An Overview of the Multifamily Housing Preservation and Receivership Act Briefly summarized, if an occupied residential building meets certain conditions under the act, the court may appoint a receiver to both operate and restore the property. Pay or deposit with the court all funds needed to meet the obligations of the receivership. In contrast to the all comers approach of the general tax sale, the special tax sale is designed to ensure that tax liens on abandoned properties end up in the hands of entities that are actively committed to taking title to the properties and reusing them in ways consistent with the public interest. A property information system typically includes the following information: Property ownership, including municipal ownership Assessed valuation Tax delinquency and tax liens Other municipal liens Code violations and nuisance abatement activity Additional useful and generally obtainable information can include: Utility shut-off notices Real estate transactions Criminal activity Fires Property-specific data can be overlaid with Census data, in order to link property information with demographic and economic information about the population within the area. (The owner can also get a property removed from the list by restoring the property to sound condition or making a firm commitment to do so. Procedures for creating and maintaining an abandoned property list The legal instrument known as an abandoned property list was first established in New Jersey law by the 1996 Urban Redevelopment Act (P.L.1996, c.62). A municipality can take properties on an abandoned property list that are also eligible for tax sale under N.J.S.A. 14 Effect of foreclosure actions Neither filing of a complaint nor the appointment of a receiver stay the filing or continuation of any action to foreclose a mortgage or lien on the building or sell the property for delinquent taxes or unpaid municipal liens. Before discussing specific tools, however, it is important to place the issue in context. 79 in For further information, go to HYPERLINK "http://www.nhi.org" www.nhi.org. ; . The ability to grant such a period, and the length of the period, are at the discretion of the public officer. The municipality may want to do that if it has highly qualified legal staff, particularly if it believes - based on the particular facts of a specific building - that the owner is likely to step forward and rehabilitate the building herself. Owner-occupied one to four family dwellings are not subject to the provisions of the act. The owner is given 60 days from the filing of the complaint to submit a plan to the court. Additional costs can undermine financial projections and jeopardize the financial feasibility of the receivership. Every municipality should have a boarding protocol, specifying how it will take responsibility for boarding not only city-owned properties, but also privately owned properties, either in case of emergency or where notice has been given the owner. The mailed notice must contain the factual basis for the finding that the building is abandoned property, and the information relied on for that finding. Sec. New Jersey's Unclaimed Property Administration Returns Record $202.9M in Assets in FY23. ), evidence of financial capability, or other relevant information. The families who may be willing to put their money into fixing up scattered abandoned houses where the other houses around them are in good condition will not put money into a similar house if it is on a block where half or more of the structures are vacant. Rehabilitation may be required of tax certificate purchaser or assignee. WHEREAS, the [name of municipality] contains a number of vacant buildings that have been abandoned by their owners, and that are in a state of disrepair and neglect; and WHEREAS, these buildings, by virtue of their condition and their proximity to other buildings, are diminishing the value of neighboring properties and have a negative effect on the quality of life of adjacent residents and property owners, increasing the risk of property damage through arson and vandalism and discouraging neighborhood stability and revitalization; and WHEREAS, many of these buildings, or the land on which they are situated, can be used for productive purposes, which will further the revitalization of the [name of municipality] and improve its economic and social condition; and WHEREAS, the [name of municipality] desires to use the powers granted local governments under the laws of the State of New Jersey to address the conditions created by these buildings, and further their reuse for productive purposes; and WHEREAS, by creating an abandoned property list, as set forth in Section 36 of P.L.1996, c.62 (C.55:19-55) as amended by Section 28 of P.L.2003, c.210, the municipality will better be able to address the conditions created by these buildings, and further their reuse for productive purposes; NOW, THEREFORE BE IT ORDAINED: (1) The [_____________________________] is hereby directed to identify abandoned properties within the municipality, place said properties on an abandoned property list established as provided in Section 36 of P.L.1996, c.62 (C.55:19-55), as amended by Section 28 of P.L.2003, c.210, and provide such notices and carry out such other tasks as are required to effectuate an abandoned property list as provided by law. Sec. Presumably, the clock would start at the point where the lienholders were notified that the owner was not going to submit a plan, or 60 days from the date of filing the complaint, whichever was sooner. The partners should include one or more qualified receivers, which may be CDCs, but may also be responsible property owners or property management firms within the area. See page ___ below for a possible use of this authority. Such systems can be set up with password protection for confidential information. Upon written request by any interested party, the public officer shall provide the party with at least 20 days' notice of any such hearing. The statute reads no more than six monthsto the anticipated date, but does not set any minimum period, permitting some judgment to be exercised by the entity. The court could potentially join a series of separate proceedings against those buildings into a single action. 2A:50-74, and NJ Court Rule 4:64-1B), Reinstatement (Restart) of a Foreclosure Action (N.J.S.A. Any interested party may participate in any redetermination hearing held by the public officer pursuant to subsection e. of section 36 of P.L.1996, c.62 (C.55:19-55). The best detailed analysis is that by John M. Payne, A Survey of New Jersey Eminent Domain Law, Rutgers Law Review, Vol.30, no.5 (1977). While state law does not give municipalities explicit authority to enact ordinances imposing fees or other obligations on property owners to address nuisance conditions, the Ridgefield decision indicates that such ordinances may be found to be within the municipal police power. This phrase appears repeatedly, in slightly different contexts, in N.J.S.A. The court may authorize the receiver to sell the property free and clear of liens or other encumbrances, with lienholders to receive the proceeds of sale in order of priority set forth in Sec. Within 30 days of receipt of any such request, the public officer shall provide a written response to the party, either indicating that the property will be added to the list of abandoned properties or, if not, the reasons for not adding the property to the list. Nowhere is that more important than with respect to abandoned properties. The court may remove the receiver on a showing that the receiver is not carrying out its responsibilities under the law. 55:19-83 Property not to be placed on abandoned property list; conditions. While this guidebook is not a detailed guide to developing and implementing an abandoned property strategy, it is appropriate to close the guidebook with an overview of the key elements in this process. Immediately with enactment of a vacant property list ordinance, or even before, the public officer should initiate a database containing information about properties known to be vacant, including the earliest date at which the vacant status of the property is documented. Delays in the court process involving tax foreclosure are common. A consultative process to review and prioritize non-emergency demolitions. Once acquired, the property can be reconveyed to another party for the purpose of clearance, development, redevelopment or repair. If an entity other than the municipality has purchased or taken assignment from the municipality of a tax sale certificate on a property that has not been legally occupied for a period of six months, that property shall not be placed on the abandoned property list pursuant to section 36 of P.L.1996, c.62 (C.55:19 . Step 3: For those properties, municipal officials, again in consultation with CDCs and other interested parties, should develop the conditions, requirements and bid packages that will be used for the special tax sale. There is nothing to suggest that the act requires that the subsequent use of the property be subject to formal procedures such as income certification of potential tenants or controls on affordability over time. Failure to follow through on that commitment will at a minimum be embarrassing for both the municipality and the rehabilitation entity, but may also hasten the loss of the building, and, depending on the circumstances, potentially raise the possibility of a claim for damages by the owner. Participants in demolition decision should include, in addition to the building inspector: Housing & development, community development, or neighborhood revitalization staff Historic preservation officer or commission member Representatives of neighborhood councils or similar bodies from the area in which the building is located. Sec. If a municipality wants to preserve an abandoned apartment building, for example, that has a very low as is fair market value, particularly under the appraisal guidelines of N.J.S.A.55:19-102, it may be better off pursuing spot blight eminent domain, in order to take the property and then reconvey it to a CDC or other qualified entity for rehabilitation. The public officer must publish the list and provide notice to owners A notice containing information about the properties on the list must be published in the municipalitys official