What Happens If My Property Is Wrongfully Seized and Sold at Auction?


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In some instances, a party has the right to reclaim property and sell it off at auction. This can be the case in a number of legal actions, including home foreclosures, vehicle repossessions and storage locker auctions. Additionally, this party is often entitled to receive a deficiency judgment for any amount that the former property owner still owes after subtracting the proceeds and costs of the sale.

However, even when the party has a right to claim property and sell it off, there are specific rules that the party must follow. If a party wrongfully seizes property and sells it at auction, there may be a number of civil remedies available to the property owner.

Wrongful Foreclosure Actions

Foreclosure laws are based on state laws and vary in each jurisdiction. However, if property is in the foreclosure process, there must be a number of specific steps followed. This usually requires that the lender provide notice to the property owner of its

intent to foreclose the property.

If the defendant causes an illegal, fraudulent or willfully oppressive sale of property that harms the plaintiff when the borrower has cured the indebtedness or was excused from curing it, the property owner may be able to bring forth an action for wrongful foreclosure. This is based on the applicable state law, such as California’s law on the subject. The types of damages that are available in the case also depend on state law. For example, California has held that a plaintiff can recover tort damages in a wrongful foreclosure case, including moving expenses, lost rental income, emotional distress, damage to credit and punitive damages. Consult a lawyer in your jurisdiction to learn about the applicable rules and your right to recovery.

Storage Lockers

The contents of storage lockers are sometimes auctioned off when renters are behind on payments. However, most states require that storage locker companies provide notice and follow a specific procedure. For example, the storage company may be required to send two notices to the property owner before it plans to deny access to the property. Failing to strictly comply with these requirements can result in the storage company’s liability in a civil claim against it. These rules usually do not differentiate between intentional or accidental conduct.

Repossession

Sometimes a vehicle or other item that a consumer is making payments on is seized by the company if the property owner misses payments or otherwise breaches the agreement. In cases of repossession, the lender often is not required to provide advance notice of its intent to repossess. However, there are usually specific rules that it must follow after repossession.

State laws are usually very specific on this subject. For example, they may state that the agent responsible for repossession must provide notice to the property owner within 48 hours of the time of repossession. This notice may have to contain specific information, such as the reason for seizure and a list of personal items in the vehicle. The notice may need to state how the property owner can reclaim his or her personal property and how the property is going to be sold, including the manner of sale, date and time. Notice may also be required to indicate the conditions upon which the property owner can reclaim the property that was seized.

If the repossessor fails to comply with the repossession laws, the legal effect is usually that it is not entitled to a deficiency judgment. In some states, the property owner may be entitled to a return of the taken property.

Conversion

For a civil case involving what you perceive as theft, conversion is the usual legal theory. Suing someone successfully for conversion requires that you show that you have the right to possess personal property that is the subject of the lawsuit, the defendant intentionally interfered with this personal property, the interference was such that it deprived you of possession or use of the property and you suffered damages as a result. If successful, the defendant can be ordered to pay damages, including punitive damages where appropriate.

Seizures from the Government

If the government has wrongfully seized property, the process to reclaim it is often long and expensive. Through an attorney, you may need to file a motion to set aside a civil forfeiture or to release the forfeiture. The process of reclaiming the property or being compensated for its proceeds at auction depends on the reason why the property was taken, its use, your connection to it and other factors that differentiate cases.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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