A794

An Act concerning acquisition of certain real property by certain distressed municipalities, including procedures for determination and payment of fair market value, and supplementing P.L.1971, c.361 (C.20:3-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. Vacant and abandoned properties create a greater risk of blight and can create a wide range of problems for the communities in which they are located. These problems can include fostering criminal activity, creating public health problems, depressing neighboring property values, reducing revenues for municipalities, and otherwise diminishing the quality of life for residents and business operators in those areas.

b. While the "Abandoned Properties Rehabilitation Act," P.L.2003, c.210 (C.55:19-78 et seq.), the "tax sale law," R.S.54:5-1 et seq., and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), enable a municipality to obtain title to real property that is abandoned, vacant, or subject to unpaid taxes, the difficulty of proving abandonment or vacancy, and the costs associated with obtaining title, pursuant to such laws, and the debt owed on the real property to the municipality, often outweighs the value of the property itself.

c. Therefore, it is necessary, and shall constitute a public purpose, to enact legislation enabling a municipality to obtain title to vacant and abandoned property or otherwise retain the property for sale or other transfer, which would allow municipalities to more easily sell or restore these properties, improve the public health, raise neighboring property values, increase municipal revenue, and increase the quality of life for residents and businesses in the municipality.

2. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Abandoned" or "vacant" means, with respect to real property:

(1) that at least four of the following conditions exist with respect to the property:

(a) overgrown or neglected vegetation;

(b) the accumulation of newspapers, circulars, flyers, or mail on the property;

(d) the accumulation of hazardous, noxious, or unhealthy substances or materials on the property;

(e) the accumulation of junk, litter, trash, or debris on the property;

(f) the absence of window treatments such as blinds, curtains, or shutters;

(g) the absence of furnishings and personal items;

(h) statements of neighbors, delivery persons, representatives of an association of a planned real estate development, or government employees indicating that the residence is vacant and abandoned;

(i) windows or entrances to the property that are boarded up or closed off or multiple window panes that are damaged, broken, and unrepaired;

(j) doors to the property that are smashed through, broken off, unhinged, or continuously unlocked;

(k) a risk to the health, safety, or welfare of the public, or any adjoining or adjacent property owners, exists due to acts of vandalism, loitering, criminal conduct, or the physical destruction or deterioration of the property;

(l) an uncorrected violation of a municipal building, housing, or similar code during the preceding year, or an order by municipal authorities declaring the property to be unfit for occupancy and to remain vacant and unoccupied;

(m) a written statement issued by the most recent owner expressing a clear intent to abandon the property; or

(n) any other reasonable indicia of abandonment.

(2) Real property shall not be considered "abandoned" or "vacant," if at least one of the following conditions exists on the property:

(a) a building is unoccupied, which is undergoing construction, renovation, or rehabilitation that is proceeding diligently to completion, and the building is in compliance with all applicable ordinances, codes, regulations, and statutes;

(b) a building is occupied on a seasonal basis, but otherwise secure; or

"Distressed municipality" means a municipality that has a municipal revitalization index distress score of 50 or greater, as determined by the Department of Community Affairs.

3. a. Notwithstanding any other provision of the "Abandoned Properties Rehabilitation Act," P.L.2003, c.210 (C.55:19-78 et seq.), the "tax sale law," R.S.54:5-1 et seq., and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), a distressed municipality may, for real property that is vacant, abandoned, or subject to unpaid taxes pursuant to R.S.54:5-6, in lieu of acquiring title to the real property pursuant to the "Abandoned Properties Rehabilitation Act," P.L.2003, c.210 (C.55:19-78 et seq.), the "tax sale law," R.S.54:5-1 et seq., or the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.), either: purchase the property by paying the property owner the fair market value of the property; or exercise the municipality’s power of eminent domain and acquire the real property that is vacant, abandoned, or subject to unpaid taxes, pursuant to the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.).

b. For real property acquired by a distressed municipality pursuant to subsection a. of this section, a distressed municipality may subtract the amount of any unpaid taxes and municipal liens from the amount the distressed municipality would otherwise be required to pay to the owner of the real property in compensation.

c. If a distressed municipality is unable, after making good faith and diligent efforts, to locate the owner of real property subject to municipal action pursuant to subsection a. of this section, the distressed municipality shall hold the amount of compensation owed and payable to the real property owner in trust for one year, as required of governmental entities pursuant to R.S.46:30B-41.2, after which period of time that amount shall be presumed abandoned and handled in accordance with the "Uniform Unclaimed Property Act," R.S.46:30B-1 et seq.

4. This act shall take effect immediately.

STATEMENT

This bill permits a distressed municipality to obtain title to real property that is vacant, abandoned, or subject to unpaid taxes by purchasing the property for the fair market value, or by exercising the municipality’s power of eminent domain and acquiring title to the real property pursuant to the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.), in lieu of acquiring title to the real property pursuant to the "Abandoned Properties Rehabilitation Act," (APRA) P.L.2003, c.210 (C.55:19-78 et seq.), the "tax sale law," R.S.54:5-1 et seq., and the In Rem Tax Foreclosure Act (1948), P.L.1948, c.96 (C.54:5-104.29 et seq.). The bill defines a "distressed municipality" as a municipality with a municipal revitalization index distress score of 50 or greater.

The bill further specifies, for real property acquired by a distressed municipality pursuant to the bill, the municipality is permitted to subtract the amount of any unpaid taxes and municipal liens from the amount the municipality would otherwise be required to pay to the owner of the real property in compensation. Additionally, the bill imposes certain requirement on a distressed municipality if the municipality is unable, after making good faith and diligent efforts, to locate the owner of real property subject to municipal action pursuant to the bill.

The bill provides a different definition of the terms "abandoned" or "vacant" than is provided in the APRA. Under the bill, the terms "abandoned" or "vacant" means real property that exhibits at least four of 14 qualifiers indicating abandonment or vacancy, as specified in the bill.

The bill provides that real property is not "abandoned" or "vacant" if, on the property:

§ there exists an unoccupied building, which is undergoing construction, renovation, or rehabilitation that is proceeding diligently to completion, and the building is in compliance with all applicable ordinances, codes, regulations, and statutes;

§ there is a building occupied on a seasonal basis, but otherwise secure; or

§ there is a building that is secure, but is the subject of a probate action, action to quiet title, or other ownership dispute.