The New Jersey legislature recently revised the statute of limitations for foreclosures, amended its laws related to common interest associations regarding the recording of liens for unpaid assessments, amended its laws related to residential mortgage lending, all effective April 29, 2019.  In addition, the legislature amended its related to foreclosure and abandoned properties, effective May 29, 2019.

New Jersey Assembly Bill 5001

The amendment provides that a foreclosure may not be commenced following the earliest of:

• Six years from the date fixed for the making of the last payment;
• Thirty-six years from the date of recording of the mortgage; or
• Six years from the date on which the debtor defaulted (previously 20 years).

NEW JERSEY ASSEMBLY BILL 5002

All common interest community associations, other than cooperatives, may now record a lien for unpaid assessments and provide a limited priority over prior recorded mortgages and other liens. 

Homeowners associations are now eligible for lien priority for unpaid assessments (previously only condominium associations were eligible).  Associations will be able to renew their 6-month aggregate assessment liens once per year for each year the property is in foreclosure.  They will not have priority over municipal liens or federal tax liens, however.

While these liens may include any late fees, fines, expenses, or reasonable attorney’s fees imposed or incurred in the collection of the unpaid assessment, only the unpaid assessments will have priority over other liens. 

NEW JERSEY SENATE BILL 3416

The amendments clarify that the New Jersey Residential Mortgage Lending Act also applies to residential mortgage lenders, residential mortgage brokers, mortgage loan originators, and other persons that are located out-of-state, provided they are otherwise required to be licensed pursuant to the provisions of the act in that state.

If the lender intends to accelerate the maturity of any residential mortgage obligation and commence any foreclosure action, the lender must give the borrower notice of such intention at least 30 days in advance of such action.  This notice must now include a statement indicating that the lender is either licensed in accordance with the New Jersey Residential Mortgage Lending Act or exempt from licensure under the act.

NEW JERSEY SENATE BILL 3413

The law now states that the sheriff must sell the property within 90 days of the sheriff’s receipt of a court-ordered foreclosure judgment if:

• The court makes a finding in the foreclosure judgment that the property is vacant and abandoned; or
• The court issues an order directing the sheriff to sell the property within 90 days.

If the court does not make a finding that the property is vacant and abandoned, a foreclosing plaintiff may make application to the court for the property to be sold by the sheriff within 90 days of the date of application.  The application must include a certification that the mortgage real estate is vacant and abandoned.