Bill Text: NJ S1832 | 2026-2027 | Regular Session | Introduced
Bill Title: The "Vacant Property Revitalization and Affordable Housing Act"; establishes fund to revitalize certain real property and revises process for tax lien holder to foreclose the right of redemption; appropriates $50 million.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-01-13 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S1832 Detail]
Download: New_Jersey-2026-S1832-Introduced.html
STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
The "Vacant Property Revitalization and Affordable Housing Act"; establishes fund to revitalize certain real property and revises process for tax lien holder to foreclose the right of redemption; appropriates $50 million.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act to enable real property revitalization, supplementing P.L.1983, c.530 (C.55:14K-1 et seq.), supplementing and amending chapter 5 of Title 54 of the Revised Statutes, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) This act shall be known and may be cited at the "Vacant Property Revitalization and Affordable Housing Act."
2. (New section) The Legislature finds and declares that:
a. Vacant and abandoned properties significantly burden a municipality and its taxpayers by causing municipal taxpayers to pay the share of tax revenue that it is not collected by these properties, while the proliferation of foreclosures burdens both the State's courts and local economies;
b. This loss in tax revenue causes an increase in the municipality's statutorily required reserve for uncollected taxes, thereby causing taxpayers to pay higher property taxes, which gets passed on to residential tenants through increased costs in rental housing;
c. Over 300,000 housing units in New Jersey are currently vacant, many of which are tax-delinquent, abandoned, or underutilized, contributing to and compounding the State's severe shortage of more than 200,000 affordable housing units for low- and moderate-income residents;
d. While the "New Jersey Land Bank Law," sections 1 through 16 of P.L.2019, c.159, (C.40A:12A-74 et seq.) provided municipalities with some tools to repurpose certain properties, municipalities remain unable to expeditiously repurpose these properties, and suffer a lack of funding, technical support, and centralized coordination to implement municipal efforts to repurpose these properties at scale;
e. The Legislature, mindful of both Constitutional due process requirements and the United States Supreme Court's decision in Tyler v. Hennepin County, 598 U.S. 631 (2023), finds that a targeted State investment and legal framework to support the acquisition, rehabilitation, and conversion of vacant, abandoned, and foreclosed properties into affordable housing is critical to support equitable economic development and resolve the State's housing emergency;
f. The New Jersey Supreme Court, in Township of Montville v. Block 69, Lot 10, 74 N.J. 1 (1977), held that a property owner is entitled to either personal service or mailed notice of foreclosure as a requirement of constitutional due process, that notice by publication alone is insufficient, and that, without prior notice to an owner at the owner's last known address, jurisdiction is lacking to enter a judgment to foreclose the right of redemption against the owner.
g. It is necessary, however, to modify the statutory process to foreclose the right of redemption for foreclosed properties in a manner that remains consistent with the United States Supreme Court's decision in Tyler v. Hennepin County, 598 U.S. 631 (2023), and yet enables foreclosed properties to be expeditiously repurposed in a manner that reduces the municipal tax burden, reduces pass through rental costs for low- and moderate-income renters, and enhances a municipality's ability to provide affordable housing;
h. Although the issue in Tyler v. Hennepin County, 598 U.S. 631 (2023) was not service of process, nor was service contested, after the decision, the New Jersey Supreme Court issued temporary court rules that required personal service of all in rem complaints and personal service of the motion for final judgment, as part of an effort to facilitate the ability of a property owner to protect any surplus equity in the property;
i. Personal service substantially slows down the ability of a municipality or other tax lien holder to foreclose the right of redemption and repurpose the property by several months, causing municipalities, and ultimately taxpayers and renters, to be subject to significant expenses for litigation and the lack of tax revenue for numerous months on these foreclosed properties, compared to service by certified mail;
j. On July 10, 2024, the Governor signed P.L.2024, c.39 (C.54:5-98.1 et al.) into law, which amended the "tax sale law," R.S.54:5-1 et seq., and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), to comply with Tyler v. Hennepin County, 598 U.S. 631 (2023), and provide to an owner the right to request a sheriff's sale to protect any surplus equity, unless the property meets the definition of an abandoned property;
k. Despite the enactment of P.L.2024, c.39 (C.54:5-98.1 et al.), the New Jersey Supreme Court has not vacated the temporary court rules that still require personal service;
l. While, as recognized by the New Jersey Supreme Court in Winberry v. Salsbury, 5 N.J. 240, cert. denied, 340 U.S. 877 (1950), the Supreme Court has exclusive power to enact rules of practice and procedure, which power is subject to and exclusive of substantive law within the domain of the Legislature, the substantive-procedural dichotomy has been analyzed in subsequent cases with mixed results for legislative enactments having both substantive and procedural characteristics;
