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Garden State Investment v. Zaleski

A-3095-09T2 (N.J. Super. App. Div. 2010) (Unpublished)

TAX SALES — After two years, no evidence will be permitted to rebut the presumption that a tax sales certificate had been validly issued.

A property owner failed to pay taxes for a given tax year. A tax lien investor purchased the corresponding tax sale certificate at public auction, and paid all subsequent taxes. The investor then instituted a tax lien foreclosure action more than twenty-four months after it had purchased the lien. It was served on the owner of property one month later. The owner filed a contesting answer, asserting that the sale certificate and tax were both invalid because the investor’s check used to pay for the delinquent taxes, interest, and costs was dated two days before the public auction, and was not in the form of a certified check or a cashier’s check as purportedly required by the notice to bidders. The lower court rejected that argument, ruling that it did not matter how the municipality was paid so long as it was paid, which was evidenced by the issuance of the tax sale certificate itself. The lower court deemed the contesting answer non-contesting, and returned the matter to the foreclosure unit as an uncontested foreclosure.

On appeal, the Appellate Division affirmed, finding that the owner was precluded under law from challenging the tax sale certificate’s validity, as the law makes clear that, after two years, no evidence will be permitted to rebut the presumption that a tax sale certificate had been validly issued. On the merits, the Court said that the check’s date of two days prior to the public auction did not translate into fraud, especially so in view of the fact that the investor’s representative certified that he personally attended the auction and was the successful bidder. The owner did not challenge the validity of the certificate when it was initially issued nor within two years of its issuance. By waiting more than two years, the owner was obligated to overcome the statutory presumption and had failed to do so.

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