Purchasing a house at a sheriff's sale in New Jersey can be a complex process, and there are several legal issues and considerations you should be aware of. Keep in mind that real estate laws can vary, and it is important to consult with a qualified attorney in New Jersey who specializes in real estate to navigate these legal issues effectively. To be sure, potential profits exist in buying properties at sheriff sale and the technology today makes it easier than ever to be successful at it. To start, all counties in New Jersey have on-line listings of the sheriff sales each week that make it much easier to track. This combined with the ability to check approximate values quickly via
multiple fee sites provide a jump start to your research.
multiple fee sites provide a jump start to your research.
Here are some common legal issues to look out for when purchasing a house at a sheriff's sale in New Jersey:
Top Ten Legal Issues When Buying at Sheriff Sale
1. Title Issues: The property may have title defects or liens that can affect your ownership rights. You should conduct a thorough title search to identify any encumbrances on the property. You are really concerned with any liens that predate the lien that is foreclosing as those prior liens will have to be paid off after you obtain the sheriff’s deed from the county.
2. Redemption Rights: New Jersey law provides homeowners with a statutory right of redemption after a sheriff's sale. This means the homeowner has 10 days after to sale to pay off the outstanding
judgment and reclaim the property. Make sure you understand the redemption period and its implications. If the 10 days passes, then you as the buyer have the right to complete the purchase with the sheriff and obtain the sheriff’s deed.
3. Property Condition: Sheriff's sales are typically "as-is" sales, meaning you may not have the opportunity to inspect the property before purchase. Be prepared for potential hidden defects or property issues. Be especially prepared for any tenants in the property. You will have to comply with the Anti Eviction Act in NJ before removing any tenants.
4. Bidding Process: Understanding the bidding process at a sheriff's sale is crucial. You need to know how to participate, what payment methods are accepted, and any specific requirements set by the sheriff's office.
You need to know the lengthy of time that you must pay any balance to the Sheriff.
5. Mortgage Liens: Some properties may have multiple mortgage liens, and it's important to determine the priority of these liens. In some cases, you may be responsible for paying off all liens on the property after you buy the property. See number 1 above.
6. Taxes and Municipal Liens: Make sure to investigate any unpaid property taxes or municipal liens on the property. In some cases, you may be responsible for these debts. In New Jersey you must contact the municipality or city tax collector to see what is due as the real estate tax liens take priority over any mortgage.
7. Bankruptcy: The previous homeowner might have filed for bankruptcy, which could complicate the process and require legal assistance. If the property owner files before the sale, your purchase of the property will be deemed not valid. You would get your deposit back, but it is still a
potential headache. If they file the bankruptcy after the sheriff sale, it will depend on whether the property owner filed within the 10 day right of redemption after the sale or file after that 10 day period.
8. Legal Challenges: There may be legal challenges or disputes related to the foreclosure process or the sheriff's sale. Be prepared to handle potential litigation. There is a myriad of grounds that can be used to try to void the sale. Typically, you can overcome those objections to the sale depending on what happened.
9. Due Diligence: Conduct thorough due diligence by reviewing all relevant documents, court filings, and public records to ensure you have a clear understanding of the property's history and any potential legal issues. You should also look to see if the property is in a flood zone, has any affordable housing restrictions, is in a wetlands area, has any environmental issues etc.
10. Consult an Attorney: It's highly recommended to consult with an experienced real estate attorney who specializes in sheriff's sales and foreclosures in New Jersey. They can guide you through the process, help you address legal issues, and protect your interests. If they are
experienced in this area, they can also guide you through the bidding process or appear at the sale and bid for you. Our firm has done that many times for clients.
Consult with a NJ Lawyer if Considering Purchase of a
Property at Sheriff Sale or May be Losing Your Property
Remember that purchasing a property at a sheriff's sale can be risky in New Jersey and you should consult with a lawyer that understands the process. It's important to do your research, consult with professionals, and proceed with caution to ensure a successful purchase.
Our firm’s lawyers represents investors purchasing homes at sheriff sale and owners trying to save their homes from sheriff sale. We have also successfully represented those that have bid at a sheriff sale and now need to get out of the bid due to non-disclosed liens or other issues. Thus, our firm is in a unique position to understand all angles of the process. If your property is the subject of a potential sheriff sale, our primary practice is helping debtors use Chapter 13 bankruptcy to save the house and reorganize the debt on the property. Call now to discuss with one of our
bankruptcy lawyers to discuss your issues.
bankruptcy lawyers to discuss your issues.