m. The Supreme Court observed, in State v. Otis Elevator Co., 12 N.J. 1 (1953), that the court, as part of its constitutional obligations, is tasked with providing rules that are efficient, equitable, and procedurally practicable;
n. In State v. Vega-Larregui, 246 N.J. 94 (2021), the Supreme Court reemphasized that the Supreme Court may permit or accommodate the lawful and reasonable exercise of the powers of the other branches of government, even as that might impinge upon the Court's constitutional concerns in the judicial area, as the purpose of the separation of powers is not to create three "watertight" governmental compartments, stifling cooperative action among the three branches of government;
o. Supreme Court jurisprudence since Winberry v. Salsbury, 5 N.J. 240 (1950), has demonstrated that the procedural characteristics of a legislative enactment do not necessarily determine the enactment's fate, and that judicial power need not in every context or application be preclusive;
p. Analysis of legislative enactments pivots on a two-pronged analysis of first, whether the judiciary has fully exercised judicial power with respect to the matter at issue, and whether the statute serves a legitimate legislative goal and does not interfere with judicial prerogatives or only indirectly touches upon the judicial domain;
q. The Supreme Court has cautioned that courts are to act with restraint when legislation, touching on the judicial sphere, advances a "significant governmental purpose" and does not interfere with the Supreme Court's administration of the judicial system;
r. Accordingly, the Supreme Court has upheld legislative enactments concerning the Tort Claims Act, Busik v. Levine, 63 N.J. 351 (1973); pre-trial intervention, State v. Leonardis, 73 N.J. 360 (1977); the Conflict of Interest Law, Knight v. City of Margate, 86 N.J. 374 (1981); preclusion of judicial suspension of sentences and enactment of mandatory sentencing laws, State v. Des Marets, 92 N.J. 62 (1983); statutory post-employment restrictions for State employees, In re Advisory Comm. On Pro. Ethics Op. 705, 192 N.J. 46 (2007); and plea bargaining, In re New Jersey Rules of Ct., Part VII, Guideline 4, ____ N.J. ____ (2024);
s. Despite Passaic Cty. Prob. Officers' Ass'n. v. County of Passaic, 73 N.J. 247 (1977), in which the Supreme Court observed that legislative enactments are only upheld if the enactments have not in any way interfered with the proper administration of the court system, as recently as 2024, in In re New Jersey Rules of Ct., Part VII, Guideline 4, ____ N.J. ____ (2024), the Supreme Court upheld P.L.2023, c.191 (C.39:4-50.21a et al.), which directly conflicted with judicial authority that, according to the Supreme Court, was well within the Court's rule-making authority and for which the "judiciary [had] fully exercised its power with respect to the matter at issue;"
t. Accordingly, even if the New Jersey Supreme Court determines that a legislative enactment touches on an area within the judicial sphere, the Supreme Court has upheld numerous statutes despite even a direct conflict with matters for which the judiciary had already exercised its power;
u. In conducting an evaluation, as the Supreme Court observed in State v. Loftin, 157 N.J. 253 (1999), the Supreme Court remains mindful of the obligation to uphold a legislative enactment absent constitutional repugnance;
v. Amidst the affordable housing emergency facing the State, it is necessary for the Legislature to enhance the ability of a tax lien holder to foreclose the right of redemption by, in addition to service by publication, requiring service by certified mail instead of personal service;
w. Requiring service by certified mail instead of personal service enables tax lien holders to repurpose over 300,000 abandoned, vacant, or foreclosed properties that may be used for the production of affordable housing; provide a solution to the State's severe affordable housing shortage; and reduce the municipal, taxpayer, and renter burden for unpaid property taxes;
x. Such legislation represents a significant government interest, which squarely comports with Tyler v. Hennepin County, 598 U.S. 631 (2023);
y. That significant government interest is best served, in the spirit of comity and the public interest, by collaboration among the coordinate branches of government;
z. Therefore, it is necessary, in the public interest, and proper for the Legislature to establish a targeted State investment and legal framework to accelerate the acquisition, rehabilitation, and conversion of vacant, abandoned, and foreclosed properties into affordable housing, which can improve neighborhood stability, expand homeownership, and support equitable economic development, while reducing costs for taxpayers and residential tenants.
3. (New section) a. As used in this section:
"Affordable housing" means an inclusionary development, as defined pursuant to subsection f. of section 4 of P.L.1985, c.222 (C.52:27D-304), and other low- and moderate-income housing.
"Agency" means the New Jersey Housing and Mortgage Finance Agency, established pursuant to section 4 of P.L.1983, c.530 (C.55:14K-4).
"Executive director" means the Executive Director of the New Jersey Housing and Mortgage Finance Agency.
"Land bank entity" means an entity authorized pursuant to P.L.2019, c.159 (C.40A:12A-74 et seq.) to acquire and manage vacant, abandoned, or foreclosed properties for redevelopment.
"Low-income housing" means the same as the term is defined pursuant to subsection c. of section 4 of P.L.1985, c.222 (C.52:27D-304).
"Moderate-income housing" means the same as the term is defined pursuant to subsection d. of section 4 of P.L.1985, c.222 (C.52:27D-304).
