161 A.3d 775
N.J. Super. Ct. App. Div.2017Background
- Plaintiff purchased Tax Sale Certificate No. 2006-1326 for Unit 114, 2700 Kennedy Blvd., Jersey City, on June 22, 2006, and later commenced foreclosure to bar redemption.
- Judge Innes set redemption at $20,756.15 with a redemption date of September 8, 2016; plaintiff later vacated and reset proceedings so redemption was permitted until final judgment.
- Highland House (the condominium association) held recorded assessment liens and separately prosecuted its own foreclosure action against the unit owner, ultimately obtaining a foreclosure judgment on September 26, 2016.
- In early September 2016 attorneys for the parties negotiated: plaintiff’s counsel (Lipstein) mistakenly believed the association could redeem and agreed informally to extend the redemption period by three weeks while negotiations continued.
- On September 19, 2016 Highland House paid $23,722.98 to redeem the tax sale certificate; plaintiff refused the funds and moved to vacate that redemption. Highland House later purchased the property at a sheriff’s sale on February 2, 2017.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Highland House was statutorily permitted to redeem the tax sale certificate on Sept. 19, 2016 | Highland House was not an eligible redeemer under N.J.S.A. 54:5-54 (not owner, mortgagee, prior tax lienholder, or occupant) | As a foreclosing condominium association with a super-priority lien, it is akin to a mortgagee and could redeem | Court: Not permitted — association was not a “mortgagee” or other listed redeemer at time of redemption |
| Whether plaintiff’s attorney’s extension or negotiations estop plaintiff from voiding the redemption | Plaintiff: no waiver or estoppel; promptly sought relief after learning association rejected its offer | Defendant: plaintiff’s counsel’s conduct and extension should preclude relief | Court: No estoppel/waiver — plaintiff may vacate the invalid redemption |
| Whether the post-redemption sheriff’s sale (Feb. 2, 2017) rendered the challenge moot | Plaintiff: invalidity of the September redemption remains a live issue despite later sale | Defendant: moot because Highland House became owner and would then be entitled to redeem | Court: Not moot — the validity of the actual September 19, 2016 redemption is adjudicated; later ownership does not validate that prior act |
| Whether equitable considerations justify upholding the redemption despite statutory ineligibility | Plaintiff: public policy and statutory priority favor upholding tax lien foreclosure rights | Defendant: equitable fairness because association sought to protect its lien | Court: No equitable basis to validate the improper redemption; plaintiff’s interest favored by policy encouraging tax foreclosure |
Key Cases Cited
- Savage v. Weissman, [citation="355 N.J. Super. 429" ] (App. Div. 2002) (tax sale certificate creates lien subordinate to owner’s statutory right of redemption)
- Caput Mortuum, LLC v. S & S Crown Services, Ltd., [citation="366 N.J. Super. 323" ] (App. Div. 2004) (limits on who may redeem tax sale certificates; judgment creditors are not entitled to redeem unless they become owners)
- Cherokee Equities, L.L.C. v. Garaventa, [citation="382 N.J. Super. 201" ] (Ch. Div. 2005) (courts disfavour ‘title raiders’ and construe redemption rights narrowly)
- Lonsk v. Pennefather, [citation="168 N.J. Super. 178" ] (App. Div. 1979) (public policy favors foreclosure of tax sale certificates to assist municipal tax collection)