In a case over a failed home auction, the New Jersey Supreme Court determined real estate auctions are not the same as typical property transactions and do not require a three-day attorney review.
The six-member court said such a mandate would upend an auction’s intended finality with a top bid.
Imposing a three-day attorney review on auctions would “fundamentally interfere with the method by which buyers and sellers choose to conduct such sales,” wrote Justice Anne M. Patterson, who authored the unanimous June 9 opinion.
“Were we to permit counsel to cancel contracts for any reason after an auction as in a traditional real estate transaction, buyers would be deprived of the opportunity to purchase property at a bargain price, and sellers would lose the benefit of an accelerated and final sale,” Patterson said.
Mengxi Liu placed the winning bid of $1.21 million in October 2016 on a residential home in Bernardsville. Brokerage firm Max Spann conducted the auction for the property, owned then by the Sylvester L. Sullivan Grantor Retained Income Trust with John C. Sullivan as trustee. Sullivan entered into a real estate auction agreement with Max Spann.