The term of an auction sale of a cooperative unit for unpaid maintenance charges stated that “the winning bidder would be responsible for any maintenance arrears” and that the sale was “subject to ...any maintenance due at the Closing to the Co-op Corporation”. The Plaintiff, the assignee of the successful bidder, sought an Order annulling that provision requiring him to pay unpaid maintenance up to the date of sale, as well as maintenance and assessments that accrued while the sale was stayed when the prior holder of the cooperative interest contested the auction. The Uniform Commercial Code’s Section 9-615 (“Application of proceeds of disposition”) provides only that maintenance arrears are to be paid from the proceeds of sale after expenses of the sale are paid.

The Supreme Court, Westchester County, holding that the Plaintiff was required to pay all maintenance arrears and assessments through the date of the closing, denied the Plaintiff’s motion for relief, granted the Defendants’ cross-motion for an Order dismissing the complaint, and directed the Plaintiff to pay the maintenance charges due. According to the Court,

“…the terms of sale were read aloud prior to the auction, and they indicated unequivocally that the winning bidder would be responsible for any maintenance arrears. Nothing in the papers indicates that plaintiff, or his agent, was somehow pressured to bid on the property. His agent was free to walk away from the auction at any time, or to bid on a property that did not include such a term”.

As to maintenance charges accruing during the stay of the sale, the defendants, which included the holder of the legal title of a loan on the cooperative interest and the loan servicer, “took all available steps to expedite the process of having the complaint [in the action brought by the prior holder of the cooperative interest] dismissed” and the Plaintiff did not attempt to intervene in that Action. Stavinsky v. Prof-2013-S3 Legal Title Trust, 2018 NY Slip Op 28160, decided May 10, 2018, is posted at

http://www.nycourts.gov/reporter/3dseries/2018/2018_28160.htm.