We have become aware of a new trend regarding municipal fees being assessed against vacant properties during foreclosure. On July 14, 2014, N.J.S.A. 46:10B-51 was amended to allow municipalities to enact local ordinances that impose penalties on mortgage lenders who fail to remedy municipal ordinance violations on vacant or abandoned property during a foreclosure action. In addition, the amended law allows municipalities to use public funds to abate a nuisance or correct a violation on residential property for which the lender was given notice. The municipality can place a lien on the property if these funds are not paid back.
We have learned that several municipalities in New Jersey have either proposed or are considering proposing local ordinances in accordance with N.J.S.A 46:10B-51 to enforce penalties against lenders. Accordingly, if you are dealing with a property that has gone through foreclosure, you should contact the municipality to inquire about any vacant property fees. Some vendors are now including notes regarding vacant property fees as part of their tax search products. As mentioned above, any fees associated with public funds being used to resolve a violation can become a lien on the property and must be resolved.
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