"Qualified housing nonprofit" means a nonprofit organization with a primary mission, as explicitly stated in the governing documents of the nonprofit organization, of developing, rehabilitating, or managing affordable housing.
"Revitalization fund" means the Vacant Property Revitalization Fund established pursuant to subsection b. of this section.
b. There is established in the New Jersey Housing and Mortgage Finance Agency the Vacant Property Revitalization Fund, which shall be a nonlapsing, revolving fund administered by the agency.
c. The revitalization fund shall provide competitive grants or low-interest loans to:
(1) land bank entities for the acquisition, rehabilitation, and disposition of vacant, abandoned, or foreclosed properties; and
(2) qualified housing nonprofits partnering with land bank entities for affordable housing development.
d. Grants or loans shall be used for eligible costs, including but not limited to: property acquisition, environmental remediation, demolition, construction or rehabilitation, legal and title clearance services.
e. Priority shall be given to proposals that:
(1) dedicate at least 50 percent of acquired residential properties to low- and moderate-income housing;
(2) include partnerships with local nonprofits, or community development corporations, as defined pursuant to 42 U.S.C. s.9802; and
(3) target communities with high concentrations of vacancy or foreclosure.
f. The agency shall develop and maintain a public dashboard on the agency's Internet website, which shall be updated annually by the agency, showing the number of vacant, abandoned, or foreclosed properties acquired, the number of affordable housing units created, the average cost per unit produced, geographic distribution of program activity, and partner entities and outcomes from the revitalization fund.
g. A land bank entity or qualified housing nonprofit that receives a grant or loan pursuant to subsection c. of this section shall:
(1) not use more than 20 percent of the total amount of the grant or loan for administrative costs and expenses, overhead costs, consultants, or other similar expenses;
(2) adopt, implement, and execute tenant protection and anti-displacement strategies that are promulgated by the executive director and the Director of the Office of Homelessness Prevention, established pursuant to the "Prevention of Homelessness Act (1984)," P.L.1984, c.180 (C.52:27D-280 et seq.), pursuant to subsection j. of this section; and
(3) ensure that, notwithstanding the provisions of subsection b. of section 36 of P.L.2024, c.2 (C.52:27D-313.3) to the contrary, for any residential housing developed with grants or loans pursuant to subsection c. of this section, the residential housing contains a deed restriction, with the minimum number of affordability years being 20 years and with the option to renew, requiring any future property owner to sell the property to a household earning no more than 120 percent of the area median income, or rent the property as an affordable housing unit to a household who earns no more than 100 percent of the area median income.
h. (1) A land bank entity or qualified housing nonprofit that violates subsection g. of this section shall be liable to a penalty of not less than an amount equal to the grant or loan provided pursuant to subsection c. of this section, to be collected in a civil action by a summary proceeding under the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court, Law Division shall have jurisdiction to enforce the penalty pursuant to this subsection upon the complaint of the Attorney General. A court may require additional damages or other remedies as the court deems proper and that are necessary to deter violations of subsection g. of this section. Notwithstanding any provision of subsection f. of section 2 of the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-11) to the contrary, damages or other remedies awarded pursuant to this subsection shall be deposited in the revitalization fund, established pursuant to subsection b. of this section.
(2) Notwithstanding, and in addition to, a penalty collected pursuant to paragraph (1) of this subsection, a land bank entity or a qualified housing nonprofit that violates subsection g. of this section shall be subject to a complaint at the discretion of any person or entity, including a developer, residential tenant, or another land bank entity or qualified housing nonprofit, directly and adversely affected by a violation, which shall be construed liberally, if the directly and adversely affected person or entity files a complaint with the Superior Court of New Jersey, Law Division within 12 months of the date that the violation occurred. The complainant shall be permitted to recover: a civil penalty equal to not less than 50 percent of the grant or loan provided pursuant to subsection c. of this section, reasonable attorney's fees, court costs, expenses for expert witnesses, and other related fees and expenses incurred in proving a violation of subsection c. of this section. The Superior Court, Law Division shall have jurisdiction over the proceedings upon the complaint by a person or entity, including a developer, residential tenant, or another land bank entity or qualified housing nonprofit, directly and adversely affected by a violation. The court may award additional damages or other remedies as the court deems proper and that are necessary to deter violations of subsection g. of this section.
i. The executive director shall submit an annual report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), which shall contain data from the public dashboard, required pursuant to subsection f. of this section; outcomes; challenges; and equity impacts resulting from grants or loans provided pursuant to subsection c. of this section.
j. The executive director and the Director of the Office of Homelessness Prevention shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to effectuate the provisions of this section, which shall include rules that:
(1) set forth requirements for the content, adoption, implementation, and execution of tenant protection and anti-displacement strategies, and specify actions by a land bank entity or a qualified housing nonprofit that constitute a failure to adopt, implement, and execute tenant protection and anti-displacement strategies, as required pursuant to paragraph (2) of subsection g. of this section; and
(2) update the Uniform Housing Affordability Controls to reflect the provisions of both paragraph (3) of subsection g. of this section, and subsection b. of section 36 of P.L.2024, c.2 (C.52:27D-313.3).
k. Nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to limit, impair, or in any manner affect any right, remedy, or relief available to a property owner, or the owner's heirs, successors, or assignees in law or in equity.
