A794 1R

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 ¹[50] 45¹ or greater, as determined by the Department of Community Affairs. ¹A municipality shall be considered distressed for a period of three years after receiving a distress score of 45 or greater, regardless of if the municipality falls below a score of 45 within that three-year period.¹

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.

¹ d. Nothing in this section is intended to supersede or limit a summary action to foreclose mortgages on vacant and abandoned properties pursuant to section 1 of P.L. 2012, c.70 (C.2A:50-73) or the "New Jersey Foreclosure Fairness Act," P.L.2009, c.296 (C.2A:50-69 et seq.).¹

¹4. a. If a distressed municipality seeks to purchase a property for real market value by exercising the distressed municipality's power of eminent domain pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), the municipality shall post its intention to exercise this power in the official newspaper of the municipality or on the municipality’s Internet website, which publication shall constitute public notice and, within 10 days after publication, shall send a notice, by certified mail, return receipt requested, and by regular mail, to the owner of record of the vacant or abandoned property. The published and mailed notices shall identify property determined to be vacant or abandoned setting forth the owner of record, if known, the tax lot and block number and street address. The municipality, in consultation with the tax collector, shall also send out a notice by regular mail to any mortgagee, servicing organization, or property tax processing organization that receives a duplicate copy of the tax bill pursuant to subsection d. of R.S.54:4-64. When the owner of record is not known for a particular property and cannot be ascertained by the exercise of reasonable diligence by the tax collector, notice shall not be mailed but instead shall be posted on the property in the manner as provided in section 5 of P.L.1942, c.112 (C.40:48-2.7). The mailed notice shall indicate the factual basis for the municipality's finding that the property is vacant or abandoned property as that term is defined in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) specifying the information relied upon in making such finding. The notice shall be indexed by the name of the owner as defendant and the name of the municipality as plaintiff, as though an action had been commenced by the municipality against the owner.

b. An owner or lienholder may challenge the determination of their property as vacant or abandoned pursuant to subsection a. of this section by appealing that determination to the municipality within 30 days of receipt of certified notice or 40 days from the date upon which the notice was sent. An owner whose identity was not known to the municipality shall have 40 days from the date upon which notice was published or posted, whichever is later, to challenge the determination of their property as vacant or abandoned property. A property be presumed to be vacant or abandoned property unless the owner, through the submission of an affidavit or certification by the property owner, can demonstrate that the property is not vacant or abandoned by remediating conditions or by showing intent to remediate the conditions that caused the property to be determined as vacant or abandoned.

c. If within 30 days of receipt of certified notice the owner has remediated conditions that caused the property to be determined vacant or abandoned, or if in the municipality’s good faith determination has taken action indicative of intention to remediate, the real property shall not be considered vacant or abandoned.¹

¹[4.] 5.¹ This act shall take effect immediately.