Legal Definitions - opening the bidding

Opening the bidding refers to an unethical practice that can occur after a sheriff's sale of real property has officially concluded. It involves invalidating or setting aside a completed sale to allow for the acceptance of a new, higher offer made after the original bidding process has finished. This practice undermines the finality and integrity of the public auction process, potentially discouraging future bidders and creating uncertainty.

Here are some examples to illustrate this concept:

• Imagine a situation where a bank has foreclosed on a house, and the property is put up for a sheriff's auction. At the auction, a buyer, Ms. Chen, submits the highest bid, and the auctioneer declares the sale complete, with Ms. Chen as the successful purchaser. However, the next day, another interested party, Mr. Davies, who either missed the auction or decided to offer more, approaches the sheriff's office with a significantly higher offer for the property. If the sheriff's office or the court then attempts to cancel Ms. Chen's winning bid and reopen the sale to consider Mr. Davies's new, higher offer, this action would be considered opening the bidding.

• Consider a parcel of commercial land being sold by the sheriff to satisfy a court judgment against its previous owner. A real estate investment firm, Horizon Properties, participates in the public auction and submits the winning bid. The auction concludes, and Horizon Properties is declared the rightful buyer. A few days later, a competing firm, Apex Developments, learns about the sale and believes the property was sold for less than its true market value. Apex Developments then submits a substantially higher offer directly to the court overseeing the judgment. If the court or the sheriff's department were to then void Horizon Properties' completed purchase to entertain Apex Developments' new offer, this would be an instance of opening the bidding.