Revises process for property tax lien holder to foreclose right to redeem a property tax lien; allows property owner to protect remaining equity.
The bill is in response to the Supreme Court's decision in Tyler v. Hennepin County, which ruled that excess equity from a tax foreclosure cannot be confiscated from the property owner without compensation. Consequently, under the new procedures established by SB 4142, property owners facing foreclosure will be notified of their right to demand a judicial sale or an Internet auction to potentially allow them to recoup some of their equity. This legal adjustment is aimed at providing more equitable treatment for homeowners while still facilitating the interests of lienholders.
Senate Bill 4142, introduced in New Jersey on November 30, 2023, revises the procedure for property tax lien foreclosures, aligning it with a recent Supreme Court ruling. The bill allows property owners to protect their equity when their tax liens are foreclosed, a significant change from current law that often leads to property owners losing all remaining equity. Specifically, the bill amends multiple statutes pertaining to tax sales and foreclosures, particularly enhancing the rights of property owners during the foreclosure process.
Debate around SB 4142 primarily centers on its implications for both property owners and lienholders. Proponents advocate that the bill empowers homeowners and acknowledges their rights under constitutional protections, while critics express concerns about potential complications in the foreclosure process that could hinder municipalities and lien investors. The provisions to allow judicial sales or Internet auctions are seen as a step towards fairness, yet there is ongoing apprehension about how this will affect the financial viability of tax lien investments in the long term.