S3703

An Act concerning the electronic sale of real properties at foreclosure and amending N.J.S.2A:61-1 and N.J.S.2A:61-4, and supplementing Title 2A of the New Jersey Statutes.

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

1. (New section) This act shall be known and may be cited as the “New Jersey Online Foreclosure Sale Act.”

2. N.J.S.2A:61-1 is amended to read as follows:

2A:61-1. a. When any sheriff, coroner, master, executor, administrator, guardian, commissioner, auditor or other officer or person is authorized or required by any public statute or the direction of any court of competent jurisdiction in this State to make sales of real estate, he shall, unless otherwise specially directed or authorized by law, before making the sale, give notice of the time and place of the sale by public advertisement, signed by himself, and set up in the office of the sheriff of the county or counties where the real estate is located and at the premises to be sold, at least 3 weeks before the time appointed for the sale. The notice need not be set up at any other place. The notice of sale shall include either a diagram of the premises or a concise statement indicating the municipality, the tax lot and block and where appropriate, the street and street number, and the dimensions of the premises, as well as the number of feet to the nearest cross street. The notice of sale shall state that the diagram or concise description does not constitute a full legal description of the premises, and shall state where the full legal description can be found.

Such officer or person shall also cause the notice to be published 4 times, at least once a week, during 4 consecutive weeks, in two newspapers as set forth in paragraphs (a) through (d) of this subsection, or online and in one newspaper as set forth in paragraph (e) of this subsection, to be by him designated[,]as follows:

(a) both printed and published in the county where the real estate to be sold is located, one of which shall be either a newspaper published at the county seat of the county or a newspaper published in the municipality in the county having the largest population according to the latest census[, or];

(b) one printed and published in the county and one circulating in the county, if only one daily newspaper is printed and published in the county[, or];

(c) one published at the county seat and one circulating in the county, if no daily newspaper is published in the county[, or];

(d) both circulating in the county, if no newspapers are printed and published in the county; or

(e) if the sale of property is to be conducted in an online, electronic format, online at the public website at which the sale will be conducted electronically and one newspaper, which, as applicable shall be:

(1) a newspaper printed and published in the county where the real estate to be sold is located, either published at the county seat of the county or in the municipality in the county having the largest population according to the latest census;

(2) one printed and published in the county, if no newspaper is published at the county seat of the county or in the municipality in the county having the largest population according to the latest census; or

(3) one circulating in the county, if no daily newspaper is published in the county.

The first publication shall be at least 21 days prior and the last publication not more than 8 days prior to the time appointed for the sale of the real estate.

Whenever, in the opinion of any such officer or person, the ends of justice shall require it, or the sale being conducted by him will be benefited thereby, the notice of sale may be published in three newspapers instead of two as required by the second paragraph of this section, if there be that number printed and published in the county where the real estate to be sold is located.

The officer or person so advertising in the newspapers shall be entitled therefor, in addition to his other fees, to the sum of $1.50, except where it is otherwise specifically provided.

b. If the sale of real estate is conducted electronically pursuant to section 4 of P.L. , c. (C. )(pending before the Legislature as this bill), then in addition to the requirements in subsection a. of this section, the notice shall state that the sale is being held by means of an online auction, and the notice shall include a link to the auction website, and if possible, the link to the auction of the specific property in the notice.

If the sale of real estate is conducted electronically pursuant to section 4 of P.L. , c. (C. )(pending before the Legislature as this bill), then the publication requirement set forth in subsection a. of this section may be satisfied by publishing a notice in the format of a display advertisement rather than a legal advertisement. The display advertisement shall be at least two inches by three inches with a bold black border. The notice contained in the display advertisement shall set forth the following information:

(a) The tax lot and block of the real property to be sold and where appropriate, the street, street number and municipality;

(b) A statement that the sale shall be conducted through an online auction;

(d) A statement that the sale information may be viewed without registration or cost; and

(e) The date and time of the sale.

