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M. Credit, Inc. v. Sexton

A-4337-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

TAX SALES; INTERVENORS — A party making a good faith offer to buy a property, albeit a few days after the property owner was served with a notice of a tax sales foreclosure, is entitled to intervene in the proceedings if it is offering the property owner more than nominal consideration and the owner would realize some value from the property.

A tax sale certificate holder filed an in personam tax foreclosure complaint two years after the certificates’s purchase. The complaint named the wrong party as owner of the property. Eventually, an amended complaint was served upon the correct owner. Four days after it was served, the owner entered into a contract to sell the property. Based on that contract, the buyer filed a motion to intervene in the foreclosure action. The lower court concluded that the buyer had properly moved to intervene, finding that it was offering the owner more than nominal consideration and the owner would realize some value from the property.

On appeal, the Appellate Division affirmed the lower court’s ruling. It noted that the facts did not demonstrate the buyer appeared at the eleventh hour as a title raider; rather the certificate holder failed to serve the proper defendant initially, and the offer to purchase occurred almost simultaneously with the correct service. The Court found that the buyer had followed proper procedure by obtaining court approval before attempting to redeem the property, and found no error in the lower court’s finding that the buyer offered more than nominal consideration. It observed that if the certificate holder had wanted to hedge its risk of losing the property to the buyer, it might have offered to buy the property from the owner for some reasonable consideration before filing the foreclosure suit.


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