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 specifies the order of reimbursements from the sale proceeds to ensure that former property owners receive any remaining funds.

Additionally, the bill amends existing statutes to align with these changes, 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 establishes that the tax collector will 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 allowing municipalities to manage tax delinquencies effectively.

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