Tag: sheriff’s sales of real property

Homebuyer Beware: Some of the property listings on Zillow are Foreclosures and Sheriff’s Sales

Last year, I had a foreclosure scheduled for a Williamson County property in an “in demand” neighborhood and, somehow, Zillow picked up my Foreclosure Sale Notice and listed my sale on the property’s Zillow page. In April, I wrote a post about the 500 phone calls and emails I received from all over the world, asking about the property.

In fact, I got one today from Detroit.

But, a few minutes later, I got a call about another Zillow listing, this time on a Sheriff’s Sale I’m conducting in August on 2137 Maricourt Street, Old Hickory, Tennessee 37138.

The full Notice of Sheriff’s Sale of Real Property can be found on The Wilson Post’s Public Announcements page. I have no idea how it ended up on Zillow, but anything that generates more potential bidders is good.

As indicated in the Sheriff’s Sale Notice, the property is scheduled for auction at 11:00AM, on August 3, 2021. The Sale Notice contains the terms of sale, including opening bid and the bidding process.

I post here in order provide a quick link to the Notice of Sale, which I’m planning to forward to potential bidders. This should present a great opportunity to a bidder.

In this strong real estate market, there are limited opportunities to find good deals on Middle Tennessee real property. The investors have long figured out foreclosure sales, then they figured out tax sales, and, now, Sheriff’s Sales are the next frontier. Sheriff’s Sales used to be rare–given that the process is fairly complex and confusing (even to lawyers)–but these are becoming more common, given the rise in property values and the unyielding demand for residential real estate.

As Zillow continues to grow into a trusted resource, though, I worry that a typical homebuyer may be lulled into seeing only the upsides of the potential deals listed on Zillow, without fully exploring the risks that distressed asset sales present.

I’m not suggesting that a buyer shouldn’t consider participating in a sheriff’s sale (seriously, please come on August 3), but I am encouraging every caller to educate themselves on the process and to consult with a real estate lawyer in advance.

Does Post-Judgment Interest change every six months? (Probably not)

I had an “in-person” court appearance yesterday morning, renewing and extending a judgment from 2011. As a creditor, old judgments can be a gold-mine, as home values have soared in Middle Tennessee, and a well placed judgment lien might have some equity.

Plus, it’s sort of nice to take a trip down memory lane, back to when creditors automatically got 10% interest on their judgments.

As long time readers know, in 2013, they revised the post-judgment interest rate statute, Tenn. Code Ann. § 47-14-121, and switched to a variable (and lower) rate, subject to change every six months.

Yesterday, in my proposed Order Renewing Judgment that I handed up to the Judge, I included language that the renewed judgment would accrue interest “as provided in the original judgment, at the then applicable rate of interest under state law.”

The Judge asked me if that meant that interest was 10% over all of this time (and into the future) or, instead, was it a variable rate, changing each time the rate changes.

Well, Judge, that’s a legal question that drives hundreds of visitors to my creditor rights law blog every year.

The Judge asked me if I had a case or other authority to show whether or not the rate fluctuates. I hadn’t researched it (because it wasn’t really an issue on this unopposed Motion), so the Judge simply crossed out “then existing rate” and wrote in “applicable rate,” which punted the issue down the road.

But, we sort of have an answer, thanks to a local lawyer’s comment on this blog post from early last year:

From the TNCourts.gov website: “Beginning July 1, 2012, any judgment entered will have the interest set at two percent below the formula rate published by the Tennessee Department of Financial Institutions as set in Public Chapter 1043. The rate does not fluctuate and remains in effect when judgment is entered.”

And, no, that’s not a case or a statutory cite. It’s just an introductory paragraph on the Administrative Office of the Courts website. But, it’s something. And, it’s as good as we’ve got for right now. “The rate does not fluctuate and remains in effect when judgment is entered.”

As a practical matter, the best practice would be to always use a specific interest rate in any judgments. Instead of saying post-judgment interest “as provided under Tennessee law” or at the “applicable post-judgment interest rate,” always just say the a specific rate, whether it’s 5.25% or 7.45%. This text would create a presumption of a specific, certain rate of interest going forward.

As more of these Great Recession era judgments come up for renewal and lenders are dusting off these pre-2013 judgments for execution against houses and defendants with drastically changed circumstances, I’m betting that, very soon, this is going to be an issue that a creditor is going to need briefed.

Judgment Creditors can cross county lines in execution sales of real property, says TN Court of Appeals

Yesterday, the Tennessee Court of Appeals answered another longstanding creditor question: Whether a Court can order an execution sale on a debtor’s real property in a different county.

I get asked that all the time, and I’ve generally said you can. Now, I can cite the new opinion from the Court of Appeals in Ronald L. Jones v. Louise Helms, No. W2019-00864-COA-R3-CV, 2020 WL 6806372 (Tenn. Ct. App. Nov. 19, 2020).

The legal issue is whether the first county court has “subject matter jurisdiction” to order the sale of real property in another county. The Court looked first to Tenn. R. Civ. P. 69.07, which gives the judgment creditor a lien (per Rule 69.07(2) and provides that a creditor “may move for an order of sale. (per Rule 69.07(3)).” But, Rule 69.07 doesn’t provide any guidance on the process, procedure, or venue.