(cf: P.L.1979, c.364, s.1)

3. N.J.S.2A:61-4 is amended to read as follows:

2A:61-4. a. Any officer or person [mentioned] who is authorized or required in [section] N.J.S. 2A:61-1 of this title, making a sale of real estate governed by this chapter, shall, at the time and place appointed therefor, between the hours of 12 and 5 in the afternoon, if requested by any person interested in the sale of the real estate to be sold, read the description of the real estate to be sold by metes and bounds, or, in the absence of such a request, the officer or person making the sale shall announce the street and number, or streets and numbers, of the real estate to be sold, or the block and lot number or numbers by which such real estate is designated on the taxing maps of the municipality or municipalities in which the same is situate, if the same is not identified by a street and number or streets and numbers on such taxing maps, and where there is no street number or lot and block number, the officer or person making the sale may announce such description or designation as to him may be deemed sufficient, and sell such real estate at public vendue to the highest bidder.

b. As an alternative to the procedures in subsection a. of this section, any officer or person who is authorized or required in N.J.S. 2A:61-1 of this title, making a sale of real estate governed by this chapter, may conduct the sale by means of electronic auction conducted online and advertised in conformance with the provisions of N.J.S.2A:61-1.

(cf: N.J.S.2A:61-4)

4. (New Section) Any sheriff or other officer or person wishing to conduct an online foreclosure sale of real estate may do so, in accordance with the following provisions and requirements:

a. Any contract with a vendor to conduct an online foreclosure sale of real estate shall require that New Jersey law shall govern the contract and the relationship between vendor and the officer.

b. The officer may conduct the public auction of the real estate online, at a physical location in the county as permitted by law, or both.

c. If the auction occurs only online, the auction shall be open for bidding at the time set forth by the notice and be held open for a minimum of two hours.

d. Notwithstanding any other provision of law to the contrary, an electronic real property foreclosure service may be procured through competitive contracting pursuant to P.L.1999, c.440 (C.40A:11-4.1 et seq.), without the need for a resolution by the governing body.

e. If the auction occurs online, any vendor providing online sale services shall maintain satisfactory internal controls and shall meet the performance requirements of a Service Organization Control (SOC) 2 engagement based upon the existing Trust Services Principles (WebTrustTM and SysTrustTM) carried out in accordance with AT 101 standards, with the ability to test and report on the design effectiveness (Type I) and operating effectiveness (Type II) of the vendor’s controls. Upon the request of the officer, a vendor shall provide evidence of satisfactory internal controls set forth in this section.

f. All bid information and participant financial data is deemed property of the officer.

g. Any officer, employee, or independent contractor of the vendor shall be prohibited from participating in the auction.

h. All bids entered during the auction shall be visible to the public online and displayed at the time they are placed. Any maximum bid amounts provided by bidders ahead of the sale shall not be visible to the public or to the sheriff while the auction is in process until the bid is placed.

Notwithstanding any other provision of law to the contrary, the cost of an electronic real property foreclosure service shall be deemed a reasonable and necessary taxable expense under N.J.S. 22A:2-8. The website shall not charge a fee for members of the public to view properties for sale, and no fee may be charged to a buyer at the sale of real estate over and above the winning bid amount, including but not limited to, a buyer’s premium to cover the cost of the electronic real property foreclosure service.

5. This act shall take effect immediately.

STATEMENT

This bill permits the sale of foreclosed upon property in an electronic, online forum that is open to the public. If the sale is conducted in an online format, then the person conducting the sale has the option of advertising the sale online and in one newspaper rather than the publishing notice required by current law for sheriff sales.

If the sale of real estate is conducted electronically, the bill provides that the notice of the sale is required to state that the sale is being held by means of an online auction, and the notice is required to include a link to the auction website, and if possible, the link to the auction of the specific property in the notice.

Additionally, if the sale of real estate is conducted electronically, then the publication requirement may be satisfied by publishing a notice in the format of a display advertisement rather than a legal advertisement. The display advertisement is required to be at least two inches by three inches with a bold black border. The notice contained in the display advertisement is required to set forth the following information:

(a) The tax lot and block of the real property to be sold and where appropriate, the street, street number and municipality;

(b) A statement that the sale shall be conducted through an online auction;

(d) A statement that the sale information may be viewed without registration or cost; and

(e) The date and time of the sale.