New Jersey Appeals Division Allows Intervention in Tax Sales Seizure – Real Estate & Construction


United States: New Jersey Appeals Division Allows Intervention in Tax Sales Seizure

To print this article, all you need to do is be registered or log in to Mondaq.com.

The New Jersey Appellate Division recently reversed a lower court’s finding, which dismissed the appellants’ attempt to intervene in a foreclosure case, sending the case back for entry of an order authorizing the intervention. To see Fig Cap Inv. NJ13, LLC v 405 Bigelow Ln., No. A-2461-20 (App. Div. Mar. 22, 2022). In the case, the plaintiff purchased the tax sale certificate for a property in Vernon, New Jersey in 2017. In June 2019, the plaintiff filed for foreclosure of the owner’s right of redemption and obtaining title of ownership, and has received a declaration that the ownership has been abandoned. On September 16, 2019, the appellants entered into a contract with the defendant, the owner, to purchase the property for $25,000. A week later, the plaintiff served the defendant with the notice of foreclosure and the order determining ownership was dropped. On October 30, 2019, the appellants and the defendant completed the sale of the property. Later that day, the plaintiff advised the appellants that the plaintiff would not agree to waive the requirement to file a motion to intervene in the foreclosure prior to redemption, as required by the Simon v. Cronecker, 189 NJ 304 (2007). The appellants filed to intervene in the foreclosure action on November 14, 2019, seeking a court order to compel the plaintiff to agree to the redemption of the tax lien. The plaintiff opposed the motion, stating that the appellants did not follow the procedure established under Cronecker and NJSA 54:5-89.1 because the appellants did not seek the court’s permission before redeeming the tax lien. The trial court dismissed the appellants’ motion, finding that the appellants had not followed the Cronecker proceedings because they had not intervened in the foreclosure case before the redemption of the certificate of sale for tax. Accordingly, the trial court dismissed the appellants’ request to intervene. The appellants appealed.

The Court of Appeal overturned. He noted that in Cronecker, the plaintiff had decided to stay the repurchase one month after the expiration of the court-ordered repurchase date, and subsequently an investor decided to intervene in the foreclosure action. the Cronecker The court held that before redeeming the tax certificate, the third-party investor must intervene in the foreclosure action and demonstrate that more than nominal consideration had been offered for the ownership interest. The Court of Appeal singled out the present case, noting that no redemption expiration date had been ordered and that no authority had supported plaintiff’s argument that a notice of foreclosure sets a deemed date redemption. Instead, the court noted that NJSA 54:5-54 allows any interested person to redeem the certificate of sale for taxes at any time prior to the redemption deadline set by the court, and pointed to the similar factual scenario. in Green Knight Cap., LLC vs. Calderon, 469 NJ Super. 390 (App. Div. 2021), in which the Appellate Division found that “where an investor has an interest in the foreclosed property, is prepared to redeem the tax sale certificate, and files a motion to intervene in the in the foreclosure action before the entry of an order setting the deadline for reimbursement, the investor is authorized to intervene and redeem the tax certificate. Since the file did not reflect a court order setting a deadline redemption, the Appeal Division concluded that the appellants decided to intervene before the redemption deadline.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: U.S. Real Estate and Construction

Troubled Investments

Ice Miller srl

Ice Miller’s Distressed Investment Group advises investment funds, private and institutional investors, lenders, private equity firms, operators and other interested parties in all aspects…

Comments are closed.