SENATE, No. 2280

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED MARCH 19, 2020

 


 

Sponsored by:

Senator  TROY SINGLETON

District 7 (Burlington)

 

 

 

 

SYNOPSIS

     Concerns suspension of residential tenant eviction and residential foreclosure processes, rent increase prohibition, and permits application for mortgage forbearance, during certain emergency circumstances.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning foreclosure, mortgage forbearance, and tenant protections during certain emergency circumstances, and supplementing Title 52 of the Revised Statutes.

 

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

 

     1.    a.  Notwithstanding any other law, ordinance, rule or regulation to the contrary, whenever a Public Health Emergency, pursuant to the “Emergency Health Powers Act,” P.L.2005, c.222 (C.26:13-1 et seq.), or a State of Emergency, pursuant to P.L.1942, c.251 (C.App.A.9-33 et seq.), or both, has been declared by the Governor and is in effect, the Governor may issue one or more executive orders to declare all, or any combination, of the following:

     (1)   that a lessee, tenant, homeowner or any other person shall not be removed from a residential property as the result of an eviction or foreclosure proceeding during the time provided in the executive order;

     (2)   that eviction and foreclosure proceedings shall not be initiated or continued during the time provided in the executive order, unless the court determines on its own motion or motion of the parties that a proceeding is necessary in the interest of justice;

     (3)   that emergency-impacted homeowners may apply, pursuant to subsection e. of this section, for a mortgage forbearance; or

     (4)   that rent shall not be increased on any residential property in the State for a period of time specified in the executive order.

     b.    An executive order issued pursuant to subsection a. of this section shall remain in effect for no longer than six months following the end of the Public Health Emergency or State of Emergency.

     c.     Enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed during the time of an executive order issued by the Governor prohibiting certain removals from residential property pursuant to paragraph (1) of subsection a. of this section, unless the court determines on its own motion, or motion of the parties, that enforcement is necessary in the interest of justice. 

     d.    Sheriffs, court officers, and their agents shall refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time period of an executive order issued by the Governor prohibiting certain removals from residential property pursuant to paragraph (1) of subsection a. of this section, unless the court determines on its own motion, or motion of the parties, that removal is necessary in the interest of justice. 

     e.     (1)  An emergency-impacted homeowner may apply to the commissioner, on forms to be provided by the department, for a certification of eligibility for a mortgage forbearance under this section before the first day of the third month next following the date when the commissioner makes the application available.  The commissioner shall approve or deny an application within 30 days of its delivery to the commissioner.  An emergency-impacted homeowner shall be eligible for a mortgage forbearance regardless of whether the homeowner's primary residence is already the subject of a foreclosure proceeding prior to the effective date of an executive order issued pursuant to paragraph (3) of subsection a. of this section. 

     (2)   The forbearance period of an emergency-impacted homeowner shall conclude no later than six months following the commencement of the forbearance period, which period shall commence upon approval by the commissioner of the emergency-impacted homeowner’s application. 

     (3)   Notwithstanding the provisions of any law, rule, or regulation to the contrary, the repayment period of any mortgage subject to the forbearance established pursuant to this section shall be extended by the number of months the forbearance is in effect.  During the time of the forbearance, and during the period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, shall continue without modification, and there shall be no fees assessed for the forbearance, or penalty for early repayment.

     f.     (1)  No later than one month following the effective date of this act, the commissioner shall:

     (a)   notify homeowners of the forbearance program;

     (b)   post information on eligibility and the application process for the forbearance, and make forbearance applications available, on the department's Internet website;

     (c)   notify the courts of the individuals and associated residential properties that are eligible for a forbearance; and

     (d)   to the greatest extent reasonably possible, notify the State's active mortgage lenders of the individuals and associated residential properties that are eligible for a forbearance.

     (2)   Upon knowledge of a homeowner's eligibility for a forbearance, the mortgage lender shall notify the homeowner and the courts.

     (3)   Upon approval of a forbearance application pursuant to subsection e. of this section, the commissioner shall notify the applicant, the mortgage lender, and the courts.

     g.    Emergency-impacted homeowners awarded a forbearance under this section shall be responsible for the maintenance of the property during the period of forbearance.  After service of notice of any proceedings conducted to terminate forbearance, made on the mortgagor at an address determined pursuant to due diligence of the movant mortgagee or creditor to be the actual current residence of the mortgagor, providing opportunity for the mortgagor to respond and contest the proceedings, a stay of foreclosure proceedings or forbearance, or both, awarded under this section shall cease immediately upon a court's determination that the subject residential property has been abandoned by the emergency-impacted homeowner. 

     h.    Nothing in this section shall be construed as limiting the ability of a mortgagee and residential property owner to participate in a mediation sponsored by the Administrative Office of the Courts in accordance with the requirements of the mediation program.  Nothing in this section shall be construed to impact property tax and insurance obligations of a property owner related to any real property in the State.

     i.     A rent increase prohibition, established pursuant to paragraph (4) of subsection a. of this section, shall constitute an issuance of a “Notice of Rent Protection Emergency” pursuant to P.L.2002, c.133 (C.2A:18-61.62 et seq.), and shall permit the invocation of the penalty provision, the ability of a landlord to apply for an exception, and other authorities activated by issuance of a Notice of Rent Protection Emergency, except:

     (1)   notwithstanding subsection e. of section 2 of P.L.2002, c.133 (C.2A:18-61.63), the length of the order shall be constrained pursuant to subsection b. of this section;

     (2)   pursuant to subsection a. of this section, the order may be issued whenever a Public Health Emergency, pursuant to the “Emergency Health Powers Act,” P.L.2005, c.222 (C.26:13-1 et seq.), or a State of Emergency, pursuant to P.L.1942, c.251 (C.App.A.9-33 et seq.), or both, has been declared by the Governor and is in effect; and

     (3)   notwithstanding subsection b. of section 2 of P.L.2002, c.133 (C.2A:18-61.63), in the discretion of the Governor, the order may prohibit any rent increase on a residential property.

     j.     As used in this section:

     “Commissioner” means the Commissioner of Community Affairs.

