The bill is signed into law by Governor Phil Murphy, as captured in a photo by Rich Hundley III from the NJ Governor’s Office.
Assembly members Barbara McCann Stamato, William B. Sampson, and Yvonne Lopez sponsored Bill A3772, which New Jersey Governor Phil Murphy has signed into law. This law, which is effective immediately, has been created to safeguard the interests of property owners whose properties face foreclosure due to a tax lien.
In 2023, the United States Supreme Court decided in Tyler v Hennepin County, Minnesota, et al, which New Jersey’s tax laws now comply with. The decision stated that Hennepin County was not permitted to keep any equity in a property beyond the amount owed for overdue property taxes and interest.
A3772 allows property owners who are facing a tax lien foreclosure (or their heirs) to request a public sale. If the property is sold for an amount greater than the unpaid taxes, the homeowners are entitled to the remaining equity as surplus.
If a lienholder files a foreclosure complaint, they must notify property owners that they have the right to request a judicial sale or internet auction. However, abandoned properties do not require a judicial sale or internet auction. Moreover, the New Jersey Superior Court has the authority to prohibit claims to surplus equity during foreclosure auctions.
Stamato expressed immense pride in the fact that Governor Murphy has signed her first bill, A3772, into law. The said legislation brings the outdated tax sale law, which dates back to 1918, up to pace with modern times. The bill offers protection to property owners in distress by enabling a sheriff sale to take place until a final judgment, except in cases of abandoned properties. Additionally, it ensures that municipalities can foreclose on defaulting properties in accordance with the Tyler ruling by the Supreme Court.
According to Lopez, the approval of A3772 is a victory for both property owners and municipalities. He believes that property owners will now be entitled to the protections granted to them under the Tyler decision.
According to Lopez, the new system of tax lien sales will provide a sense of stability to our municipalities, who depend on them to balance their yearly budgets.