newspaper, and sent by certified and regular mail to the owner of record within 10 days after publication. LSNJ is a 501(c)(3) nonprofit offering free civil legal assistance to low-income people in New Jersey. The bond must remain in place for at least five years. While most prevalent in urban areas, abandoned properties are also found in many suburban and rural areas. Sec. Step 6 The owner is given the opportunity to submit a plan for rehabilitation and reuse of property. APPENDIX 2 OVERVIEW OF THE MULTIFAMILY HOUSING PRESERVATION AND RECEIVERSHIP ACT, P.L.2003, C.295 The following is an overview of the principal provisions of P.L.2003, c.295 as enacted by the New Jersey Legislature and signed by Governor McGreevey on January 15, 2004. Second, even if the cost is reasonable, the public officer needs to have a source of funds that can be speedily accessed to carry out the repairs. Neighborhood organizations and block groups need to understand the nuisance abatement laws, so that they can effectively press city government to take action to address nuisance conditions in their communities. 32 Amendments to the Tax Sale Law expanding rights of tax lien purchasers The law amends the Tax Sale Act, R.S.54:5-86 to enhance the powers of entities other than the municipality holding tax liens (tax sale certificates) on abandoned properties. For that reason, whenever the public officer issues an order to an owner, she must recognize that there is a significant likelihood that she may have to act to remedy the nuisance. Technically, it is not the highest bidder, because the bidding is based on the interest rate that the tax lien buyer will be eligible to receive on payments from the property owner. When you're tight on space, every square foot matters. To facilitate enforcement and aggressive foreclosure of nuisance liens. Abandoned Property Reporting Form Street address: ________________________________________________________________________ IF KNOWN, tax block: ________________ Lot: ______________ PROPERTY TYPE: __SFDET __SFTWIN __SFROW __MF __COM __R/NR MIX __IND __OTHER DESCRIPTION: ______________________________________________________________________________ _____________________________________________________________________________________________ IF KNOWN, how long has property been vacant? 17 of the act. By tackling the scattered abandoned buildings that are found in many transitional or at-risk areas, a CDC can make a major contribution to stabilizing the entire block or neighborhood. Under a special tax sale, the municipality can set qualifications and performance requirements for bidders, in order to ensure that the properties go to entities that will reuse them in a manner consistent with the public interest (N.J.S.A.55:19-101). An excellent guidebook for anyone involved in maintaining or improving vacant lots is Reclaiming Vacant Lots: A Philadelphia Green Guide (2002), published by the Pennsylvania Horticultural Society. A qualified entity which may be appointed as a receiver is defined, and is further subject to registration with the Department of Community Affairs. The city ordinance governing demolitions, whether conducted by contractors on behalf of the city or by private property owners, should specify the following: Removal of all demolition debris from the site. The public officer must also file a copy of the notice with the county clerk or register of deeds and mortgages, as applicable, which has the effect of a filing of a notice of lis pendens. Particularly in cities with large numbers of abandoned properties, the process of gaining control of them and turning them into productive assets is a long-term one, taking many years. The court may also appoint the receiver or other qualified entity to monitor the owners operation and maintenance of the property, and reinstate the receivership in the event that the owner fails to carry out any of the conditions of reinstatement (N.J.S.A.2A:42-139). If the building meets any one of the nuisance criteria, the public officer can find that it is abandoned property. Abandonment of commercial or retail property is largely a function of shifts in consumer preferences and buying power, as well as the rise of the automobile, leading to an inability of owners to find tenants for retail properties. Houses - Abandoned (1 Link Inside), Hancock House of Hancocks Bridge, NJ Sec. The complaint must be supported by findings (1) that the property is abandoned, and (2) that it should be rehabilitated, as described above on page __. Where there is a compelling reason to pick one or the other alternative, the appraiser can analyze that alternative alone. While the public officer can be any officer, officers, board or body of the municipality, given the nature of the public officers duties, the municipality will probably find it more efficient to designate a specific officer to serve in that role, rather than a board or agency. This is particularly important, because if the legal proceeding is contested by the owner or by a lienholder, there may be an extended period before the entity bringing the complaint receives the order of possession it is seeking.

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