[First Reprint]

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, No. 1127

STATE OF NEW JERSEY

ADOPTED SEPTEMBER 19, 1996

Sponsored by Senator ZANE

An Act concerning the foreclosure of tax liens and amending R.S.54:5-86 and P.L.1948, c.96.

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

      1. R.S.54:5-86 is amended to read as follows:

      54:5-86. When the municipality is the purchaser of a tax sale certificate, the municipality, or its assignee or transferee, may, at any time after the expiration of the term of six months from the date of sale, institute an action to foreclose the right of redemption. Except as provided in subsection a. of section 39 of P.L.1996, c.62 (C.55:19-58), for all other persons that do not acquire a tax sale certificate from a municipality, an action to foreclose the right of redemption may be instituted at any time after the expiration of the term of two years from the date of sale of the tax sale certificate. On instituting the action the right to redeem shall exist and continue until barred by the judgment of the Superior Court. In an action to foreclose the right of redemption, only those persons having a right of redemption as set forth in R.S.54:5-54 need be joined as party defendants ¹except that if a public entity is a judgment creditor, the certificate holder shall be required to join the public entity as a party defendant.

      As used in this section "public entity" includes the State, and any county, municipality, district, public authority, public agency, and any other political subdivision or public body in the State. "Public entity" also includes any agency of the federal government¹.

(cf: P.L.1996, c.62, s.41)

      2. Section 4 of P.L.1948, c.96 (C.54:5-104.32) is amended to read as follows:

      4. Any municipality may proceed, In Rem, pursuant to the provisions of this act, similarly to bar rights of redemption, after said certificate has been recorded in the office of the county recording officer. Neither the foreclosure nor the recording of any such judgment or certificate shall be construed to be a sale, transfer or conveyance of title or interest to the subject property under the provisions of the "Uniform Fraudulent Transfer Act," R.S.25:2-20 et seq. In a foreclosure action, the municipality need join as party defendants only those persons having a right of redemption as set forth in R.S.54:5-54 ¹except that if a public entity is a judgment creditor, the certificate holder shall be required to join the public entity as a party defendant. 

     As used in this section "public entity" includes the State, and any county, municipality, district, public authority, public agency, and any other political subdivision or public body in the State. "Public entity" also includes any agency of the federal government ¹.

(cf: P.L.1994, c.32, s.15)

      3. This act shall take effect immediately.

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Requires joining as party defendants in tax lien foreclosure actions only persons with statutory right to redeem property.