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M Credit IV v. Tweedle

A-5073-08T3 (N.J. Super. App. Div. 2011) (Unpublished)

TAX CERTIFICATES; FORECLOSURE — Where a court extends a tax sale foreclosure redemption date based upon a representation from the property owner that it has available redemption funds, it is well within the discretion of that court to decline to further extend the redemption date on the grounds that the property owner has yet to obtain use of those funds.

The holder of a tax sale certificates filed a tax foreclosure complaint. The property had been sold by the alleged son of the deceased owners. The buyer was aware of the tax lien. The holder, however, was not aware of the death of the property owners because their estates were never probated. Also, it was not aware of the transfer of title. Accordingly, the holder failed to join the buyer in its tax foreclosure complaint. It subsequently obtained a final judgment of foreclosure.

Prior to completion of the foreclosure action, the buyer apparently again resold the property, setting aside significant escrows to pay outstanding liens, including those of the holder’s tax sale certificates. The buyer was unsuccessful in redeeming the certificates because of the foreclosure judgment. So, it moved to vacate that judgment. The holder opposed, but ultimately acceded, provided that the court fix a date for redemption. The lower court set a redemption date for six weeks after entry of the order. If redemption did not take place, the holder would be permitted to apply to the foreclosure unit for an entry of final judgment with prejudice.

The buyer moved to extend the redemption date, but the court said “no.” It ruled that the buyer had long represented that redemption funds were available. Therefore, the equities did not merit a further extension of the redemption date.

The buyer appealed, but the Appellate Division affirmed the lower court’s ruling and subsequent denial, finding the lower court had properly balanced the equities of the case and acted well within its discretion in declining to further extend the redemption date. It held that, as a practical matter, the buyer did not have a basis for appealing the denial, it had the funds to redeem, but the holder did not yet have use of those funds.

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