The bill revises the foreclosure process for property tax lien holders, ensuring that property owners can protect their equity during tax lien foreclosures. Key amendments include requiring payment for the sale to be made before its conclusion and extending the five-year redemption period if a property owner files for bankruptcy. Additionally, if a tax sale certificate is redeemed through a judicial sale or Internet auction within five years, the tax collector must refund the premium to the holder of the tax sale certificate, unless the holder is the successful bidder. The bill also mandates that property owners or their heirs can request a judicial sale or auction within 45 days of being served with a foreclosure complaint, and it requires that foreclosure notices inform owners of their rights regarding these options.

Furthermore, the legislation aligns with the U.S. Supreme Court decision in *Tyler v. Hennepin County, Minnesota*, affirming that property owners are entitled to any remaining equity after foreclosure. It clarifies that surplus funds from judicial sales will be available to property owners or their heirs, with unclaimed funds reverting to the municipality after five years if the tax sale certificate holder cannot be located. The act will take effect immediately for property tax lien foreclosure complaints filed on or after May 25, 2023, and will not impact any foreclosure actions with a final judgment entered prior to this date.

Statutes affected:
Introduced: 54:5-97.1, 54:5-104.59, 54:5-104.64