New Foreclosure Rules In New Jersey Concerning the Foreclosure of Vacant and Abandoned Properties

By: Daniel A. Cozzi

On July 22, 2014 the Supreme Court of New Jersey adopted amendments to the Rules Governing the Courts of the State of New Jersey. The majority of the amendments became effective on September 1, 2014, the remaining amendments take effect on January 1, 2015. Among the amendments is a new rule governing the foreclosure of vacant properties, N.J. Rule 4:64-1A, “Foreclosure of Vacant and Abandoned Residential Property.” A full copy of the new rules and amendments can be found Here. Rule 4:64-1A sets out the rules and requirements for summary foreclosure of vacant and abandoned property.

In order to proceed summarily the mortgagee must file a Verified Complaint and Order to Show Cause which establish the vacancy of the property. Vacant and abandoned properties are defined by N.J.S.A. 2A:50-73. Real property shall be deemed “vacant and abandoned” if:

The court finds that the mortgage property is not occupied by a mortgagor or tenant as evidenced by a lease agreement entered into prior to the notice of intention to commence foreclosure … 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.

N.J.S.A. 2A:50-73. Additionally, a residential property shall not be considered “vacant and abandoned” if, on the property:

(1) there is an unoccupied building which is undergoing construction, renovation, or rehabilitation that is proceeding diligently to completion, and the building is in compliance with all applicable ordinances, codes, regulations, and statutes;
(2) there is a building occupied on a seasonal basis, but otherwise secure; or
(3) there is a building that is secure, but is the subject of a probate action, action to quiet title, or other ownership dispute.

Id.

An important provision of the new rule is the procedure for the Entry of Judgment. If the court determines that residential property is vacant and abandoned as established by N.J.S.A. 2A:50-73, the court may enter final judgment on the return date of the Order to Show Cause. Rule 4:64-1A(c)(3). Ordinarily, an application for final judgment in uncontested matters must be made, “on motion with 10 days notice if there are no other encumbrancers and on 30 days notice if there are other encumbrancers.” Rule 4:64-1(d)(2).

In addition to N.J. Rule 4:64-1A, several other New Jersey Rules have been enacted or amended. Any party interested in Consumer Finance Litigation should review the changes to Rules 4:64-1 (Foreclosure Complaint, Uncontested Judgment Other Than In Rem Tax Foreclosures); 4:64-2 (Proof; Affidavit) and 4:64-9 (Motions in Uncontested Matters).

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