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*. It mandates that any excess equity remaining after a lienholder is reimbursed for property taxes and interest must be returned to the former property owner. The legislation prohibits the court from granting absolute ownership to the tax lien purchaser, instead requiring a judicial sale of the property. The bill prioritizes the reimbursement of lienholders and municipal liens in the distribution of proceeds from the sale, ensuring that the fair market value of the property is recognized.

In addition to these changes, the bill amends various sections of the tax sale law to align with the new requirements, including the prohibition of premium payments for tax sale certificates once the interest rate is bid down to zero. It also specifies that tax collectors must accept interest rate bids in defined increments and outlines the order of disbursement of funds from judicial sales. The tax collector's fee will be included in the face value of the tax sale certificate and will only be payable upon redemption or purchase of the certificate, further streamlining the foreclosure process and safeguarding property rights.

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