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Expert Interview on New Jersey Tax Liens with Deborah Feldstein

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Tax Sale Resources
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Click here to download the full white paper review from the law office of Pellegrino & Feldstein.

Introduction

New Jersey differs in several ways from other tax certificate processes across the country.  The biggest difference from most states is that it collects taxes at the municipal level only.  This means that all tax sales are held at the city level and there are 565 cities each holding up to 2 sales per year.  It’s one of the biggest markets in the country.  Michael Pellegrino and Ralph Allocca write a full statutory review of the tax certificate process in their white paper.  Then, Deborah Feldstein also explains the process in the video above.

Interview Summary

Here are the finer points in the New Jersey tax certificate process to consider before participating in the tax sales.

  1. Tax delinquencies are sold once per year by the municipality.  The sale must be publicly advertised in five public places and published in the newspaper that is circulated in the municipality where the property is located at least four times.
  2. An 18% interest rate is possible but this is a bid down state.  
  3. If the interest rate decreases all the way to 0%, then a premium is bid on the property.  These premiums are held and returned if a redemption is made.
  4. If a redemption has not been made in 5 years, the premium is kept by the city.
  5. If a delinquency is not sold, it is then held by the municipality.  The municipality may choose to hold a private sale.
  6. A required recording of the purchased tax certificate must be done within three months of the date of sale.  Then the lien may then be assigned if interested.
  7. Subsequent tax payments can be made on the parcel with a certificate.
  8. The lien is held for two years before a foreclosure can be instituted.  Any party with standing to redeem the tax lien may redeem the lien within the two years.  If the lien is not redeemed within two years a foreclosure action can commence.
  9. There are two types of tax foreclosure proceedings…1) In Personam and 2) In Rem

Conclusion

There are many more important details in the New Jersey Tax Certificate process that you can watch in the video or check out the statutory review.  You can also learn more about the details concerning the bankruptcy practice with tax certificates in the state of New Jersey by Robert Keyser of Taylor & Keyser in his white paper and interview.

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