The New Jersey Appellate Division recently reversed the finding of a lower court, which had denied appellants’ attempt to intervene in a foreclosure matter, remanding the matter for the entry of an order permitting intervention. See Fig Cap Invs. NJ13, LLC v. 405 Bigelow Ln., No. A-2461-20 (App. Div. Mar. 22, 2022). In the case, Plaintiff purchased the tax sale certificate for a property in Vernon, New Jersey in 2017.  In June 2019, Plaintiff filed to foreclose on the property owner’s right to redemption and to obtain title to the property, and received a declaration that the property was abandoned.  On September 16, 2019, Appellants contracted with Defendant, the property owner, to purchase the property for $25,000.  One week later, Plaintiff served Defendant with the Notice of Foreclosure and the order determining the property was abandoned. On October 30, 2019, Appellants and Defendant closed on the sale of the property. Later that day, Plaintiff informed Appellants that Plaintiff would not agree to waive the requirement to file a motion to intervene in the foreclosure prior to redeeming as required by Simon v. Cronecker, 189 N.J. 304 (2007). Appellants moved to intervene in the foreclosure action on November 14, 2019, seeking a court order to compel Plaintiff to accept the redemption of the tax lien. Plaintiff opposed the motion, stating that Appellants had not followed the procedure established under Cronecker and N.J.S.A. 54:5-89.1 because Appellants did not seek permission from the court prior to redeeming the tax lien. The trial court denied Appellants’ motion, finding that Appellants had not followed the Cronecker procedure because they failed to intervene in the foreclosure case prior to redeeming the tax sale certificate. Therefore, the trial court denied Appellants’ motion to intervene. Appellants appealed.

The Appellate Court reversed.  It noted that in Cronecker, the plaintiff had moved to bar redemption a month after the court-ordered redemption date expired, and thereafter, an investor moved to intervene in the foreclosure action. The Cronecker court held that before redeeming the tax certificate, the third-party investor had to intervene in the foreclosure action and show more than nominal consideration had been offered for the property interest. The Appellate Court distinguished the instant case, noting that no redemption expiration date had been ordered, and that no authority supported Plaintiff’s argument that a notice of foreclosure sets a presumptive date for redemption. Instead, the Court noted that N.J.S.A. 54:5-54 allows any interested person to redeem the tax sale certificate at any time before the final date for redemption set by the court, and pointed to the similar factual scenario in Green Knight Cap., LLC v. Calderon, 469 N.J. Super. 390 (App. Div. 2021), in which the Appellate Division concluded that “when an investor has an interest in the property in foreclosure, is prepared to redeem the tax sale certificate, and files a motion to intervene in the foreclosure action before the entry of an order setting the last date for redemption, the investor is permitted to intervene and redeem the tax certificate.” Because the record did not reflect a court order setting a final date for redemption, the Appellate Division concluded that appellants moved to intervene prior to the redemption deadline.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Desiree McDonald at dmcdonald@riker.com, or Kevin Hakansson at khakansson@riker.com.