Senator TROY SINGLETON
District 7 (Burlington)
Senator STEVEN V. OROHO
District 24 (Morris, Sussex and Warren)
Senator DAWN MARIE ADDIEGO
District 8 (Atlantic, Burlington and Camden)
Makes certain changes to summary action foreclosure process under “Fair Foreclosure Act.”
CURRENT VERSION OF TEXT
An Act concerning certain foreclosure procedures and amending P.L.2012, c.70.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2012, c.70 (C.2A:50-73) is amended to read as follows:
1. a. For the purposes of this section, "vacant and abandoned" residential property means residential real estate with respect to which the mortgagee proves, by clear and convincing evidence, that the mortgaged real estate is vacant and has been abandoned or where a notice of violation has been issued pursuant to subsection b. of section 1 of P.L.2014, c.35 (C.40:48-2.12s). Where a notice of violation has not been issued pursuant to subsection b. of section 1 of P.L.2014, c.35 (C.40:48-2.12s), real property shall be deemed "vacant and abandoned" if the court finds that the mortgaged property is not occupied by a mortgagor or tenant as evidenced by a lease agreement entered into prior to the service of a notice of intention to commence foreclosure according to section 4 of the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-56), and at least two of the following conditions exist:
(1) overgrown or neglected vegetation;
(2) the accumulation of newspapers, circulars, flyers or mail on the property;
(3) disconnected gas, electric, or water utility services to the property;
(4) the accumulation of hazardous, noxious, or unhealthy substances or materials on the property;
(5) the accumulation of junk, litter, trash or debris on the property;
(6) the absence of window treatments such as blinds, curtains or shutters;
(7) the absence of furnishings and personal items;
(8) statements of neighbors, delivery persons, representatives of a common interest community association, or government employees indicating that the residence is vacant and abandoned;
(9) windows or entrances to the property that are boarded up or closed off or multiple window panes that are damaged, broken and unrepaired;
(10) doors to the property that are smashed through, broken off, unhinged, or continuously unlocked;
(11) a risk to the health, safety or welfare of the public, or any adjoining or adjacent property owners, exists due to acts of vandalism, loitering, criminal conduct, or the physical destruction or deterioration of the property;
(12) an uncorrected violation of a municipal building, housing, or similar code during the preceding year, or an order by municipal authorities declaring the property to be unfit for occupancy and to remain vacant and unoccupied;
(13) the mortgagee or other authorized party has secured or winterized the property due to the property being deemed vacant and unprotected or in danger of freezing;
(14) a written statement issued by any mortgagor expressing the clear intent of all mortgagors to abandon the property;
(15) any other reasonable indicia of abandonment.
b. For the purposes of this section, a residential property shall not be considered "vacant and abandoned" if, on the property:
(1) there is an unoccupied building which is undergoing construction, renovation, or rehabilitation that is proceeding diligently to completion, and the building is in compliance with all applicable ordinances, codes, regulations, and statutes;
(2) there is a building occupied on a seasonal basis, but otherwise secure; or
(3) there is a building that is secure, but is the subject of a probate action, action to quiet title, or other ownership dispute.
c. In addition to the residential mortgage foreclosure procedures set out in the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et seq.), a summary action to foreclose a mortgage debt secured by residential property that is vacant and abandoned [may] shall be brought by a lender in the Superior Court. In addition, a lender [may, at any time after filing a foreclosure action,] shall file with the court, in accordance with the Rules Governing the Courts of the State of New Jersey, an application to proceed in a summary manner because the residential property that is the subject of the foreclosure action is believed to be "vacant and abandoned"; provided, however, that this section shall not apply to a foreclosure of a timeshare interest secured by a mortgage.
d. (1) In addition to the service of process required by the Rules of Court, a lender shall establish, for the entry of a residential foreclosure judgment under this section, that a process server has made two unsuccessful attempts to serve the mortgagor or occupant at the residential property, which attempts must be at least 72 hours apart, and during different times of the day, either before noon, between noon and 6 P.M., or between 6 P.M. and 10 P.M.
