15-1603.5.Strict foreclosure of an omitted subordinate interest.

Sometimes a recorded subordinate interest — a lien, junior mortgage, or similar claim — never gets named as a defendant in a foreclosure case, even though it attached before the lis pendens notice was filed. This section lets the certificate-of-sale holder, the person who took title after the sale, or any later successor file a strict foreclosure complaint against that omitted interest holder once a motion to confirm the sale is pending or granted.

The complaint has to spell out specifics: how the plaintiff acquired its interest, the docket number and recording details of the earlier foreclosure and mortgage, a legal description of the property, the recorded instrument identifying the omitted interest, the winning bid amount from the earlier sale, an explanation of why the interest holder was left out, and a proposed redemption period with a contact for tendering payment.

If the named defendant doesn't object, the court enters judgment extinguishing the omitted interest. If the defendant does object but won't agree to pay the redemption amount, the court still enters judgment. If the defendant agrees to pay, the court instead issues an order setting the redemption amount — the earlier sale's winning bid plus any taxes, preservation costs, or other protective expenses incurred since the sale, but not the costs of this new suit — and giving the defendant 30 days from the order to pay it. Missing that deadline ends the defendant's interest in the property.

A person whose interest survived the earlier foreclosure has no basis to bring this kind of action, and even a successful strict foreclosure under this section doesn't cut off that person's claim to any surplus sale proceeds still to be distributed.