New Jersey S2545/A3793: Concerns Expedited Process for Foreclosing Vacant and Abandoned Residential Properties in Uncontested Actions
On June 8, NJ S2545/A3793 had a second reading and is under consideration in the State House. If enacted, the bill would amend P.L.2012, c.70 (Senate Bill 2156).
New Jersey Senate Bill 2545, originally introduced October 27, 2014, and subsequently substituted by Senate Committee on June 8, 2015, proposes an expedited process for foreclosing vacant and abandoned residential properties in uncontested actions.
It amends P.L.2012, c.70 (Senate Bill 2156). P.L.2012, c.70 authorizes lenders to bring summary actions to foreclose mortgages on vacant and abandoned residential properties, and grants state courts the authority to enter a final residential mortgage foreclosure judgment if it finds, by clear and convincing evidence, that the residential property is “vacant and abandoned,” proper summary judgment procedures are followed, and no answer, written objection, or appearance asserting a defense or proper cause would preclude a judgment. See “Summary NJ SB 2156” for further explanation of P.L.2012, c.70 (Senate Bill 2156).
New Jersey Senate Bill 2545 modifies New Jersey law (P.L.2012, c.70) as follows:
- It adds another condition that may be used to help indicate that the mortgaged real estate is “vacant and abandoned”: certification from the board of a planned real estate development in which the residential property is located, as defined under section 1 of P.L.1990, c.55 (C.2A:42-103), stating with specificity that the property has been observed to be abandoned.
- It requires that the residential mortgage lender’s action to foreclose be uncontested. As defined pursuant to R.4:64-1(c) of the Rules Governing the Courts of the State of New Jersey, an action is uncontested if, as to all defendants:
- a default has been entered as the result of failure to plead or otherwise defend; or
- none of the pleadings responsive to the complaint either contest the validity or priority of the mortgage or lien being foreclosed or create an issue with respect to plaintiff’s right to foreclose it; or
- all the contesting pleadings have been stricken or otherwise rendered noncontesting.
- It requires that the mortgagor, or any other defendant, include an affidavit when filing an answer, written objection, or appearance asserting a defense or proper cause to preclude a judgment stating that the defense is not made solely for the purpose of delaying the relief requested pursuant to the summary action. Also, the defense or objection must be presented within 30 days of the filing of the service of the application to proceed summarily.
- It requires that the lender pay a $1,000 fee for the expedited process.
- It adds two entirely new sections:
- The first section allows the board of the planned real estate development to take action when a lender is entitled to pursue a summary action but fails to do so and the mortgage lien of the lender is superior to the lien of a planned real estate development. The board may file a motion to compel expedited judgment and sale, or in the alternative, payment of association fees outstanding, along with ongoing fees, until occupied by a new resident. If filed and served correctly, then the Superior Court shall (1) compel the lender to either file within 30 days or pay association expenses; or (2) approve an application for an Order Appointing a Fiscal Agent.
- The second section allows the board to apply to the Superior Court of New Jersey for an Order Appointing a Fiscal Agent over an abandoned or unoccupied unit. The fiscal agent shall be authorized to: (1) manage the unit; (2) license the use of the unit; (3) keep the unit insured against loss, damage by fire, or public liability; (4) repair and otherwise do anything necessary for the care and management of the unit; (5) demand, collect and receive from any licensee of the unit or any portion of the unit, or any person liable for the unit, any payment due from any licensee of the unit; (6) institute all legal proceedings necessary for the protection of the unit, or to recover possession of the unit or any part of the unit, and to institute actions for the collection of payments due, and to institute summary proceedings for the removal of any licensee; and (7) retain legal counsel to render legal advice and to provide legal services as may be necessary in the performance of its duties. Neither the title owner of a unit, nor its agent, employee, heir or devisee shall be entitled to receive or collect any payment due pursuant to any license agreement issued by the fiscal agent.
Please click here to view the full text of NJ S2545/A3793 online.
Please click here to view a summary of NJ SB 2156 [pdf].
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.