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 bill 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 the reimbursement of lienholders, municipal liens, and the return of remaining funds to the former property owner.

Furthermore, the legislation amends existing statutes to ensure compliance with these new provisions, thereby preventing "equity theft." It specifies that the court cannot award property ownership to the tax lien purchaser, and instead, the judicial sale will determine the fair market value of the property. The bill also revises the bidding process for tax sale certificates, prohibiting premium payments once the interest rate reaches zero, and requires tax collectors to accept interest rate bids in increments of 0.25 percent. Overall, the bill aims to protect property owners' equity while allowing municipalities to recover owed taxes effectively.

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