SENATE, No. 1901

STATE OF NEW JERSEY

INTRODUCED MARCH 10, 1997

By Senator CAFIERO

An Act concerning the holding of sheriff's sales following the foreclosure of tax liens and amending R.S.54:5-87 and P.L.1948, c.96.

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

    1. R.S.54:5-87 is amended to read as follows:

    54:5-87. The Superior Court, in an action to foreclose the right of redemption, may give full and complete relief under this chapter, in accordance with other statutory authority of the court, to bar the right of redemption and to foreclose all prior or subsequent alienations and descents of the lands and encumbrances thereon, except subsequent municipal liens, and to adjudge an absolute and indefeasible estate of inheritance in fee simple, to be vested in the purchaser. The judgment shall be final upon the defendants, their heirs, devisees and personal representatives, and their or any of their heirs, devisees, executors, administrators, grantees, assigns or successors in right, title or interest and no application shall be entertained to reopen the judgment after three months from the date thereof, and then only upon the grounds of lack of jurisdiction or fraud in the conduct of the suit. Such judgment and recording thereof shall not be deemed 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 the event that any federal statute or regulation requires a judicial sale of the property in order to debar and foreclose a mortgage interest or any other lien held by the United States or any agency or instrumentality thereof, then the tax lien may be foreclosed in the same manner as a mortgage, and the final judgment shall provide for the issuance of a writ of execution to the sheriff of the county wherein the property is situated and the holding of a judicial sale as in the manner of the foreclosure of a mortgage.

    In the event that the owner of a property subject to a foreclosure action files a notice of intent to recover equity in the property in accordance with rules promulgated by the Supreme Court of New Jersey, then the tax lien shall be foreclosed in the same manner as a mortgage, and the final judgment shall provide for the issuance of a writ of execution to the sheriff of the county wherein the property is situated and the holding of a judicial sale as in the manner of the foreclosure of a mortgage.

(cf: P.L.1995, c.326, s.1)

    2. Section 36 of P.L.1948, c.96 (C.54:5-104.64) is amended to read as follows:

    36. (a) The judgment shall give full and complete relief, in accordance with the provisions of this act, and in accordance with any other statutory authority, to bar the right of redemption, and to foreclose all prior or subsequent alienations and descents of the lands and encumbrances thereon, and to adjudge an absolute and indefeasible estate of inheritance in fee simple in the lands therein described, to be vested in the plaintiff.

    (b) Such judgment shall be binding and final upon all persons having a vested or contingent title or interest in or lien or claim upon or against said lands, including the State of New Jersey, and any agency and political subdivision thereof, and their heirs, devisees and personal representatives, and their, or any of their heirs, devisees, executors, administrators, grantees, assigns or successors in right, title or interest, notwithstanding any infancy or incompetency of such person or persons, and upon all other persons, their heirs, devisees and personal representatives and their or any of their heirs, devisees, executors, administrators, grantees, assigns or successors in right, title or interest.

    (c) In the event that any federal statute or regulation requires a judicial sale of the property in order to debar and foreclose a mortgage interest or any other lien held by the United States or any agency or instrumentality thereof, then the tax lien may be foreclosed in the same manner as a mortgage, and the final judgment shall provide for the issuance of a writ of execution to the sheriff of the county wherein the property is situated and the holding of a judicial sale as in the manner of the foreclosure of a mortgage.

    (d) In the event that the owner of a property subject to a foreclosure action files a notice of intent to recover equity in the property in accordance with rules promulgated by the Supreme Court of New Jersey, then the tax lien shall be foreclosed in the same manner as a mortgage, and the final judgment shall provide for the issuance of a writ of execution to the sheriff of the county wherein the property is situated and the holding of a judicial sale as in the manner of the foreclosure of a mortgage.

(cf: P.L.1995, c.326, s.3)

    3. This act shall take effect immediately.

STATEMENT

    This bill would provide the owner of a property subject to a tax lien with the opportunity to require a sheriff's sale following issuance of a judgment of foreclosure of the lien. Under current law, unless required by federal statute, there is no sheriff's sale following a tax lien foreclosure proceeding and the property owner loses all equity in the property. This bill attempts to balance the interests of tax lien purchasers with those of property owners by requiring a property owner to affirmatively request a sheriff's sale in accordance with rules that would be promulgated by the New Jersey Supreme Court.

Permits property owner to request sheriff's sale following foreclosure of tax lien.