4. R.S.54:5-86 is amended to read as follows:
54:5-86. a. When the municipality is the purchaser of a tax sale certificate, the municipality, or its assignee or transferee, may, at any time after the expiration of the term of [six] three months from the date of sale, institute an action to foreclose the right of redemption. Except as provided in subsection a. of section 39 of P.L.1996, c.62 (C.55:19-58) or as provided in subsection b. of this section, for all other persons that do not acquire a tax sale certificate from a municipality, an action to foreclose the right of redemption may be instituted at any time after the expiration of the term of [two years] one year from the date of sale of the tax sale certificate. On instituting the action, the right to redeem shall exist and continue until barred by the judgment of the Superior Court, except as set forth in R.S.54:5-87.
b. Any person or municipality holding a tax sale certificate on a property that meets the definition of abandoned property as set forth in P.L.2003, c.210 (C.55:19-78 et al.), either at the time of the tax sale or thereafter, may at any time file an action with the Superior Court in the county wherein said municipality is situate, demanding that the right of redemption on such property be barred, pursuant to the "tax sale law," R.S.54:5-1 et seq., or the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.). The filing shall include a certification by the public officer or the tax collector that the property is abandoned, provided pursuant to subsection d. of section 6 of P.L.2003, c.210 (C.55:19-83). In the event that the certificate holder has unsuccessfully sought such certification from the public officer or tax collector, as the case may be, the certificate holder may submit to the court evidence that the property is abandoned, accompanied by a report and sworn statement by an individual holding appropriate licensure or professional qualifications, and shall provide a copy of those documents submitted to the court to the public officer and the tax collector. On the basis of this submission and any submission provided by the public officer or tax collector, as the case may be, the court shall determine whether the property meets the definition of abandoned property.
c. Any person holding a tax sale certificate on a property that meets the definition of abandoned property as set forth in P.L.2003, c.210 (C.55:19-78 et al.), either at the time of the tax sale or thereafter, may enter upon that property at any time after written notice to the owner by certified mail return receipt requested in order to make repairs, or abate, remove or correct any condition harmful to the public health, safety and welfare, or any condition that is materially reducing the value of the property.
d. Any sums incurred or advanced pursuant to subsection c. of this section may be added to the unpaid balance due the holder of the tax sale certificate at the statutory interest rate for subsequent liens.
(cf: P.L.2024, c.39, s.2)
5. (New section) The Legislature finds and declares that:
a. Vacant and abandoned properties significantly burden a municipality and its taxpayers by causing municipal taxpayers to pay the share of tax revenue that it is not collected by these properties, while the proliferation of foreclosures burdens both the State's courts and local economies;
b. This loss in tax revenue causes an increase in the municipality's statutorily required reserve for uncollected taxes, thereby causing taxpayers to pay higher property taxes, which gets passed on to residential tenants through increased costs in rental housing;
c. Over 300,000 housing units in New Jersey are currently vacant, many of which are tax-delinquent, abandoned, or underutilized, contributing to and compounding the State's severe shortage of more than 200,000 affordable housing units for low- and moderate-income residents;
d. While the "New Jersey Land Bank Law," sections 1 through 16 of P.L.2019, c.159, (C.40A:12A-74 et seq.) provided municipalities with some tools to repurpose certain properties, municipalities remain unable to expeditiously repurpose these properties, and suffer a lack of funding, technical support, and centralized coordination to implement municipal efforts to repurpose these properties at scale;
e. The Legislature, mindful of both Constitutional due process requirements and the United States Supreme Court's decision in Tyler v. Hennepin County, 598 U.S. 631 (2023), finds that a targeted State investment and legal framework to support the acquisition, rehabilitation, and conversion of vacant, abandoned, and foreclosed properties into affordable housing is critical to support equitable economic development and resolve the State's housing emergency;
f. The New Jersey Supreme Court, in Township of Montville v. Block 69, Lot 10, 74 N.J. 1 (1977), held that a property owner is entitled to either personal service or mailed notice of foreclosure as a requirement of constitutional due process, that notice by publication alone is insufficient, and that, without prior notice to an owner at the owner's last known address, jurisdiction is lacking to enter a judgment to foreclose the right of redemption against the owner.
