What is a New Jersey Tax Sale Foreclosure?
If you fail to pay your property taxes in New Jersey, the municipality will eventually hold an auction where either a third party or the municipality itself will buy the right to pay off the outstanding taxes. Once the buyer has a tax lien against your house, they will be able to pursue a foreclosure against your home once a certain amount of time has passed (depending on who the buyer is). During this time period, you will have the opportunity to pay back the taxes and stay in your home, however you will be charged 18% interest of the monies you owe.
The following is a more detailed overview of the NJ tax foreclosure process.
Breaking Down The NJ Tax Sale Foreclosure Timeline
This process begins when you fall behind on your NJ property taxes for any reason.
- Your town/municipality will hold a tax lien sale where interested buyers will bid on the rights to your unpaid property taxes. Every municipality in New Jersey is required to have at least one sale of unpaid real estate taxes a year.
- The winning buyer will be given a tax sale certificate (TSC), which signifies that the holder now has a lien on your property.
- After the auction, you will have a period of time in which you can pay off the tax debt plus interest. This redemption period varies depending on the buyer (NJ Rev Stat § 54:5-86 (2013):
- If a third party wins the auction and is granted the TSC, you will have two years to pay off the tax debt and redeem your home before they can pursue foreclosure.
- If nobody buys the lien at the sale, the municipality will get the TSC. If this happens, you will have six months to pay off the tax debt before foreclosure can proceed.
- Once the redemption period ends, the lien buyer or municipality can begin the foreclosure process by filing a complaint with the court to foreclose.
How Can I Prevent a NJ Tax Foreclosure?
If there has been a tax lien placed on your home or the buyer has begun the foreclosure process, it is important to know that you have rights and options. The buyer has a specific set of rules that must be followed before they can take possession of your home, and you still have time to fight the foreclosure. However, in Tax sale Foreclosures there are very few defenses.
Contact the Law Office of Ira J. Metrick today to discuss your situation and assess your options for fighting a New Jersey tax sale foreclosure and staying in your home.