Purpose: To provide guidance and establish requirements for transactions involving vacant and abandoned properties that are subject to possible registration fees imposed by the municipality.
Background: The Abandoned Properties Rehabilitation Act, N.J.S.A. 55:19-78, and N.J.S.A. 55:19-55 permit municipalities to identify and take action against vacant and abandoned properties. Additionally, N.J.S.A. 46:10B-51 requires lenders to notify municipalities when foreclosing against residential properties. Based upon the statutes noted, several municipalities have enacted local ordinances to charge fees, fines and penalties related to vacant and abandoned properties. Despite a lack of statutory authority, certain towns are treating these fees as liens against real property.
Some commercial websites purport to track municipalities that have enacted vacant and abandoned property registration ordinances. We cannot vouch for the accuracy or completeness of the information available from such websites. With that disclaimer in mind, see, for example, https://prochamps.com/Partners.aspx and http://safeguardproperties.com/Resources/Vacant_Property_Registration.aspx.
Standard: If the tax search makes reference to vacant or abandoned property registration fees, fines or penalties, or if the property is being sold by a lender or third-party purchaser out of a foreclosure or deed in lieu of foreclosure that was completed within the last 2 years, the following informational note and requirement will be included in Schedule B, Part I of the commitment (as separate numbered items):
- NOTE FOR INFORMATION: Although beyond the scope of coverage afforded by the Policy, we call your attention to the fact that several municipalities have enacted local ordinances to charge registration fees, fines and penalties related to vacant and abandoned properties. The Company does not insure payment of these fees; nor does the Company insure that the property is or is not affected by these fees; nor is the Company able to give advice or opinions as to the consequences of nonpayment of these fees.
- Proof is required that the vacant or abandoned property registration fees, fines and penalties have been paid. If such proof is not provided, the Policy will contain the following exception: Vacant or abandoned property registration fees, fines and penalties, if any, with respect to the Land.
Consistent with the foregoing, if such proof is not provided, Schedule B of the Policy will contain the following exception:
- Vacant or abandoned property registration fees, fines and penalties, if any, with respect to the Land.