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JLR, LLC v. AOM, Inc.

F-7016-04 (N.J. Super. Ch. Div. 2004) (Unpublished)

TAXATION; TAX SALES—Absent fraud specifically pleaded, no evidence can be admitted to challenge a tax sales certificate more than two years after it is issued.

A property owner failed to pay property taxes. A tax sale certificate was issued. The certificate went unredeemed for two years and the holder foreclosed. The property owner then filed an answer. The certificate holder argued that absent fraud, the owner’s answer was time-barred because two years had passed since the certificate of sale had been recorded. The owner responded that it never received notice of a tax certificate sale. Furthermore, it claimed that all of the taxes had been paid on the property.

Pursuant to N.J.S.A. 54:5-52, absent fraud, no evidence can be admitted to contest the validity of a tax sale certificate more than two years after the certificate has been recorded. After then, a tax sale certificate can only be challenged for fraud. Here, the only evidence produced by the owner was its own testimony that, to the best of its knowledge, it had never received notice of the tax sale and had paid all of the property taxes. The owner also alleged that the sale “may have” been procured through fraud because the property was used to provide health services and abortion procedures. Although the owner alleged that fraud may have taken place, the Court concluded that it did not provided the kind of specific facts that are required by Court Rule 4:46-5 to support a contention of fraud. Therefore, because the owner waited more than two years to attack the validity of the tax sale and had not alleged specific facts of fraud, the Court granted the certificate holder’s motion to strike the owner’s answer and deemed the action uncontested.

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