Stillwater Township – Property Owner Inquiries Regarding Township Owned Tax Sale Certificates and Properties

The following information summarizes the procedures available to Stillwater Township for addressing requests to purchase Township held tax sale certificates and Township owned properties. 

Township Owned Tax Sale Certificates: 

  1. The Township Committee can assign (sell) Tax Sale Certificates (“TSC”) that the Township holds to an interested party and the purchaser can undertake their own foreclosure. There are a few options for assigning a TSC, including one that allows for a private sale based on the purchaser paying the full amount owed on the TSC.  A TSC can also be assigned through a public auction sale, with or without paying the subsequent tax liens against the property.  There are also assignment statutes that authorize a sale for less than the full amount owed on the TSC in cases where the amount of the taxes exceeds the property value.

The benefit to the Township is that it receives the money owed on the TSC at the time that the assignment is complete.  The purchaser can then proceed to foreclose on the TSC and if the property owner (or other interested parties, such as a mortgage holder) does not redeem, the purchaser will obtain title to the property.

  1. In Rem Foreclosure. The Township Committee can include a TSC in a future In Rem Foreclosure.  In the event that the TSC is not redeeming during the In Rem Foreclosure process, the Township will acquire title to the property and can include it in a future property sale. 

Sale of Township Owned Properties

  1. Public Auction Sale (N.J.S.A. 40A:12-13(a)
  • Can be used for any size property that is not needed for Township use, including properties that are without improvements and are less than the minimum lot size required by the zoning ordinance for development within the zone where the property is located (“Undersized Property”). If an Undersized Property is involved, it is subject to the adjacent property owners’ right of first refusal to purchase the property.
  • When the list of properties to be sold is created, the Township will determine the minimum sale price. The Township may use a licensed real estate appraiser to assist in establishing property values in order to determine minimum bid prices.
  • A resolution or ordinance is then adopted authorizing the sale, fixing the minimum prices for the properties with or without the reservation of the right to reject all bids when the highest bid is not accepted.
  • Notice of the sale must be published at least once a week during two consecutive weeks, with the last publication not to be earlier than seven days prior to the sale date.
  • The Township can impose restrictions on the use of the property, as well as other conditions, which include the type or size of buildings or structures that could be constructed on the property.
  1. Private Sale (N.J.S.A. 40A:12-13(b)(5) 
  • This is allowed when the property being sold is less than the minimum size required for development under the municipal zoning ordinance and there are no capital improvements on the property. 
  • If there is only one contiguous property owner to the property being sold and the property is less than an eighth of the minimum size required under the zoning ordinance, the fair market value can be determined through negotiations directly with the property owner, but it cannot be less than $1.00. 
  • If there is more than one contiguous property owner, the property will be sold to the highest bidder among the contiguous property owners. The statute provides that the sale shall not be for less than the fair market value of said real property.
  • With a private sale, the properties must be sold for fair market value and does not require that the properties be sold for their assessed value.
  • A licensed appraiser can assist in determining the estimated fair market value for the properties.
  • If the lot size is equal to or greater than the minimum lot size required in the zone, the property would have to be sold through public auction sale and open to any interested party.
  • If one or more of the properties are less than the minimum size required under the zoning ordinance, it could then be offered to the contiguous property owners.
  • A list of the contiguous property owners will need to be created and those property owners should be contacted in order to determine if they have an interest in the property.
  • An ordinance will then be prepared authorizing the sale. The ordinance will reflect that the sale is between the contiguous property owners as required by J.S.A. 40A:12-13(b) (5) and N.J.S.A. 40A:12-13.2, since the contiguous property owners have a right of first refusal.
  • Notice of the sale will be published at least once a week for two consecutive weeks, the last publication not being earlier than seven days prior to the sale date
  • Notice of the sale will be mailed directly to each contiguous property owner

The above summary is not intended to provide the reader with legal advice.  The purchase of a Tax Sale Certificate or real property is a significant matter and all readers are strongly advised to contact their own attorney to assist them in proceeding to purchase a Tax Sale Certificate or property.

If you have any questions or would like further information regarding a Township owned TSC or property, please contact the Township Clerk, Lynda Knott.






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