Skip to main content

Malone v. Midlantic Bank, N.A.

334 N.J. Super. 236, 758 A.2d 157 (App. Div. 2000)

FORECLOSURE; REDEMPTION—Living in an apartment at the pleasure of its owner does not qualify one as an “occupant” entitled to redeem property by paying the delinquent taxes.

A bank owned a condominium unit and then sold it to an individual, but the individual did not file a deed for more than three years. During that three year period, he neglected to pay any taxes or other municipal charges. A tax foreclosure was commenced before the deed was filed and process was served on the owner of record, i.e., the bank. No answer was filed and no redemption was made. Even though the individual owner learned of the tax foreclosure shortly before the foreclosure judgment was filed, he took no action. After entry of final judgment, he moved to vacate the judgment. The lower court denied the application because it was convinced that the condominium unit owner had not demonstrated excusable neglect. During oral argument, the unit owner revealed that his daughter was living at the premises. A hearing took place and the Court determined that the daughter and her fiancee were living in the unit but that there was no lease. She paid no rent, there was no term of occupancy, and all of the utility costs were in her father’s name and paid by him. The father produced a written lease, but the Court was satisfied that the document was bogus and was drafted “after the fact in an effort to mislead the court.” Consequently, the Court determined that the daughter and her fiancee occupied the premises at the pleasure of the property owner and that there was neither a definite term to their occupancy nor a rental arrangement that was either reasonable or sufficiently clear to define the legal relationship between them and the unit owner. “In essence, they are no more than licensees; that is, they have been given a personal but revocable privilege to utilize the premises.” Without a bona fide tenancy, they were not protected by the Anti-Eviction Act. In response, they argued that they were “nevertheless occupants and thus entitled to redeem in accordance with N.J.S. 54:5-54.” That statute permits any occupant of land sold for municipal taxes the right to redeem the property by paying the delinquent taxes. The statute does not define “occupant.” Prior case law, however, held that “for purposes of the redemption statute, the term ‘occupant’ should not be applied literally.” Following the reasoning of prior case law, the Court found it “clear that although there is no question that [the daughter] came into possession lawfully, that is, with the permission of the owner, it is also true that [she] currently [has] no enforceable leasehold in the property, either legally or equitably. Without an enforceable lease [she has] no lawful interest in the property. Given the absence of a lawful interest and given the fact that [her] alleged tenancy, assuming it was bona fide, would not be cut off by a tax sale foreclosure, [her] occupancy is not of the type that would entitle [her] to redeem under” N.J.S. 54:5-54.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •