TRENTON, NJ — Governor Phil Murphy has signed Bill A3772 into law, sponsored by Assembly members Barbara McCann Stamato, William B. Sampson, and Yvonne Lopez. This new law, effective immediately, aims to protect property owners facing foreclosure due to tax liens.
The legislation aligns with New Jersey’s tax law following the 2023 U.S. Supreme Court decision in Tyler v Hennepin County, Minnesota. The ruling clarified that counties cannot retain equity in a property beyond what is owed for overdue taxes and interest.
Under A3772, property owners or their heirs undergoing tax lien foreclosure can request a public sale. If the property sells for more than the unpaid taxes, the homeowners are entitled to any surplus equity.
When initiating a foreclosure complaint, the lienholder must notify property owners of their right to request either a judicial sale or an internet auction. However, abandoned properties are exempt from this requirement, and the New Jersey Superior Court can prevent claims to surplus equity during foreclosure auctions.
“I am proud that Governor Murphy has signed my first bill, A3772, into law,” said Assemblywoman Stamato. “This legislation updates our tax sale law from 1918, safeguarding distressed property owners by allowing sheriff sales up until final judgment, with exceptions for abandoned properties. It also ensures municipalities can conduct foreclosures in line with the Tyler decision.”
Assemblywoman Lopez added, “The signing of A3772 is a win for both property owners and municipalities. Property owners will now receive the protections guaranteed by the Tyler decision, while municipalities gain certainty through the new system of tax lien sales that supports their annual budgets.”