On October 15, 2025, the Second Department issued a decision in Nationstar Mtge., LLC v. Lalman, 2025 NY Slip Op. 05689, holding that a buyer was obligated to close even though a prior owner was challenging a foreclosure sale, explaining:
The plaintiff’s predecessor in interest commenced this foreclosure action against the defendant Nigel Lalman (hereinafter the mortgagor), among others, which resulted in an order and judgment of foreclosure and sale. The mortgaged property was sold at a foreclosure sale held on August 18, 2022. Nonparty Robert Ainehsazan, on behalf of BH Fifth Avenue, LLC (hereinafter the purchaser), was the successful bidder. The purchaser executed a terms of sale and paid a deposit of 10% of the purchase price. The terms of sale made time of the essence as to the purchaser.
Prior to the scheduled closing date, the mortgagor moved, inter alia, to set aside the foreclosure sale, arguing, among other things, that the plaintiff had failed to provide proper notice of the sale. The mortgagor’s motion was denied, inter alia, based on the fact that the mortgagor was in default and had not moved to vacate his default prior to filing the motion. During the pendency of the mortgagor’s motion, the purchaser refused to close and sought the return of his deposit. The plaintiff moved to deem the purchaser to be in default under the terms of sale, to direct the referee to tender the deposit given by the purchaser to the plaintiff, and to permit the plaintiff to schedule a foreclosure sale. The purchaser cross-moved to compel the referee to return the deposit given pursuant to the terms of sale. In an order dated August 17, 2023, the Supreme Court granted the plaintiff’s motion and denied the purchaser’s cross-motion. In an order and judgment dated January 30, 2024, the court granted the same relief to the plaintiff, deemed the purchaser to be in default under the terms of sale, directed the referee to tender the deposit given by the purchaser, in the sum of $85,000, to the plaintiff, and directed that the plaintiff was permitted to schedule a foreclosure sale. The purchaser appeals.
. . . Contrary to the purchaser’s contention, the mortgagor’s pending motion did not create a cloud on title that excused the purchaser’s obligation to close. A marketable title is a title free from reasonable doubt, but not from every doubt. Here, the mortgagor’s actions did not render title unmarketable. Therefore, the Supreme Court properly granted the plaintiff’s motion to deem the purchaser to be in default under the terms of sale, to direct the referee to tender the deposit given by the purchaser to the plaintiff, and to permit the plaintiff to schedule a foreclosure sale, and denied the purchaser’s cross-motion to compel the referee to return the deposit given pursuant to the terms of sale.
(Internal quotations and citations omitted).