This bill enables municipalities in New Jersey to place a lien on the insurance proceeds of properties damaged by fire under specific conditions. It defines important terms such as "enforcement officer," "final settlement," and "total loss," and grants municipalities the authority to enact ordinances that allow them to claim against fire insurance or homeowners insurance proceeds. The lien established by this bill will take precedence over other liens, except for mortgage claims, and will specifically cover damages from fire or explosion, including debris removal. The bill also details the procedures for municipalities to notify insurance companies and enforce these liens, as well as the conditions under which the lien may expire.

Additionally, the bill requires municipalities to provide a mechanism for releasing lien amounts to insured property owners who commit in writing to restore the fire-damaged property within 120 days. If property owners do not provide reasonable proof of repairs within this timeframe, municipalities may retain the insurance proceeds to secure, repair, or demolish the property in accordance with local codes. The bill also mandates that owners of businesses and rental units maintain liability insurance for fire or explosion damages, with minimum coverage amounts set at $500,000 for general properties and $300,000 for multifamily homes with four or fewer units. This legislation is set to take effect 180 days after its enactment.

Statutes affected:
Introduced: 17:36-9, 40:10A-1