On March 27, 2014, Bill A347 passed both houses of the New Jersey legislature. Of note, the Senate passed the bill 36-0. The bill requires that during foreclosure proceedings, the mortgage lenders must maintain residential properties which have been vacated or abandoned. This would apply to condominium units and homes located within residential community associations. The bill would further require mortgage lenders to address and cure any municipal code violations upon receipt of a violation notice from the municipal taxing authority or regulatory agency.
Of particular note, the bill provides that within 30 days following the effective date of the statute, any mortgage holder that has initiated a foreclosure proceeding on any residential property must provide a list of all affected residential properties in each municipality to the taxing authority with the required information. The municipality may then issue notices of violation directly to the mortgage holder and, if the violations are not cured, the municipality may impose penalties directly upon the mortgage holder. The bill currently does not state what the consequence will be for violations of the statute and appears to leave the enforcement of the statute to the municipality. In addition, it is unclear if this statute may create a separate cause of action for community associations to force a mortgage holder to take action regarding vacated properties.
The bill is still pending before the governor, but is expected to be signed into law. I will continue to monitor this pending law and provide an update as more information is available.
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