Until May of 2023, there was little question that the State of New Jersey could sell off liens to a property owner’s unpaid taxes, which could result in the total loss of the property regardless of its actual worth. That has now changed. Following up on the US Supreme Court’s decision in Tyler v. Hennepin County, the New Jersey Appellate Division decided 257-261 20th Avenue Realty, LLC v. Roberto. In Roberto, the defendant owned a property which was subject to a tax sale certificate held by the plaintiff, a third-party investor. The plaintiff filed a tax foreclosure complaint against the defendant, seeking to foreclose on the property and obtain a final judgment. The defendant did not file an answer or appear in court, and the plaintiff obtained a default judgment. After the trial court found there were exceptional circumstances to justify vacating the default judgment, the Appellate Division affirmed this and also held that the Tyler decision by the US Supreme Court extends to cases where the government sells off its right to foreclose.

What does this mean for homeowners facing tax foreclosure in New Jersey? Unless and until the New Jersey Supreme Court reverses it, it means that a homeowner facing foreclosure for not paying municipal taxes should have their property auctioned off and the extra money paid back to them, but there is also a strong argument to challenge the tax foreclosure sale of your property or to seek relief from a tax foreclosure sale that was in the works prior to the Tyler decision in May 2023. However, you should not rely on these cases alone to protect your property and your rights. You should consult with an experienced attorney who can advise you on the best course of action for your case and help you navigate the complex and fast-moving tax foreclosure process. Contact us today for a free consultation and let us help you save your property and your interests.


* This post is for educational purposes and should not be interpreted as legal advice.

Christopher T. Campbell is an experienced New Jersey attorney focused on assisting homeowners with asset and surplus fund recovery. If you have questions regarding asset recovery, a foreclosure, or a sheriff sale, we encourage you to contact us today.