03 Sep New Jersey Legislative Update
The New Jersey legislature recently amended its laws governing the maintenance of vacant and abandoned residential properties, effective August 15, 2014.
NEW JERSEY SENATE BILL 1229
The governing body of any municipality may adopt ordinances to regulate the care, maintenance, security, and upkeep of the exterior of vacant and abandoned residential properties on which a summons and complaint in an action to foreclose has been filed.
An ordinance must provide that the lender filing the summons and complaint in an action to foreclose will be responsible for the care, maintenance, security, and upkeep of the exterior of the vacant and abandoned residential property, and if located outside New Jersey, will be responsible for appointing an in-State representative or agent to act for the foreclosing lender.
An ordinance must also authorize a public officer or any other local official responsible for administration of any property maintenance or public nuisance code to issue a notice to the lender filing the summons and complaint in an action to foreclose, if the public officer or other authorized municipal official determines that the lender has violated the ordinance by failing to provide for the care, maintenance, security, and upkeep of the exterior of the property. Such notice will require the person or entity to correct the violation within 30 days of receipt of the notice, or within 10 days of receipt of the notice if the violation presents an imminent threat to public health and safety. The issuance of this notice will constitute proof that a property is “vacant and abandoned.”
An ordinance must further provide that an out-of-State lender include the full name and contact information of the in-State representative or agent in the required notice.
An out-of-State lender found by the municipal court of the municipality in which the property subject to the ordinance is located, or by any other court of competent jurisdiction, to be in violation of the requirement to appoint an in-State representative or agent will be subject to a fine of $2,500 for each day of the violation. Any fines imposed on a lender for the failure to appoint an in-State representative or agent will commence on the day after the 10-day period for providing notice to the municipal clerk that a summons and complaint in an action to foreclose on a mortgage has been served.
A lender found by the municipal court of the municipality in which the property is located, or by any other court of competent jurisdiction, to be in violation of the requirement to correct a care, maintenance, security, or upkeep violation cited in a notice issued pursuant to the ordinance will be subject to a fine of $1,500 for each day of the violation. Any fines imposed pursuant to this requirement will commence 31 days following receipt of the notice, except if the violation presents an imminent risk to public health and safety, in which case any fines will commence 11 days following receipt of the notice.
No less than 20 percent of any money collected will be utilized by the municipality for municipal code enforcement purposes.
A lender serving a summons and complaint in an action to foreclose on a mortgage on residential property in New Jersey must, within 10 days of serving the summons and complaint, notify the municipal clerk of the municipality in which the property is located that a summons and complaint in an action to foreclose on a mortgage has been filed against the subject property. The notice must contain the name and contact information for the representative of the lender who is responsible for receiving complaints of property maintenance and code violations, may contain information about more than one property, and must be provided by mail or electronic communication, at the discretion of the municipal clerk. In the event the lender that has served a summons and complaint in an action to foreclose on a residential property is located out-of-State, the notice must now also contain the full name and contact information of an in-State representative or agent who will be responsible for the care, maintenance, security, and upkeep of the exterior of the property if it becomes vacant and abandoned.
If the owner of a residential property vacates or abandons any property on which a foreclosure proceeding has been initiated or if a residential property becomes vacant at any point subsequent to the lender’s filing the summons and complaint in an action to foreclose on a mortgage against the subject property, but prior to vesting of title in the lender or any other third party, and the exterior of the property is found to be a nuisance or in violation of any applicable State or local code, the local public officer, municipal clerk, or other authorized municipal official must notify the lender or the representative or agent of an out-of-State lender, as applicable, which will have the responsibility to abate the nuisance or correct the violation in the same manner and to the same extent as the title owner of the property, to such standard or specification as may be required by State law or municipal ordinance. The municipality must include a description of the conditions that gave rise to the violation with the notice of violation and must provide a period of not less than 30 days from the lender’s receipt of the notice for the lender to remedy the violation. If the lender fails to remedy the violation within that time period, the municipality may impose penalties allowed for the violation of municipal ordinances.
For the purposes of this law, “vacant and abandoned” residential property means residential real estate with respect to which the lender proves, by clear and convincing evidence, that the mortgaged real estate is vacant and has been abandoned or where a notice of violation has been issued pursuant to this law. Where a notice of violation has not been issued pursuant to this law, real property will be deemed “vacant and abandoned” if the court finds that the mortgaged property is not occupied by a mortgagor or tenant as evidenced by a lease agreement entered into prior to the service of a notice of intention to commence foreclosure according to the “Fair Foreclosure Act,” and at least two of the following conditions exist:
(1) overgrown or neglected vegetation;
(2) the accumulation of newspapers, circulars, flyers or mail on the property;
(3) disconnected gas, electric, or water utility services to the property;
(4) the accumulation of hazardous, noxious, or unhealthy substances or materials on the property;
(5) the accumulation of junk, litter, trash or debris on the property;
(6) the absence of window treatments such as blinds, curtains or shutters;
(7) the absence of furnishings and personal items;
(8) statements of neighbors, delivery persons, or government employees indicating that the residence is vacant and abandoned;
(9) windows or entrances to the property that are boarded up or closed off or multiple window panes that are damaged, broken and unrepaired;
(10) doors to the property that are smashed through, broken off, unhinged, or continuously unlocked;
(11) a risk to the health, safety or welfare of the public, or any adjoining or adjacent property owners, exists due to acts of vandalism, loitering, criminal conduct, or the physical destruction or deterioration of the property;
(12) an uncorrected violation of a municipal building, housing, or similar code during the preceding year, or an order by municipal authorities declaring the property to be unfit for occupancy and to remain vacant and unoccupied;
(13) the mortgagee or other authorized party has secured or winterized the property due to the property being deemed vacant and unprotected or in danger of freezing;
(14) a written statement issued by any mortgagor expressing the clear intent of all mortgagors to abandon the property;
(15) any other reasonable indicia of abandonment.