A-3772/S-2334 (P.L.2024, c.39) revises the “Tax Sale Law” and the “In Rem Tax Foreclosure Act” to bring those laws in compliance with the 2023 United States Supreme Court decision in Tyler v. Hennepin County, which led to concerns that New Jersey’s system concerning the sale and ultimate foreclosure of tax liens could violate the U.S. Constitution.
The new law allows property owners or their heirs to reclaim excess equity by requesting their property be sold at a judicial sale or an online action. A request for such a sale must be done prior to the court entering final judgment. Owners of abandoned property are not eligible to seek surplus equity.
Municipalities rely on the revenue from tax sales to fill the revenue gap created when property owners fail to pay their property taxes. Without the ability to fill this gap, municipalities are put in a position where other measures need to be taken to ensure a balanced budget. This could include increasing property taxes or cutting critical services. Maintaining the viability of a tax sale certificate market is paramount.
The League, along with the Tax Collectors and Treasurers Association, supports S-2334/A-3772 as we believe it represents a fair and balanced approach to resolving the issues created by Tyler and provides protection for property owners, all while ensuring the viability of the tax sale certificate market.
The new law took effect on July 10, 2024.
Contact: Frank Marshall, Esq., Associate General Counsel, fmarshall@njlm.org, 609-695-3481, x137.