This bill revises New Jersey's tax lien foreclosure process to safeguard the equity of property owners, in light of recent judicial rulings, including the U.S. Supreme Court's decision 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 establishes a judicial sale of the property instead of granting an indefeasible estate to the purchaser, ensuring that the former property owner receives any remaining funds after the lienholder and municipality are compensated.

Additionally, the bill introduces procedural changes to enhance fairness in the tax sale process. It prohibits premium payments for tax sale certificates once the interest rate has been bid down to zero, requires tax collectors to accept interest rate bids in fractional increments of 0.25 percent, and mandates the use of a random-number generator for selecting successful bidders when multiple bids are equal. Furthermore, tax collectors are allowed to charge a five percent fee on delinquent taxes when a tax sale certificate is sold, which will be included in the certificate's face value. These amendments aim to protect property owners' rights and address the issue of "equity theft" in tax lien foreclosures.

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