This bill revises New Jersey's tax lien foreclosure process to safeguard the equity of property owners, in response 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 legislation introduces new legal requirements, including a judicial sale of the property instead of granting an indefeasible estate to the purchaser, and establishes a clear priority for disbursing funds from the sale, ensuring that lienholders are compensated first, followed by municipal liens, with any remaining funds returned to the property owner.

Additionally, the bill implements procedural changes to tax lien sales, such as prohibiting premium payments for tax sale certificates once the interest rate has been bid down to zero and requiring tax collectors to accept interest rate bids in specific increments. If no bids are made, the tax sale certificate will revert to the municipality at the maximum interest rate allowed. The bill also allows tax collectors to receive a fee of five percent on the amount of delinquent taxes when a tax sale certificate is sold, which will be included in the certificate's face value. Overall, the legislation aims to protect property owners' equity while enabling municipalities to manage tax delinquencies effectively.

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