative Loan Tr. 2005-54CB, Mortg. Pass-Through Certificates Series 2005-54CB v. Enchantment at Sunset Bay Condo. Ass'n, 2 F.4th 1229 (9th Cir. 2021). In the case, Harold Hill ('Hill') purchased property at 732 Hardy Way, Mesquite, Nevada. The Bank was a first deed of trust lienholder. In January 2014, Hill fell behind in his HOA dues, and...