So, the question remains: In which county does the creditor make this request?

The Court wrote:

Rule 69.07(3) does not mandate which court or county a judgment creditor must file the motion in for the order of sale. Furthermore, circuit courts are courts of general jurisdiction, meaning that they have broad, rather than limited jurisdiction. Tenn. Code Ann. § 16-10-101 (“The circuit court is a court of general jurisdiction, and the judge of the circuit court shall administer right and justice according to law, in all cases where the jurisdiction is not conferred upon another tribunal.”). Therefore, it would appear that under the terms of the rule and the broad nature of the jurisdiction conferred upon circuit courts, Appellee was entitled to move for the order of sale in the circuit court for Gibson County. Indeed, it appears to be an accepted practice to file Rule 69.07 motions in circuit courts…. Moreover, Tennessee law generally provides that, with regard to sale of land for the payment of debts by decedents, courts of record “may decree a sale of lands lying in any part of the state.” Tenn. Code Ann. § 16-1-107.

The opinion makes fairly short order of this long-standing legal issue, and the certainty and procedure is good for creditors.

In the past, after my review of the chancery court statutes, I’d often wondered whether a court had jurisdiction to order and approve a sale of real property in a different county. I still have some lingering doubts whether a better challenge and legal argument in response could cast some doubt on this issue, particularly under the chancery jurisdiction statutes.

But, until then, save this opinion. It may save you having to file a Petition for Sheriff’s Sale in a different county to enforce your judgment.

How to Conduct a Sheriff’s Sale of Real Property in Tennessee: It Depends on Who You Ask

Many years ago, the Tennessee Bar Journal ran an article by Knoxville legal luminary Don Paine called “Practical Advice for Collecting a Judgment.”  Clearly, this article got my attention.

In it, Paine outlines how to obtain a judgment lien on real property and how to ultimately sell the property pursuant to that lien. His analysis begins and ends with Tenn. R. Civ. P. 69, which provides that a judgment lien creditor shall file a motion requesting that the court order a sale. In fact, Rule 69.07(4) specifically says “[a]s long as a judgment lien is effective, no levy is necessary”–just file a Motion.

Rule 67.04 provides a specific procedure for a Sheriff’s Sale of real property (i.e. 30 days advance notice; 3 total publications; distribution of proceeds).

But, elsewhere in Tennessee statutes, there’s a different procedure for sheriff’s execution sales of real property. Tenn. Code Ann. § 26-5-101 lays out its own set of rules and requirements, which are differ in minor ways to Rule 69 (i.e. 20 days advance notice).

And, having done my own Sheriff’s Sale earlier this summer, I chuckled when I saw Paine’s article. After I had a Rule 69.07 Motion granted and asked the Clerk to initiate the sale process, the Clerk and Master on my case ignored my Order Granting Motion for Sale, telling me, instead, I need to accomplish the sale by levy and execution.

Side note: One of the things that makes collections interesting is that you’re not just dealing with a Judge anymore, you’re dealing with a Clerk, who may have their own opinions about how things are done.

So, how do you reconcile these differing procedures? And, trust me, these mechanical / procedural issues come up all the time.

Paine’s answer is simple: Under Tenn. Code Ann. § 16-3-406, when a Rule is in conflict with any other law, the Rule prevails.

But, as a practical matter, try telling that to the Clerk, when they say “You need to file a Levy.”

On my sale, here’s what I did: I did both. I had an Order and then issued a Levy on the real property, pursuant to my Order. When the requirements differed, I used the procedure that complied with both.

Sometimes, being right is less important than getting the job done.

Tennessee Law on Sheriff’s Sales Can be Confusing, but Worth the Work

A very long time ago, I wrote that judgment collections may require patience but that, fortunately, Tennessee judgments are valid for ten years.

So, while you may be dealing with a debtor without any money now, keep in mind that this economy can shift for the good, as quick as it went bad. In collections, patience can lead to money.

That was in July 2010, and, man-oh-man, has Nashville’s economy rebounded. If you’ve followed my other advice, way back when, you have already ordered a certified copy of your judgment and recorded it as a lien in the real property records.

So, fast-forward to 2017. If you take that old judgment lien and add in 7-8 years’ worth of property appreciation, maybe it’s time for you to consider conducting a sheriff’s sale of real property pursuant to your judgment lien.

In Tennessee, Sheriff’s Sales are governed by Tenn. R. Civ. P. 69.07(4) and Tenn. Code Ann. § 26-5-101, et. seq. At a recent seminar, I was asked which of the two lines of authority controlled the process: Rule 69; or the Tennessee Code?

The correct answer is, unfortunately, that nobody is entirely sure. So, I guess, the answer is that both control the process.

As a practical matter, when I’m conducting a sheriff’s sale of real property to enforce a judgment, I follow all of the requirements under Rule 69 and also under Tenn. Code Ann. § 26-5-101. Sure, that makes for a lot of “hoops” to jump through, but the hoops are never contradictory.

Given the appreciation in property values, sheriff’s sales can be a very effective collection method.