ARS Investors II 2012-1 HVB, LLC v. Crystal, LLC
Annotate this CaseDefendant, the owner of real property, filed a subdivision map that purported to subdivide the property into three new parcels. Defendant, however, did not obtain permission from the city planning and zoning authorities before filing the revised subdivision map. Defendant subsequently obtained a mortgage loan from a predecessor-in-interest to the substitute plaintiff. The loan was secured by a mortgage on two of the tracts. Defendant later defaulted on the mortgage loan, and plaintiff’s predecessor-in-interest commenced this action to foreclose on the mortgage. Defendant objected to the foreclosure, arguing that a judgment of foreclosure would have the effect of validating an illegal subdivision of property. The trial court rendered judgment in favor of Plaintiff and ordered a strict foreclosure of the two tracts. The Supreme Court affirmed, holding that a trial court may render a judgment of foreclosure on mortgaged property that consists of parcels of land within a subdivision that has not been approved by municipal zoning authorities.
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