Winrose Homeowners' Association v. HaleAnnotate this Case
Homeowners Devery and Tina Hale purchased their home (the Property) twenty-one years ago and made timely mortgage payments ever since, accruing over $60,000 in equity in the Property, which had a fair market value of $128,000. However, after failing to pay $250 in homeowners' association dues to Winrose Homeowners' Association, Inc. (the HOA), the HOA foreclosed on the Property, and a third-party purchaser, Regime Solutions, LLC (Regime), bought it for a pittance. The Hales challenged the judicial sale, arguing the winning bid price of approximately $3,000 was grossly inadequate compared to the value of the Property. The South Carolina Supreme Court found there were two methods used to determine whether a winning bid at a foreclosure is grossly inadequate. While it did not draw a bright-line rule requiring the use of one method over the other, here, Regime took no affirmative steps to assume the Hales' mortgage. As a result, in determining whether the purchase price was grossly inadequate, the Supreme Court found it would be wholly inappropriate to add the value of the mortgage to Regime's winning bid. "When the value of the mortgage is not added to Regime's winning bid, the bid shocks the conscience of the court." The Supreme Court therefore reversed the judicial sale and remanded to the master-in-equity.