This bill amends R.S.54:5-86 and R.S.54:5-87 to protect the equity accrued by property owners in tax sale foreclosure actions. It establishes that when a municipality or a private entity forecloses on a tax lien, the court will not grant ownership of the property to the tax lien holder. Instead, the court will prioritize the repayment of all property taxes, interest, and related costs incurred by the lien holder as a first lien on the property, ahead of any other liens, including municipal ones. Following the court's approval of the foreclosure action, the sheriff will conduct an Internet auction of the property, and the proceeds will be distributed to reimburse the lien holder and the municipality for any outstanding liens.

Additionally, the bill stipulates that within 14 days of the auction, the sheriff must reimburse the lien holder for their costs and any municipal liens, while any remaining funds will be returned to the original property owner. This approach aims to prevent the loss of equity for property owners facing foreclosure due to unpaid taxes, allowing them to retain some financial resources to secure alternative housing or cover other expenses. The bill seeks to address the perceived unfairness in the current system, where property owners can lose both their property and the equity built up in it during tax lien foreclosures.