g. It is necessary, however, to modify the statutory process to foreclose the right of redemption for foreclosed properties in a manner that remains consistent with the United States Supreme Court's decision in Tyler v. Hennepin County, 598 U.S. 631 (2023), and yet enables foreclosed properties to be expeditiously repurposed in a manner that reduces the municipal tax burden, reduces pass through rental costs for low- and moderate-income renters, and enhances a municipality's ability to provide affordable housing;
h. Although the issue in Tyler v. Hennepin County, 598 U.S. 631 (2023) was not service of process, nor was service contested, after the decision, the New Jersey Supreme Court issued temporary court rules that required personal service of all in rem complaints and personal service of the motion for final judgment, as part of an effort to facilitate the ability of a property owner to protect any surplus equity in the property;
i. Personal service substantially slows down the ability of a municipality or other tax lien holder to foreclose the right of redemption and repurpose the property by several months, causing municipalities, and ultimately taxpayers and renters, to be subject to significant expenses for litigation and the lack of tax revenue for numerous months on these foreclosed properties, compared to service by certified mail;
j. On July 10, 2024, the Governor signed P.L.2024, c.39 (C.54:5-98.1 et al.) into law, which amended the "tax sale law," R.S.54:5-1 et seq., and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), to comply with Tyler v. Hennepin County, 598 U.S. 631 (2023), and provide to an owner the right to request a sheriff's sale to protect any surplus equity, unless the property meets the definition of an abandoned property;
k. Despite the enactment of P.L.2024, c.39 (C.54:5-98.1 et al.), the New Jersey Supreme Court has not vacated the temporary court rules that still require personal service;
l. While, as recognized by the New Jersey Supreme Court in Winberry v. Salsbury, 5 N.J. 240, cert. denied, 340 U.S. 877 (1950), the Supreme Court has exclusive power to enact rules of practice and procedure, which power is subject to and exclusive of substantive law within the domain of the Legislature, the substantive-procedural dichotomy has been analyzed in subsequent cases with mixed results for legislative enactments having both substantive and procedural characteristics;
m. The Supreme Court observed, in State v. Otis Elevator Co., 12 N.J. 1 (1953), that the court, as part of its constitutional obligations, is tasked with providing rules that are efficient, equitable, and procedurally practicable;
n. In State v. Vega-Larregui, 246 N.J. 94 (2021), the Supreme Court reemphasized that the Supreme Court may permit or accommodate the lawful and reasonable exercise of the powers of the other branches of government, even as that might impinge upon the Court's constitutional concerns in the judicial area, as the purpose of the separation of powers is not to create three "watertight" governmental compartments, stifling cooperative action among the three branches of government;
o. Supreme Court jurisprudence since Winberry v. Salsbury, 5 N.J. 240 (1950), has demonstrated that the procedural characteristics of a legislative enactment do not necessarily determine the enactment's fate, and that judicial power need not in every context or application be preclusive;
p. Analysis of legislative enactments pivots on a two-pronged analysis of first, whether the judiciary has fully exercised judicial power with respect to the matter at issue, and whether the statute serves a legitimate legislative goal and does not interfere with judicial prerogatives or only indirectly touches upon the judicial domain;
q. The Supreme Court has cautioned that courts are to act with restraint when legislation, touching on the judicial sphere, advances a "significant governmental purpose" and does not interfere with the Supreme Court's administration of the judicial system;
r. Accordingly, the Supreme Court has upheld legislative enactments concerning the Tort Claims Act, Busik v. Levine, 63 N.J. 351 (1973); pre-trial intervention, State v. Leonardis, 73 N.J. 360 (1977); the Conflict of Interest Law, Knight v. City of Margate, 86 N.J. 374 (1981); preclusion of judicial suspension of sentences and enactment of mandatory sentencing laws, State v. Des Marets, 92 N.J. 62 (1983); statutory post-employment restrictions for State employees, In re Advisory Comm. On Pro. Ethics Op. 705, 192 N.J. 46 (2007); and plea bargaining, In re New Jersey Rules of Ct., Part VII, Guideline 4, ____ N.J. ____ (2024);
s. Despite Passaic Cty. Prob. Officers' Ass'n. v. County of Passaic, 73 N.J. 247 (1977), in which the Supreme Court observed that legislative enactments are only upheld if the enactments have not in any way interfered with the proper administration of the court system, as recently as 2024, in In re New Jersey Rules of Ct., Part VII, Guideline 4, ____ N.J. ____ (2024), the Supreme Court upheld P.L.2023, c.191 (C.39:4-50.21a et al.), which directly conflicted with judicial authority that, according to the Supreme Court, was well within the Court's rule-making authority and for which the "judiciary [had] fully exercised its power with respect to the matter at issue;"
t. Accordingly, even if the New Jersey Supreme Court determines that a legislative enactment touches on an area within the judicial sphere, the Supreme Court has upheld numerous statutes despite even a direct conflict with matters for which the judiciary had already exercised its power;
u. In conducting an evaluation, as the Supreme Court observed in State v. Loftin, 157 N.J. 253 (1999), the Supreme Court remains mindful of the obligation to uphold a legislative enactment absent constitutional repugnance;
v. Amidst the affordable housing emergency facing the State, it is necessary for the Legislature to enhance the ability of a tax lien holder to foreclose the right of redemption by, in addition to service by publication, requiring service by certified mail instead of personal service;
w. Requiring service by certified mail instead of personal service enables tax lien holders to repurpose over 300,000 abandoned, vacant, or foreclosed properties that may be used for the production of affordable housing; provide a solution to the State's severe affordable housing shortage; and reduce the municipal, taxpayer, and renter burden for unpaid property taxes;
x. Such legislation represents a significant government interest, which squarely comports with Tyler v. Hennepin County, 598 U.S. 631 (2023);
y. That significant government interest is best served, in the spirit of comity and the public interest, by collaboration among the coordinate branches of government;
z. Therefore, it is necessary, in the public interest, and proper for the Legislature to establish a targeted State investment and legal framework to accelerate the acquisition, rehabilitation, and conversion of vacant, abandoned, and foreclosed properties into affordable housing, which can improve neighborhood stability, expand homeownership, and support equitable economic development, while reducing costs for taxpayers and residential tenants.
