ASSEMBLY, No. 2952

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED FEBRUARY 16, 2016

 


 

Sponsored by:

Assemblyman  BOB ANDRZEJCZAK

District 1 (Atlantic, Cape May and Cumberland)

Assemblyman  R. BRUCE LAND

District 1 (Atlantic, Cape May and Cumberland)

Assemblywoman  SHEILA Y. OLIVER

District 34 (Essex and Passaic)

Assemblyman  RAJ MUKHERJI

District 33 (Hudson)

Assemblywoman  ANGELICA M. JIMENEZ

District 32 (Bergen and Hudson)

 

Co-Sponsored by:

Assemblyman Holley

 

 

 

 

SYNOPSIS

     Requires creditors to maintain vacant and abandoned non-residential properties under foreclosure.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act requiring creditors to maintain vacant and abandoned non-residential properties under foreclosure and amending P.L.2014, c.35 and P.L.2008, c.127.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 1 of P.L.2014, c.35 (C.40:48-2.12s) is amended to read as follows:

     1.    a. The governing body of any municipality may adopt ordinances to regulate the care, maintenance, security, and upkeep of the exterior of vacant and abandoned [residential] properties on which a summons and complaint in an action to foreclose has been filed.

     b.    (1) An ordinance adopted pursuant to subsection a. of this section shall provide that the creditor filing the summons and complaint in an action to foreclose shall be responsible for the care, maintenance, security, and upkeep of the exterior of the vacant and abandoned [residential] property, and if located out-of-State, shall be responsible for appointing an in-State representative or agent to act for the foreclosing creditor.

     (2)   An ordinance adopted pursuant to subsection a. of this section shall authorize a public officer, appointed pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), or any other local official responsible for administration of any property maintenance or public nuisance code to issue a notice to the creditor filing the summons and complaint in an action to foreclose, if the public officer or other authorized municipal official determines that the creditor has violated the ordinance by failing to provide for the care, maintenance, security, and upkeep of the exterior of the property.  Such notice shall require the person or entity to correct the violation within 30 days of receipt of the notice, or within 10 days of receipt of the notice if the violation presents an imminent threat to public health and safety.  The issuance of a notice pursuant to this paragraph shall constitute proof that a property is "vacant and abandoned" for the purposes of P.L.2012, c.70 (C.2A:50-73).

     (3)   An ordinance adopted pursuant to subsection a. of this section shall provide that an out-of-State creditor include the full name and contact information of the in-State representative or agent in the notice required to be provided pursuant to paragraph (1) of subsection a. of section 17 of P.L.2008, c.127 (C.46:10B-51).

     c.     (1) An out-of-State creditor subject to an ordinance adopted pursuant to subsection a. of this section found by the municipal court of the municipality in which the property subject to the ordinance is located, or by any other court of competent jurisdiction, to be in violation of the requirement to appoint an in-State representative or agent pursuant to the ordinance shall be subject to a fine of $2,500 for each day of the violation.  Any fines imposed on a creditor for the failure to appoint an in-State representative or agent shall commence on the day after the 10-day period set forth in paragraph (1) of subsection a. of section 17 of P.L.2008, c.127 (C.46:10B-51) for providing notice to the municipal clerk that a summons and complaint in an action to foreclose on a mortgage has been served.

     (2)   A creditor subject to an ordinance adopted pursuant to subsection a. of this section found by the municipal court of the municipality in which the property subject to the ordinance is located, or by any other court of competent jurisdiction, to be in violation of the requirement to correct a care, maintenance, security, or upkeep violation cited in a notice issued pursuant to the ordinance shall be subject to a fine of $1,500 for each day of the violation.  Any fines imposed pursuant to this paragraph shall commence 31 days following receipt of the notice, except if the violation presents an imminent risk to public health and safety, in which case any fines shall commence 11 days following receipt of the notice.

     d.    No less than 20 percent of any money collected pursuant to subsection a. of this section shall be utilized by the municipality for municipal code enforcement purposes.

(cf:  P.L.2014, c.35, s.1)

 

     2.    Section 17 of P.L.2008, c.127 (C.46:10B-51) is amended to read as follows:

     17.  a. (1) A creditor serving a summons and complaint in an action to foreclose on a mortgage on [residential] property in this State shall, within 10 days of serving the summons and complaint, notify the municipal clerk of the municipality in which the property is located that a summons and complaint in an action to foreclose on a mortgage has been filed against the subject property.  The notice shall contain the name and contact information for the representative of the creditor who is responsible for receiving complaints of property maintenance and code violations, may contain information about more than one property, and shall be provided by mail or electronic communication, at the discretion of the municipal clerk.  In the event the creditor that has served a summons and complaint in an action to foreclose on a [residential] property is located out-of-State, the notice shall also contain the full name and contact information of an in-State representative or agent who shall be responsible for the care, maintenance, security, and upkeep of the exterior of the property if it becomes vacant and abandoned.  If the municipality has appointed a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal clerk shall forward a copy of the notice to the public officer or shall otherwise provide it to any other local official responsible for administration of any property maintenance or public nuisance code.

