On December 6, 2012 New Jersey Gov. Chris Christie signed into law an Act permitting lenders to file a summary action to foreclose mortgages on “vacant and abandoned” residential property. The Act’s purpose is to reduce the time it takes to complete a foreclosure and thereafter return the property to an occupied status. The New Jersey Condominium Act, N.J.S.A. 46:8B-21(f), expressly provides that “liens for unpaid common expense assessments may be foreclosed by suit brought in the name of the Association in the same manner as a foreclosure of a mortgage on real property”.
Vacant and abandoned units have plagued condominium associations throughout the State of New Jersey. Whether this Act will prompt mortgage lenders to actively bring suit to foreclose on “vacant and abandoned” units will soon be determined. If the mortgage lender does in fact take ownership of the unit (or a new owner), condominium associations must remember that the mortgage lender (or the new owner) becomes immediately responsible for assessments moving forward.
If the Act does not prompt mortgage lenders to institute suit to foreclose “vacant and abandoned” units, condominium associations should be proactive and exercise their rights pursuant to N.J.S.A. 46:8B-21(f) by instituting their own foreclosure action. Please be advised that the condominium association will take the unit subject to the mortgage as well as any other superior liens. Of course, a title search should be performed to ascertain whether there is a mortgage or any other liens which may impact title post-sheriff’s sale.
The Act does define “vacant and abandoned” and a unit must meet certain criteria before it is qualified as a “vacant and abandoned” unit. Lenders or Associations interested in learning more about the nuances of the Act should contact Brian M. Rader, Esq. directly at brader@theraderlawfirm.com. The Act officially takes affect April 1st, 2013.