6. R.S.54:5-87 is amended to read as follows:
54:5-87. a. The Superior Court, in an action to foreclose the right of redemption brought pursuant to subsection b. of R.S.54:5-86, may give full and complete relief under this chapter, in accordance with other statutory authority of the court, to bar the right of redemption, to bar claims to surplus equity, to foreclose all prior or subsequent alienations and descents of the lands and encumbrances thereon, except subsequent municipal liens, and to adjudge an absolute and indefeasible estate of inheritance in fee simple, to be vested in the purchaser. The judgment shall be final upon the defendants, 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 and no application shall be entertained to reopen the judgment after three months from the date thereof, and then only upon the grounds of lack of jurisdiction or fraud in the conduct of the suit. 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 Voidable Transactions Act," R.S.25:2-20 et seq. An action brought pursuant to subsection b. of R.S.54:5-86 shall not require a judicial sale as in the manner of the foreclosure of a mortgage or an Internet auction through the office of the county sheriff.
b. (1) (a) Except as provided by subparagraph (b) of this paragraph, a complaint to bar the right of redemption, filed pursuant to subsection a. of R.S.54:5-86, shall only be served by publication and by regular and certified mail. Notice of the action shall be published in a newspaper of general circulation in the municipality where the affected lands are located. If there is no newspaper of general circulation in the municipality, the plaintiff shall publish the notice on the Internet website of a newspaper that is targeted to reach readers residing in the municipality where the affected lands are located. Except as provided by subparagraph (b) of this section, within seven days of the date of publication of the notice of foreclosure, the plaintiff shall serve a copy of the notice by regular and certified mail to any person, or business or government entity, entitled to notice of the foreclosure pursuant to the "tax sale law," R.S.54:5-1 et seq. The notice shall state that an answer shall be filed within 35 days of the date of publication, or the date of the mailing of the notice, whichever is later.
(b) Notice required pursuant to subparagraph (a) of this paragraph shall only be personally served if notice by certified mail is returned as undeliverable or where a service recipient's address is disputed by that recipient.
(2) In an action brought pursuant to subsection a. of R.S.54:5-86, in order to preserve any equity that may exist in the property being foreclosed, the owner, or the owner's heirs, shall have the right to demand, by written request to the Superior Court before the date that the final judgment is entered, that the holder of the tax sale certificate foreclose the right to redeem that certificate in the same manner as a mortgage through a judicial sale as in the manner of the foreclosure of a mortgage of the property through the office of the county sheriff or, in the alternative, through an Internet auction of the property through the office of the county sheriff. The final judgment shall provide for a writ of execution to the sheriff of the county in which the property is located and the holding of either a judicial sale or an Internet auction. In the event that the owner or the owner's heirs do not demand a judicial sale or an Internet auction, the owner of the tax sale certificate may proceed under subsection a. of this section and foreclose without a judicial sale or an Internet auction, and the owner and the owner's heirs shall have no claim against the holder of the tax sale certificate for any equity in the property. The amount received through the judicial sale or the Internet auction, as appropriate, shall be conclusively presumed to be the fair market value of the property. In the event that no one bids on the property through the judicial sale or the Internet auction, and the owner of the tax sale certificate obtains fee title from the sheriff, it shall be conclusively presumed that there is no equity in the property. In the event that the sheriff has not established an Internet auction, the owner or the owner's heirs shall only be entitled to a judicial sale as in the manner of the foreclosure of a mortgage.
The sheriff of the county shall deposit with the clerk of the Superior Court any surplus funds derived from the judicial sale or the Internet auction, as appropriate, after the holder of the tax sale certificate has been paid the redemption moneys, allowable costs, and attorney's fees as set forth by the court in the final judgment of foreclosure. The sheriff shall deduct the costs to the office of the county sheriff of holding the judicial sale or the Internet auction, as appropriate, which shall have been withheld by the sheriff from those funds. The process set forth in this section shall be the exclusive method through which the owner, or the owner's heirs, may assert a claim to any surplus funds by motion to the Superior Court.
Application for, and distribution of, surplus moneys held by the clerk of the court shall be made in accordance with N.J.S.2A:50-37 and the applicable Rules of Court.
