This bill revises New Jersey's tax lien foreclosure process to protect property owners' equity, responding to the U.S. Supreme Court's ruling in *Tyler v. Hennepin County* and a similar decision by the New Jersey Appellate Division. It mandates that any excess equity remaining after reimbursing the lienholder for property taxes and interest must be returned to the former property owner. The bill introduces a judicial sale process instead of granting an indefeasible estate to the purchaser, prioritizing the lienholder's reimbursement, followed by municipal liens, and ensuring any remaining funds are returned to the property owner.

Additionally, the bill amends existing statutes to align with these changes, including prohibiting premium payments for tax sale certificates once the interest rate is bid down to zero and requiring fractional increments for interest rate bids. It establishes a clear order for disbursement of funds from judicial sales, ensuring that the tax lien purchaser is reimbursed first, followed by municipal liens and other costs, with any remaining funds going to the defendant. These amendments aim to uphold property owners' rights and prevent "equity theft" during the foreclosure process.

Statutes affected:
Introduced: 54:5-104.32, 54:5-104.64, 54:5-113.6