This is an update to our blog entitled New Law on Tax Lien Foreclosures Helps Homeowners Protect Equity in which we reported on a major revision to the New Jersey law on tax lien foreclosures. The law now allows homeowners facing foreclosure for unpaid municipal taxes and other charges to request that their property be sold at Sheriff Sale or at an online auction to protect the equity in their property. Previously, the entry of a foreclosure judgment automatically transferred the property to the lienholder and there was no opportunity for the homeowner to get any of the equity.
The new law was enacted in response to the United States Supreme Court 2023 case in Tyler v. Hennepin County, which held as unconstitutional tax lien foreclosures by municipalities when there is no sheriff sale. It was also enacted in response to a 2023 case by the New Jersey Appellate Division, 257-261 20th Avenue Realty, LLC v. Roberto, which applied the Tyler decision to the New Jersey tax lien foreclosure process.
On January 9, 2025, the New Jersey Supreme Court entered a decision in an appeal of the 257-261 20th Avenue Realty, LLC v. Roberto case. In its decision the New Jersey Supreme Court also ruled that the New Jersey tax lien process that previously existed was unconstitutional. According to the Court, “Lienholders are entitled to recover debts they are owed — the value of tax sales certificates they purchased at public auction along with interest and related costs. But they are not entitled to surplus equity in property that exceeds that amount.”
While a challenge to the new procedure is still possible in a future case, for now homeowners facing municipal lien foreclosures are entitled to request a Sheriff Sale and seek to obtain any surplus from the sale proceeds after the lien is satisfied.
Contact Bruce Levitt If You Are Facing a Tax Lien Foreclosure
The lawyers at Levitt & Slafkes, P.C. have been helping homeowners fight mortgage and tax lien foreclosures for more than 30 years. If you are facing a tax lien foreclosure contact us by telephone at 973-323-2953 or contact us online.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information in this blog is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.