So you bought a Tax Sale Certificate Assignment. Now what?

Congratulations on purchasing a Tax Sale Certificate (TSC) assignment. You are on your way to owning new real estate at a very steep discount. You just need to follow a few steps to get there.

1) Record your assignment with the County Clerk.

The letter you received from the municipality probably told you about this step, and it needs to be done immediately before you can proceed with turning your TSC into property ownership. Check with your County Clerk’s website how documents must be submitted for recording, or drop by the County Clerk’s office with your original assignment in hand and they’ll tell you what to do. After you receive confirmation that your TSC assignment was recorded (and this can take weeks depending on the county), you are ready for the next step.

2) Execute a title and judgment report on the property.

Ideally you would have done this before you even bought your TSC assignment because everything that is going to be an obstacle to your ownership of the property is going to be revealed in the title and judgment reports. However, getting a title report is an absolute must to the legal process of converting your TSC assignment into property ownership. Not only will the report tell you who else has rights to the property, and thus whose rights must be extinguished before you can take ownership to the property, you’re going to have to certify to the court that you executed the title report during the next step.

3) File a foreclosure complaint on the property.

Specifically, you’ll need to file a foreclosure complaint that bars and forecloses the defendant of all equity of redemption in and to the property and that vests you with title to the property. This is why the title report is so important – you can only extinguish the rights of the parties you include as defendants in the foreclosure action. If you miss somebody, than even after you get title to the property somebody else might still have a superior claim to the property and you might find yourself vulnerable to losing the property to somebody else down the road.

4) Record a Notice of Lis Pendens.

This is another document that has to be recorded by the County Clerk and its purpose is to protect the status quo and make sure that somebody doesn’t duck your foreclosure action by quickly selling the property to somebody else.

5) Serve the foreclosure complaint on the defendants.

After you receive confirmation from your County Clerk that your Notice of Lis Pendens was recorded (again, this can take a couple of weeks depending on your county), then you can serve the complaint on the defendants. The defendant will have to be served in person, although if you cannot locate after making a diligent effort you can notify defendant of the foreclosure complaint through publication in a newspaper of record for your county. After service has been established, you’ll have to give defendants 35 days to file an answer to the foreclosure complaint before moving on to the next step.

6) Request default.

Assuming no defendant has answered, you can request default by showing the court that you served all the defendants and gave them the required 35 days to answer. Now is also a good time to conduct military status searches for all of your defendants and to request a tax lien worksheet for your TSC from the tax office.

7) File a Motion to Fix Redemption.

With this motion you are asking the court to set a final deadline by which the property owner must redeem the TSC before you can take ownership of the property, as well as the amount the property owner must pay to redeem the TSC. Once the Order Fixing Redemption is granted, don’t forget to notify all the defendants in the same way in which they were served!

8) Request an Affidavit of Non-Payment from the tax office.

After the redemption deadline established in the Order Fixing Redemption is granted, you’ll need to request an Affidavit from the tax office stating that the TSC was not redeemed by deadline. In all likelihood the tax office won’t issue this affidavit unless you have stayed current on the taxes for the property since you purchased your TSC assignment, so be ready to pay all those taxes if you haven’t yet.

9) File a Motion for Final Judgment.

With that affidavit in hand, along with proof that you properly notified all the defendants of the default and Order Fixing Redemption, plus proof that no natural persons among the defendants are currently serving in the military, you are ready to request that the court give you title to the property.

10) Record Order of Final Judgment.

The Order of Final Judgment functions like a deed. As soon as the court grants the Order, you own the property, but to let the rest of the world know you own the property you must record the a certified with seal copy of the Order with your county clerk.

And that’s it. Naturally, the actual practice can turn out to be more difficult than the above makes it seem. And your dream of owning the property can be thrown out the door if it turns out that the federal government has an interest in the property (this is the sort of thing you discover in the title report). But for the most part, the kinds of properties that wind up with TSCs taken out against them tend not be defended by anybody during the foreclosure process, so it’s really just a lot of paper pushing in the exact manner prescribed by the laws of the State of New Jersey.

 

Mario R. Rodriguez, Esq., LLC, is experienced with the TSC foreclosure process and can advise and assist clients with TSC foreclosures across the state of New Jersey. To learn more about how this law office can assist you please contact us by e-mail at Mario@MRRodriguezEsq.com or by telephone at (856) 938-4495.

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