New Jersey Fair Foreclosure Act interpreted in case of "first impression"

Notice to tenant pursuant to the Fair Foreclosure Act must be given as set forth in the statute.

New Jersey tenants are protected from predatory landlords by the provisions of the New Jersey's Anti-Eviction statute.  So what happens to a tenant when a property is foreclosed?

A tenant cannot be evicted unless there is a violation of the lease, or a non-payment of rent.  A newly decided case looks at the provisions of the Anti-Eviction statute and the New Jersey Foreclosure Fairness Act.

UTS BECHMAN, LLC v. LIZA WOODARD (SUPERIOR COURT OF NEW JERSEY ESSEX COUNTY LAW DIVISION, SPECIAL CIVIL PART, DOCKET NO. LT-17399-19) begins in a divorce case where the wife was made the tenant of the former marital residence.  The mortgage that the former couple made on the property went into default and the plaintiff became owner of the property and attempted to evict the tenant.  She fought back.

In its ruling, the appellate court says:

This case, one of first impression, involves the rights of a tenant under the New Jersey Foreclosure Fairness Act, N.J.S.A. 2A:50-69 to -71. This is New Jersey’s version of foreclosure reform legislation that swept the country following the 2008 “Great Recession.” Defendant, pro se, essentially argues that the statute shields her from eviction in this summary dispossess non-payment action because the new property owner did not strictly comply with the notice requirements of the statute. This court agrees.

The decision analyzes the Anti-Eviction law and the Foreclosure Fairness Act.  In holding for the tenant, the court says:

The language of the statute is plain and clear. The New Jersey Foreclosure Fairness Act was intended as remedial legislation designed to fully inform residential tenants of their rights after a foreclosure. The language used evidences a clear legislative intent that the statute be strictly construed. The legislation is designed to protect tenants from what, in some cases, may be predatory landlords who seek to wrongfully evict a tenant. In the present matter, the notices provided by plaintiff do not comply with the strict requirements of the New Jersey Foreclosure Fairness Act. 

The notice introduced at trial merely notifies the tenant where to pay the rent. It did not include any of the language required by the statute. Further, the notice was not properly served, in that it was not sent by regular and certified mail to defendant.

The moral to the story: Investors buying tenant occupied residential property at foreclosure sale must adhere to the provisions of both statutes before attempting an eviction.

The decision can be found at New Jersey Courts.  If you cannot access the decision, please contact us for a full copy.

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