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In Rem Act Amended: Foreclosure of Abandoned Properties

Foreclosure of Abandoned Properties

The Legislature has enacted P.L. 2015, c. 16, effective ca. Feb. 5, 2015, which amends the In Rem Tax Foreclosure Act, N.J.S.A. 54:5-104.29 et seq., to permit foreclosure in rem of abandoned properties in cases where a tax sale certificate [“TSC”] is held by an individual or entity other than a municipality or governmental body. The enactment adopts the definition of abandoned property found in the Abandoned Properties Rehabilitation Act, N.J.S.A. 55:19-78 et seq. A non-governmental TSC holder, known as an abandoned property certificate holder [“APCH”], seeking to foreclose in rem must obtain a certification from the tax collector or other public official confirming that the property meets the criteria for abandonment set forth in N.J.S.A. 55:19-83. If the certification is not obtained, the court may determine, based on proofs presented by the plaintiff, that the criteria have been met. The APCH is bound by the other restrictions set forth in the In Rem Act, as if the plaintiff were a municipality. Thus, before suit is commenced, the TSC must have been held for at least 6 months, and municipal taxes must have been unpaid for at least 21 months, as provided by N.J.S.A. 54:5- 104.34. Furthermore, notice must be given in accordance with the applicable provisions of the statute and rules of court, such as R. 4:64-7.

It is clear that the Legislature has become increasingly concerned with problems related to abandoned properties. As noted in Title Talk Nos. 89 (Summer 2014) and 90 (Fall 2014), P.L. 2014, c. 5 (eff. July 15, 2014) amended N.J.S.A. 46:10B-51 to impose duties upon lenders seeking to foreclose mortgages encumbering abandoned properties. P.L. 2014, c. 35 (eff. Aug. 15, 2014) amended N.J.S.A. 40:48-2.12 to authorize municipalities to adopt ordinances relating to the maintenance, etc., of vacant or abandoned residential dwellings.

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