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Williams v. The Borough of Hampton

2005 WL 1282049 (N.J. Super. Ch. Div. 2005)

TAX SALES; SLANDER OF TITLE—Where there is no outstanding tax obligation, a municipality must discharge an outstanding tax sales certificate and if it refuses to do so, a court can order the county clerk to do so and the property owner may have a cause of action for slander of title.

The title search for a property listed an open tax sale certificate. A municipal search for liens revealed that there was no balance due on the certificate. The municipality refused to cancel the certificate so the property owner moved to require the County Clerk to cancel the certificate. The property owner also sought recovery of attorney’s fees and other costs from the municipality by reason of its failure to cancel the certificate. The claim for fees and costs was based on the theory that the municipality had slandered the title by virtue of “malicious prosecution of false allegations concerning the title to one’s property causing special damages. ... Malice, express or implied, is an essential element of the cause of action for slander of title.” The municipality did not oppose cancellation of the tax certificate, but argued that the property owner was not entitled to any damages pursuant to a slander of title claim. The municipality’s tax collector had refused to sign the discharge certificate “because she ha[d] no personal knowledge about the certificate” and could not locate any records concerning the certificate.

By statute, the Superior Court is authorized to direct a county clerk to cancel of record any tax sale certificate if the Court is satisfied that the tax sale certificate had been fully paid. Here, the Court, based on the facts presented, felt compelled to order that the tax sale certificate be discharged. As to the slander of title claim, the Court made no determination other than to point out that the property owner had time to file a notice of claim and to pursue its slander of title claim in the Law Division.

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