A purchaser at a Judicial Foreclosure Sale must give a bond for the price, with good surety approved by the Master Commissioner, KRS Section 451.180.
A surety is one who undertakes to pay money or to do any other act in the event that this principal, who would be the purchaser at the Judicial Foreclosure Sale, fails therein.
Requirements of a Surety:
- The Surety for a Purchaser at a Judicial Foreclosure Sale must be on the following:
a. A lending institution authorized and doing business in Kentucky.
b. A reputable fidelity or surety company, authorized and doing business in Kentucky.
c. A resident of the State of Kentucky, KRS Section 454.185.
- The Surety must be worth double the sum to be secured beyond the amount of his debts and have property liable to execution in Kentucky equal to the sum to be secured. If there be two or more sureties in the same bond, they must, in the aggregate have the prescribed qualifications, KRS Section 454.185.
- Said surety must be acceptable to the Master Commissioner no later than the Monday prior to the particular sale date potential Purchaser will be bidding at.
- An authorized officer of the Surety must be present at the sale or must have given the Master Commissioner adequate assurance of its intent to be Surety prior to or at the sale.
Failure to comply with Requirements:
Purchaser may be required to comply with the terms of sale.
Brassfield v Burgess, Ky., 10 S.W. 122 (1888).
The Court may direct that a purchaser who failed to execute bonds shall not be allowed to bid at a second sale. Wigginton v Nehan, Ky., S.W. 196 (1903).
When the purchaser at judicial sale fails to comply with terms of sale by executing bonds, the sale may be reported to Court and confirmed and the purchaser proceeded against for contempt or a resale may be ordered and the Purchaser at the first sale be liable for the difference between price at first and second sales.
Cowper v Weaver, Ky., 84 S.W. 323 (1905), See also, Makesmson v Braun, Ky., 37 S.W. 495 (1896), Tyler v Guthrie, Ky., 34 S.W. 934 (1896), Shirley v Shewmaker, Ky., 36 S.W. 11 (1901), Napper v Mutual Life Insurance Co., Ky., S.W. 28 (1899), Blakely v Hughes, Ky., 130 S.W. 1067 (1910), Kelly v Sale, Ky., 170 S.W. 153 (1914).
These terms must be complied with and are not subject to exception.