Notwithstanding the provisions of N.J.S.2A:50-64, interest shall continue to accrue on the tax sale certificate pursuant to R.S.54:4-67 through the date of actual payment.
As used in this section, "surplus funds" shall mean and include any funds derived from the judicial sale as in the manner of the foreclosure of a mortgage or the Internet auction through the office of the county sheriff of a property pursuant to this section, after the holder of the tax sale certificate has been fully redeemed, and paid moneys due and owing to the holder of the tax sale certificate. The redemption amount shall also include any costs charged by the sheriff to the holder of the tax sale certificate to conduct the judicial sale as in the manner of the foreclosure of a mortgage or the Internet auction.
c. In the event that any federal statute or regulation requires a judicial sale as in the manner of the foreclosure of a mortgage 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.
(cf: P.L.2024, c.39, s.3)
7. Section 4 of P.L.1948, c.96 (C.54:5-104.32) is amended to read as follows:
4. Any municipality or abandoned property certificate holder may proceed, In Rem, pursuant to the provisions of the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), similarly to bar rights of redemption, after said certificate has been recorded in the office of the county recording officer, on condition that notice has been provided pursuant to section 14 of P.L.1948, c.96 (C.54:5-104.42). Neither the foreclosure nor the recording of any such judgment or certificate shall be construed to be a sale, transfer, or conveyance of title or interest to the subject property under the provisions of the "Uniform Voidable Transactions Act," R.S.25:2-20 et seq.
(cf: P.L.2021, c.92, s.25)
8. Section 6 of P.L.1948, c.96 (C.54:5-104.34) is amended to read as follows:
6. No action may be instituted by a municipality under the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), on any tax sale certificate unless:
a. More than [six] three months have expired from the date of the tax sale out of which any such certificate arose; and
b. All or any portion of the general land taxes levied and assessed against the land for 21 months next preceding the commencement of the action, other than those subject to payment by installments authorized by a resolution adopted pursuant to R.S.54:5-65, remains unpaid.
Such action on a tax sale certificate may include the lien for unpaid taxes, utility liens or any other municipal liens in conjunction with or independent of one another.
(cf: P.L.2015, c.16, s.5)
9. Section 14 of P.L.1948, c.96 (C.54:5-104.42) is amended to read as follows:
R.S.54:5-104.42. a. The copy of the complaint filed in the office of the county recording officer [and] , the publication [,] and service required pursuant to this section, and the posting of the notice as provided by the Rules Governing the Courts of the State of New Jersey, shall be notice to the world, including all persons claiming any right, title, interest in or lien upon the land sought to be affected by said complaint, whether or not the names of said persons appear in said complaint, of the institution of said foreclosure proceedings in rem, and that unless said lands be redeemed in the cause as hereinafter provided, the right, title, interest or lien of any such persons and the claim of any or all other persons, whether such right, title, interest, lien or claim has or shall have become vested or shall have arisen or may arise prior to or subsequent to the filing of said complaint, shall be foreclosed and forever debarred and that an indefeasible estate in fee simple in said lands shall be vested in the plaintiff, by the judgment of the said court, as provided in this act.
b. (1) Except as provided by paragraph (2) of this subsection, a complaint to bar the right of redemption, filed pursuant to section 4 of P.L.1948, c.96 (C.54:104.32), shall only be served by publication and by regular and certified mail. A municipality or abandoned property certificate holder shall publish the notice of foreclosure in a newspaper of general circulation in the municipality where the affected lands are located. If there is no newspaper of general circulation in the municipality, the plaintiff shall publish the notice on the Internet website of a newspaper that is targeted to reach readers residing in the municipality where the affected lands are located. Except as provided by paragraph (2) of this subsection, within seven days of the date of publication of the notice of foreclosure, the plaintiff shall serve a copy of the notice by regular and certified mail to any person, or business or government entity, entitled to notice of the foreclosure pursuant to the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.). The notice shall state that an answer shall be filed within 35 days of the date of publication, or the date of the mailing of the notice, whichever is later.
(2) Notice required pursuant to paragraph (1) of this paragraph shall be personally served only if notice by certified mail is returned as undeliverable or where a service recipient's address is disputed by that recipient.
(cf: P.L.1979, c.414, s.1)
10. There is appropriated to the New Jersey Housing and Mortgage Finance Agency from the General Fund, a sum of $50,000,000, which shall be deposited in the Vacant Property Revitalization Fund, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), to effectuate the provisions of that section. The moneys appropriated to the fund pursuant to this section shall be initially allocated as grants or low-interest loans over a three-year period.
11. This
act shall take effect on the first day of the third month next following the
date of enactment, except that the Executive Director of the New Jersey Housing
and Mortgage Finance Agency and the Director of the Office of Homelessness
Prevention shall take anticipatory action necessary to effectuate the
provisions of sections 1 through 3 of this act.
STATEMENT
This bill: (1) establishes the "Vacant Property Revitalization Fund" (revitalization fund) in the New Jersey Housing and Mortgage Finance Agency (agency) to provide grants and low-interest loans to land bank entities and qualified housing nonprofits to support the acquisition, rehabilitation, and disposition of certain housing; and (2) modifies the timeframe during which a tax lien holder can foreclose the right of redemption.