     “Department” means the Department of Community Affairs.

     “Emergency-impacted homeowner” means a homeowner who is subject to a substantial loss of income, in accordance with rules and regulations adopted by the commissioner, resulting from a Public Health Emergency, declared pursuant to the “Emergency Health Powers Act,” P.L.2005, c.222 (C.26:13-1 et seq.), or a State of Emergency, declared pursuant to P.L.1942, c.251 (C.App.A.9-33 et seq.). 

     “Mortgage forbearance” or “forbearance” means a period of time during which obligations for mortgage and interest payments are suspended.

     “Residential property” means any property rented or owned for residential purposes, including, but not limited to, any house, building, mobile home or land in a mobile home park, or tenement leased for residential purposes, but shall not include any hotel, motel, or other guest house, or part thereof, rented to a transient guest or seasonal tenant, or a residential health care facility.

 

     2.    The Commissioner of Community Affairs shall, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt such rules and regulations as shall be necessary to implement the provisions of this act no later than one month following the effective date of this act. 

 

     3.    This act shall take effect immediately. 

 

 

STATEMENT

 

     This bill allows the Governor, by executive order, to suspend residential tenant eviction and residential foreclosure processes, to freeze rent on residential properties Statewide, and to permit applications for mortgage forbearances, during certain emergency circumstances.

     This bill would provide that, whenever a public health emergency or a state of emergency is declared by the Governor and is in effect, the Governor may issue an executive order to declare that a lessee, tenant, homeowner or any other person would not be removed from a residential property as the result of an eviction or foreclosure proceeding.  This executive order would remain in effect for no longer than six months following the end of the public health emergency or state of emergency.

     During the time of this executive order, enforcement of all judgments for possession, warrants of removal, and writs of possession would be stayed, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice.  The bill would require sheriffs, court officers, and their agents to refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time of the executive order, unless the court determines on its own motion or motion of the parties that removal is necessary in the interest of justice.

     Additionally, this bill provides that the executive order issued during the public health emergency or a state of emergency may provide that rent shall not be increased on any residential property in the State for a period of time specified in the executive order.

     The bill also provides that the executive order issued during the public health emergency or a state of emergency may provide either or both of the following:

·        that eviction and foreclosure proceedings would not be initiated or continued during the time provided in the executive order, unless the court determines on its own motion or motion of the parties that a proceeding is necessary in the interest of justice; or

·        that emergency-impacted homeowners, who have sustained a substantial loss of income in accordance with rules adopted by the Department of Community Affairs (“DCA”), may apply for a mortgage forbearance, meaning a period of time during which obligations for mortgage and interest payments are suspended.

     Under this bill, an emergency-impacted homeowner would be eligible for a forbearance regardless of whether the homeowner's primary residence is already the subject of a foreclosure proceeding.  The homeowner would apply to the Commissioner of Community Affairs for a certification of eligibility for the forbearance before the first day of the third month next following the date when the commissioner makes the application available.  The commissioner would approve or deny an application within 30 days. 

     The forbearance period of an emergency-impacted homeowner would conclude no later than six months following the commencement of the forbearance period, which period would commence upon application approval. 

     The repayment period of any mortgage subject to a forbearance would be extended by the number of months the forbearance is in effect.  During the time of the forbearance and during the period constituting an extension of the mortgage, all terms and conditions of the original mortgage, except with regard to default and delinquency during forbearance, would continue without modification, and there would be no fees assessed for the forbearance, or penalty for early repayment.

     Prior to one month following the effective date of this bill, the bill directs the commissioner to:

·        notify homeowners of the forbearance program;

·        post information on eligibility and the application process for the forbearance, and make forbearance applications available, on DCA's website;

·        notify the courts of the individuals and associated residential properties that are eligible for a forbearance; and

·        to the greatest extent reasonably possible, notify the State's active mortgage lenders of the individuals and associated residential properties that are eligible for a forbearance.

     Under the bill, upon knowledge of a homeowner's eligibility for a forbearance, the mortgage lender would notify the homeowner and the courts.  Upon approval of a forbearance application, the commissioner would notify the applicant, the mortgage lender, and the courts.

     Emergency-impacted homeowners awarded a forbearance under this bill would be responsible for the maintenance of the property during the period of forbearance.  After service of notice of any proceedings conducted to terminate forbearance, made on the homeowner at an address determined pursuant to due diligence of the creditor to be the actual current residence of the homeowner, providing opportunity for the homeowner to respond and contest the proceedings, a stay of foreclosure proceedings or forbearance, or both, awarded under the bill would cease immediately upon a court's determination that the subject residential property has been abandoned by the emergency-impacted homeowner. 

     Nothing in this bill would limit the ability of the parties to participate in a mediation sponsored by the Administrative Office of the Courts in accordance with the requirements of the mediation program.  Nothing in this bill would be construed to impact property tax and insurance obligations of a property owner related to any real property in the State.