(2) In addition to any notices required to be served by law or the Rules of Court, a lender shall, with any order to show cause served as original service of process or a motion to proceed summarily, serve a notice that the lender is seeking, on the return date of the order to show cause, or on the date fixed by the court, to proceed summarily for entry of a residential foreclosure judgment because the property is vacant and abandoned.
(3) When a property is deemed vacant and abandoned as herein defined, a lender shall not be required to serve the debtor with the notice to cure required by section 6 of the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-58).
e. (1) The court may enter a final residential mortgage foreclosure judgment under this section upon a finding, (a) by clear and convincing evidence, that the residential property is vacant and abandoned as defined under subsection a. of this section, and (b) that a review of the pleadings and documents filed with the court, as required by the Rules of Court, supports the entry of a final residential mortgage foreclosure judgment.
(2) A final residential mortgage foreclosure judgment under this section shall not be entered if the court finds that:
(a) the property is not vacant or abandoned; or
(b) the mortgagor or any other defendant has filed an answer, appearance, or other written objection that is not withdrawn and the defenses or objection asserted provide cause to preclude the entry of a final residential mortgage foreclosure judgment.
f. If a final residential mortgage foreclosure judgment under this section is not entered on the original or adjourned return date of an order to show cause or the date fixed by the court to proceed summarily, the court may direct that the foreclosure action continue on the normal track for residential mortgage foreclosure actions for properties that are not vacant and abandoned and the notice to cure served with the order to show cause or the order fixing that date for the matter to proceed summarily shall be of no effect.
g. All actions brought to foreclose on real property pursuant to this section shall proceed in accordance with the Rules of Court.
h. Nothing in this section is intended to supersede or limit other procedures adopted by the Court to resolve residential mortgage foreclosure actions, including, but not limited to, foreclosure mediation.
i. Nothing in this section shall be construed to affect the rights of a tenant to possession of a leasehold interest under the Anti-Eviction Act, P.L.1974, c.49 (C.2A:18-61.1 et seq.), the "New Jersey Foreclosure Fairness Act," P.L.2009, c.296 (C.2A:50-69 et seq.), or any other applicable law.
j. Notwithstanding paragraph (3) of subsection a. of section 12 of P.L.1995, c.244 (C.2A:50-64) to the contrary, if the court makes a finding in the foreclosure judgment that the property is vacant and abandoned, the sheriff shall sell the property within 60 days of the sheriff's receipt of any writ of execution issued by the court. If it becomes apparent that the sheriff cannot comply with the provisions of this subsection, the foreclosing plaintiff [may] shall apply to the court for an order appointing a Special Master or judicial agent to hold the foreclosure sale , within 60 days of the date of application.
(cf: P.L.2014, c.35, s.3)
2. This act shall take effect immediately.
This bill amends the summary action foreclosure process under the “Fair Foreclosure Act,” to: (1) expand the definition of “vacant and abandoned”; (2) require lenders to bring a summary action to foreclose a mortgage debt secured by residential property that is vacant and abandoned; and (3) ensure that foreclosure sales of vacant and abandoned properties are conducted within 60 days of a foreclosure judgment.
The current definition of “vacant and abandoned” provides that statements of neighbors, delivery persons, or government employees may be used to indicate that a residence is vacant and abandoned. The bill amends the definition to include statements of representatives of a common interest community association.
The bill also provides that a lender would be required to file a summary action to foreclose a mortgage debt secured by residential property that is vacant and abandoned, if the lender has initiated the foreclosure process. Under current law, lenders may file such actions, but are not required to do so.
Finally, current law provides that if the court makes a finding in a foreclosure judgment that the property is vacant and abandoned, the sheriff is required to sell the property within 60 days of the sheriff's receipt of any writ of execution issued by the court. The law further provides that if it becomes apparent the sheriff cannot comply with that provision, the foreclosing plaintiff may apply to the court for an order appointing a Special Master or judicial agent to hold the foreclosure sale.
Under the bill, when a sheriff cannot conduct a sale within 60 days, the foreclosing plaintiff would be required to apply to the court for an order appointing a Special Master or judicial agent to hold the foreclosure sale. The bill provides that the foreclosure sale would be held within 60 days of the date of application to the court.