Specifically, the bill establishes the revitalization fund in the agency, which is to be a nonlapsing, revolving fund, to be administered by the agency, for the purpose of providing competitive grants and low-interest loans to:
� land bank entities, defined pursuant to the "New Jersey Land Bank Law," P.L.2019, c.159, (C.40A:12A-74 et seq.), for the acquisition, rehabilitation, and disposition of vacant, abandoned, or foreclosed properties; and
� qualified housing nonprofits partnering with land bank entities for the development of housing that is substantially reserved as affordable housing.
The bill specifies that grants or loans are to be used for eligible costs, as set forth in the bill, and that priority is to be given for certain proposals. The bill requires the agency to develop and maintain a public dashboard on the agency's Internet website, which is to be updated annually by the agency, showing certain information required by the bill. The bill requires a land bank entity or qualified housing nonprofit that receives a grant or loan from the agency pursuant to the bill to:
� use not more than 20 percent of the total amount of the grant or loan for administrative costs and expenses, overhead costs, consultants, or other similar expenses;
� adopt, implement, and execute tenant protection and anti-displacement strategies that are promulgated by the Executive Director of the agency (executive director) and the Director of the Office of Homelessness Prevention pursuant to the bill; and
� ensure that residential housing developed with a grant or loan under the bill contains an affordability deed restriction, as specified in the bill.
The bill provides that a land bank entity or qualified housing nonprofit that violates the bill is to be liable to a penalty of not less than the grant or loan provided by the agency, which is to be collected in a civil action by the Attorney General. The bill requires that damages or other remedies are to be deposited into the revitalization fund. In addition to a penalty collected by the Attorney General, a land bank entity or a qualified housing nonprofit that violates the bill is to be subject to a complaint at the discretion of any person or entity, including a developer, residential tenant, or another land bank entity or qualified housing nonprofit, directly and adversely affected by a violation of the bill, if the affected person or entity files a complaint with the Superior Court of New Jersey, Law Division within 12 months of the date that the violation occurred. The bill permits the complainant to recover: a civil penalty equal to not less than 50 percent of the grant or loan provided by the agency, reasonable attorney's fees, court costs, expenses for expert witnesses, and other related fees and expenses incurred in proving a violation of the bill. For actions instituted by the Attorney General and by adversely affected persons or entities, the bill permits the court to award additional damages or other remedies as the court deems proper and that are necessary to deter violations of the bill.
The bill requires the executive director to submit an annual report to the Governor and Legislature, which is to contain data from the public dashboard, outcomes, challenges, and equity impacts resulting from grants or loans provided pursuant to the bill.
The bill requires the executive director and the Director of the Office of Homelessness Prevention to adopt rules and regulations to effectuate the provisions of the bill, which are to include necessary updates to the Uniform Housing Affordability Controls, and rules that set forth requirements for the content, adoption, implementation, and execution of tenant protection and anti-displacement strategies, and which are to specify actions by a land bank entity or a qualified housing nonprofit that constitute a failure to adopt, implement, and execute tenant protection and anti-displacement strategies.
The bill also modifies certain timeframes under the "tax sale law," R.S.54:5-1 et seq. (tax sale law), and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.) (In Rem Tax Act), to reduce the time period, after which, a municipality, or its assignee or transferee, or other person that acquires a tax sale certificate, may institute an action to foreclose the right of redemption. The bill reduces the time period to from six months to three months for a municipality, or its assignee or transferee, which is the purchaser of a tax lien, and from two years to one year for all other persons.
The bill specifies that, for both the tax sale law and the In Rem Tax Act, a complaint to bar the right of redemption is only to be served by publication and by regular and certified mail, unless the notice by certified mail is returned as undeliverable or the service recipient's address is disputed by that recipient. The bill requires that notice of the action is to be published in a newspaper of general circulation in the municipality where the affected lands are located. If there is no newspaper of general circulation in the municipality, the bill requires that the plaintiff publish the notice on the Internet website of a newspaper that is targeted to reach readers residing in the municipality where the affected lands are located. Within seven days of the date of publication of the notice of foreclosure, the bill requires that the plaintiff serve a copy of the notice by regular and certified mail to any person, or business or government entity, entitled to notice of the foreclosure under the tax sale law or the In Rem Tax Act, respectively. The bill requires the notice to state that an answer is to be filed within 35 days of the date of publication, or the date of the mailing of the notice, whichever is later.
The bill appropriates $50 million from the General Fund to the revitalization fund to effectuate the provisions of section 3 of the bill, which funds are to be initially allocated as grants or low-interest loans over a three-year period.
The bill would take effect on the first day of the third month next following the date of enactment, except that the executive director and the Director of the Office of Homelessness Prevention are required to take anticipatory action necessary to effectuate the provisions of the bill related to the revitalization fund.
