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Kanter v. Szczepanik

A-2755-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

TAX SALES; INTERVENORS — An intervenor, as a contract purchaser, holds an equitable interest in a property under tax sale foreclosure even if the intervenor has not completed the transaction at the time that the foreclosure action has been filed.

A buyer who purchased a tax sale certificate for unpaid taxes from a municipality sought to foreclose on the property. The property owners both had passed away and the property had been vacant for roughly six years at the time the buyer purchased the certificate. In his foreclosure action, the buyer included the property owners’ five children. The property owners’ estate entered into a purchase contract with an intervenor who offered her more than double the amount that was required for the redemption of the property. Both the estate and the intervenor filed motions for a stay of the final judgment of foreclosure and for the intervenor to join the proceedings. The buyer sought a final judgment of foreclosure. The lower court found that the intervenor had no legal interest in the property and granted the buyer’s request for an entry of final judgment. A motion by the intervenor and the estate for reconsideration was denied.

On appeal, the Appellate Division noted that third-party investors are allowed to redeem a tax sale certificate if their motion to join the proceedings is timely and if the owner of a property is to receive more than nominal consideration for the property interest. It rejected the buyer’s argument that third-party investors are only allowed to intervene in a foreclosure action if they are contract purchasers who have not completed the transaction at the time the foreclosure action is filed. The Court found that the intervenor, as a contract purchaser, held an equitable interest in the property, and had requested to join the proceedings prior to the entry of final judgment. Thus, the lower court’s decision was reversed and remanded for a determination as to whether the amount offered by the intervenor to the estate was more than nominal consideration.


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