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D’Angelo v. The City of Jersey City

A-6262-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

MUNICIPALITIES; PUBLIC BIDDING—It is permissible for a municipality to refuse to allow a property owner to bid on adjacent property being offered for sale if the owner is delinquent on the payment of its own property taxes.

Two parties each owned property adjacent to a municipal-owned lot. The municipality offered the lot for sale through public auction. “Under the [municipality’s] guidelines adjacent property owners had a right of first refusal to bid on the property.” The resolution authorizing the auction provided that “persons who were ‘delinquent in the payment of taxes or other municipal charges on any other property which such person shall own in the City,’ were not permitted to bid on City property… .” One of the property owners was not permitted to bid because he was delinquent on his tax payments for his own properties. He also “failed to obtain a required certificate of occupancy after purchasing other property from [the municipality].” The second neighbor brought those facts to the municipality’s attention before bidding and the first neighbor was disqualified.

The disqualified neighbor-bidder appealed on a number of grounds. He admitted that he had a tax delinquency, including outstanding tax certificates on his property. He claimed that “he knew about the lien but contend[ed] he did not think it would preclude him from bidding because the purchaser of the tax certificate would have paid [the municipality] the back taxes.” The Court, however, pointed out that there was no dispute about the delinquency. The bidder was chargeable with knowledge of the outstanding tax lien “and it was his responsibility to redeem it before the date of the auction.” According to the Appellate Division, “[b]eing current on taxes is a legitimate requirement for bidding on [municipality-owned] property. Otherwise, [the municipality] can have no reasonable expectation that the property it is selling will be effectively returned to the tax rolls. ... A property owner who permits his property to fall into tax arrears and allows the property to remain subject to a tax lien may legitimately be considered not to be a ‘responsible’ bidder.”

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