     In the event that the property being foreclosed on is an affordable unit pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), then the creditor shall identify that the property is subject to the "Fair Housing Act."

     The notice shall also include the street address, lot and block number of the property, and the full name and contact information of an individual located within the State who is authorized to accept service on behalf of the creditor.  The notice shall be provided to the municipal clerk within 10 days of service of a summons and complaint in an action to foreclose on a mortgage against the subject property.

     (2)   Within 30 days following the effective date of P.L.2009, c.296 (C.2A:50-69 et al.), any creditor that has initiated a foreclosure proceeding on any residential property which is pending in Superior Court shall provide to the municipal clerk of the municipality in which the property is located, a listing of all residential properties in the municipality for which the creditor has foreclosure actions pending by street address and lot and block number.  If the municipality has appointed a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal clerk shall forward a copy of the notice to the public officer, or shall otherwise provide it to any other local official responsible for administration of any property maintenance or public nuisance code.

     (3)   Within 30 days following the effective date of P.L.    , c.    (pending before the Legislature as this bill), any creditor that has initiated a foreclosure proceeding on any non-residential property which is pending in Superior Court shall provide to the municipal clerk of the municipality in which the property is located, a listing of all non-residential properties in the municipality for which the creditor has foreclosure actions pending by street address and lot and block number.  If the municipality has appointed a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal clerk shall forward a copy of the notice to the public officer, or shall otherwise provide it to any other local official responsible for administration of any property maintenance or public nuisance code.

     b.    If the owner of a [residential] property vacates or abandons any property on which a foreclosure proceeding has been initiated or if a [residential] property becomes vacant at any point subsequent to the creditor's filing the summons and complaint in an action to foreclose on a mortgage against the subject property, but prior to vesting of title in the creditor or any other third party, and the exterior of the property is found to be a nuisance or in violation of any applicable State or local code, the local public officer, municipal clerk, or other authorized municipal official shall notify the creditor or the representative or agent of an out-of-State creditor, as applicable, which shall have the responsibility to abate the nuisance or correct the violation in the same manner and to the same extent as the title owner of the property, to such standard or specification as may be required by State law or municipal ordinance.  The municipality shall include a description of the conditions that gave rise to the violation with the notice of violation and shall provide a period of not less than 30 days from the creditor's receipt of the notice for the creditor to remedy the violation.  If the creditor fails to remedy the violation within that time period, the municipality may impose penalties allowed for the violation of municipal ordinances pursuant to R.S.40:49-5.

     c.     If the municipality expends public funds in order to abate a nuisance or correct a violation on a [residential] property in situations in which the creditor was given notice pursuant to the provisions of subsection b. of this section but failed to abate the nuisance or correct the violation as directed, the municipality shall have the same recourse against the creditor as it would have against the title owner of the property, including but not limited to the recourse provided under section 23 of P.L.2003, c.210 (C.55:19-100).

(cf:  P.L.2014, c.35, s.2)

 

     3.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill would require creditors to maintain vacant and abandoned non-residential properties under foreclosure.  Current law only requires creditors to maintain the exterior of vacant and abandoned residential properties under foreclosure.  Vacant and abandoned commercial and other non-residential properties present the same kinds of maintenance issues to communities as do vacant and abandoned residential properties.  This bill would extend creditors’ responsibility to maintain vacant and abandoned properties under foreclosure to include non-residential properties so that municipalities do not bear the cost of maintaining these properties.  The bill would also require creditors to notify each municipality of new and pending foreclosure actions on vacant and abandoned non-residential properties within the municipality.

     The bill would also allow municipalities to provide for a fine of $1,500 for each day a maintenance violation concerning the exterior of a vacant and abandoned non-residential property under foreclosure goes uncorrected following a 30-day window to correct, or a 10-day window in the case of an imminent threat to public health and safety.  The bill would also allow municipalities to provide for a fine of $2,500 for each day an out-of-State creditor fails to appoint an in-State representative or agent after the 10-day deadline to notify a municipality that a summons and complaint in an action to foreclose on a non-residential property has been served.  Current law only expressly allows municipalities to provide for such penalties with respect to vacant and abandoned residential properties.