2026-09-09 · District of Columbia · Courts

The District of Columbia Court of Appeals decided two cases in 2025 that together make it substantially harder for a mortgage lender to unwind a condominium association's assessment-lien foreclosure sale. One closed off the unconscionability attack; the other cut the limitations period from fifteen years to three.

Flagstar: a bargain price is not unconscionable as a matter of law

Flagstar Bank, FSB v. Advanced Financial Investments, LLC, No. 23-CV-0267, was decided April 10, 2025 and is reported at 333 A.3d 851. Judge Deahl wrote for a panel of Judges Beckwith, Deahl and Senior Judge Ruiz.¹

The New Hampshire House Condominium unit owners' association foreclosed in 2014 on unpaid dues. The sale terms said the unit sold subject to Flagstar's first deed of trust of roughly $256,632. A buyer paid $26,000 for a unit assessed at $237,930. Flagstar later sued for judicial foreclosure.

The court held the trial court was wrong that Flagstar's unconscionability argument was time-barred — rebuttals to affirmative defences are not subject to a limitations period — but affirmed anyway on the alternative ground that the sale “as a matter of law, was not unconscionable.” Applying New Penn Financial, LLC v. Daniels, 319 A.3d 997 (D.C. 2024), it held that the fact that Flagstar's lien was specifically identified in the sale terms as surviving was “not a meaningful distinction.”

Claims for declaratory relief and breach of fiduciary duty against the association were time-barred, with neither the discovery rule nor equitable tolling available; an institutional lender, the court said, had a responsibility to keep abreast of the law governing the instruments defining its interests. Only an unjust enrichment claim against the buyer went back for trial.

Tyroshi: three years, not fifteen

Tyroshi Investments, LLC v. U.S. Bank, N.A., No. 23-CV-0977, was decided September 11, 2025, again by Judge Deahl.²

The Jenkins Row association foreclosed in 2014; a buyer paid $10,000. The first-deed-of-trust holder foreclosed separately in 2016 for $385,000, then sued in 2020 to void the association's sale. The trial court applied D.C. Code § 12-301(a)(1), the fifteen-year period for actions “for the recovery of lands,” and voided the sale.

The Court of Appeals reversed. That extended period “applies only to adverse possession or ejectment-type claims seeking to recover physical possession of real property from a party wrongfully occupying it.” A title claim that first requires invalidating a foreclosure sale sounds in tort and contract — three-year clocks that had long since run. Laches was raised too late and does not apply to purely legal claims. Only unjust enrichment survived, and only for taxes and assessments paid within three years of the 2020 complaint.

1. Flagstar Bank, FSB v. Advanced Financial Investments, LLC, No. 23-CV-0267 (D.C. Apr. 10, 2025), 333 A.3d 851 — slip opinion ↩
2. Tyroshi Investments, LLC v. U.S. Bank, N.A., No. 23-CV-0977 (D.C. Sept. 11, 2025) — slip opinion ↩
3. D.C. Code § 42-1903.13, Lien for assessments against a unit ↩