December 29, 2021

New Jersey Appellate Division Holds Purchaser of Property in Tax Sale Foreclosure Can Intervene Before Order Setting Redemption Date

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In a decision approved for publication, New Jersey's Appellate Division recently affirmed that a purchaser of a property in a tax sale foreclosure can move to intervene and redeem the property so long as the trial court has not entered an order setting the last date for redemption, and that a previously rejected attempt to redeem the property before intervening does not bar the right to move to intervene.  See Green Knight Capital, LLC, v. Calederon, et al., 2021 WL 4823495 (N.J. Super. Ct. App. Div. Oct. 18, 2021).  In April 2020, plaintiff initiated a tax sale foreclosure.  In September 2020, defendant purchased the property from the property owner for $100,000.  Defendant immediately sent a check to the tax collector to redeem the certificate held by plaintiff, but plaintiff told the collector to reject it because defendant had not intervened in the foreclosure action.  Plaintiff then moved for an order setting the time, place, and amount of redemption.  Two weeks later, and before the Court had addressed plaintiff's first motion, plaintiff filed another motion seeking to bar defendant from redemption.  Defendant cross-moved to intervene and permit redemption.  The trial court ultimately ruled for defendant, and plaintiff appealed, arguing that defendant's attempt to redeem before intervening barred its later motion to intervene and redeem under Simon v. Cronecker, 189 N.J. 304 (2007), among others.

On appeal, the Appellate Division affirmed.  The Court found that defendant filed its motion to intervene before the trial court had entered an order setting the last date for redemption.  Accordingly, the motion was timely filed, regardless of the fact that defendant had attempted to redeem before it moved to intervene.  Further, the Court found that the cases cited by plaintiff involved parties attempting to intervene after the court had set the last date for redemption, which were distinguishable from this situation and did not apply.  "We hold that when an investor has an interest in the property in foreclosure, is prepared to redeem the tax sale certificate, and files a motion to intervene in the foreclosure action before the entry of an order setting the last date for redemption, the investor is permitted to intervene and redeem the tax certificate." 

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