Tax Sale Foreclosure


New Jersey Real Estate Tax Foreclosure AttorneysThe New Jersey real estate tax foreclosure attorneys at LoFaro & Reiser, L.L.P. represent investors in enforcing tax liens in connection with residential, commercial and industrial properties throughout New Jersey. Our tax foreclosure attorneys also represent homeowners in defending tax foreclosure lawsuits.

Tax Lien Certificates are rights to collect taxes and interest from municipal real estate tax assessments. The certificate is not a Deed or a right to the property. In order to actually own the property the Certificate holder must start a special lawsuit to “foreclose” the rights to the property.

In the State of New Jersey, the general rule for tax lien priority is the first filed document has the greater right. Therefore, a previously recorded federal mortgage has priority over subsequent liens recorded against the property with one exception – when a tax lien certificate is filed the tax lien becomes superior to all other liens. However, state tax liens which are recorded before a tax lien certificate are afforded higher priority. Tax certificates also have priority over federal tax liens.

Most states require a lengthy wait from the purchase of the tax lien certificate to the right to foreclose. In New Jersey, the waiting period is two (2) years for private investors. During this 2-year period and during the foreclosure case the investor must pay all the property taxes assessed by the municipality. Thus, tax certificate liens holders must be prepared to tie their money up for an extended period of time.

What is the effect of a tax sale judgment entered in the Superior Court of New Jersey, Chancery Division?

N.J.S.A. 54:5-104.64 answers this question. The entire text of the statute is repeated verbatim as follows:

(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.

Once a judgment is entered in a tax foreclosure lawsuit, can the property owner still redeem the tax lien under state law?
No. Unlike a regular mortgage foreclosure case , in tax foreclosure cases the property owner loses title to the property once a final judgment is entered.

N.J.S.A. 54:5-105 states:

When in a judgment in an action to foreclose the right of redemption, the lands are described in a manner other than that contained in the certificate of tax sale, the judgment shall bar the defendant’s right of redemption in and to all the lands described in the judgment, and that property only. 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.”

If you are a real estate investor, loan officer at a bank or financial institution, contact our New Jersey real estate tax foreclosure attorneys today to discuss your  property tax foreclosure case. One of our experienced New Jersey real estate tax foreclosure attorneys will respond within 24 – 48 hours.

Our New Jersey real estate tax foreclosure attorneys serve Northern, Central and Southern New Jersey. Bergen County, Essex County, Hudson County, Mercer County, Middlesex County, Monmouth County, Morris County, Passaic County, Somerset CountyUnion County, and elsewhere in the Garden State.

Contact Us Today to Discuss Your Legal Matter.

For emergent matters, please call us at (201) 870-4938

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