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Lenders Permitted To Bring Summary Foreclosure Action Where Residential Property Is “Vacant And Abandoned”

The sluggish economy has resulted in a wave of foreclosures throughout the nation. For numerous reasons, including the sheer number of foreclosures that have been filed in recent years, the process from the filing of a foreclosure action to obtaining a judgment can be lengthy, often taking several years. Not only are lenders adversely affected by these delays, but so are community associations. An owner of property who is required to pay maintenance assessments to a community association, whose property is in foreclosure, has often also stopped paying his/her monthly assessments to the association.

In order to help expedite the foreclosure process, on December 6, 2012, Governor Chris Christie signed Legislation (N.J.S.A. 2A:50-73) permitting lenders to file a summary action to expedite the foreclosure process, if the property at issue is deemed to be “vacant and abandoned” residential property. In order to proceed “summarily”, which is a much quicker process than a standard foreclosure proceeding, the lender has to establish by clear and convincing evidence that the mortgaged real estate is both “vacant” and “abandoned”The property shall be deemed vacant and abandoned if the Court finds that the mortgaged property is not occupied by a mortgagor or tenant as evidenced by a Lease Agreement entered into prior to the service of a Notice of lntent to Foreclose, and at least two of the following conditions are found to exist:

(1) overgrown or neglected vegetation;

(2) the accumulation of newspapers, circulars, flyers or mail on the property;

(3) disconnected gas, electric, or water utility services to the property;

(4) the accumulation of hazardous, noxious, or unhealthy substances or materials on the property;

(5) the accumulation of junk, litter, trash or debris on the property;

(6) the absence of window treatments such as blinds, curtains or shutters;

(7) the absence of furnishings and personal items;

(8) statements of neighbors, delivery persons, or government employees indicating that the residence is vacant and abandoned;

(9) windows or entrances to the property that are boarded up or closed off or multiple window panes that are damages, broken and unrepaired;

(1 0) doors to the property that are smashed through, broken off, unhinged, or continuously unlocked;

(11) a risk to the health, safety or welfare of the public, or any adjoining or adjacent property owners, exists due to acts of vandalism, loitering, criminal conduct, or the physical destruction or deterioration of the property;

(12) an uncorrected violation of a municipal building, housing, or similar code during the preceding year, or an order by municipal authorities declaring the property to be unfit for occupancy and to remain vacant and unoccupied;

( 13) the mortgagee or other authorized party has secured or winterized the property due to the property being deemed vacant and unprotected or in danger of freezing;

(14) a written statement issued by any mortgagor expressing the clear intent of all mortgagors to abandon the property;

( 15) any other reasonable indication of abandonment. The Act goes on to set forth other procedural requirements imposed upon the lender, and also excuses the lender from satisfying certain procedural restrictions and requirements of the Fair Foreclosure Act.

This legislation goes into effect April 1, 2013. At that time, foreclosing lenders may proceed summarily to foreclose upon vacant and abandoned propertyso long as it can satisfy the requirements of the legislation. While it remains to be seen whether lenders will take advantage of this law, it is nonetheless hoped that the procedure will speed up the foreclosure process when properties are vacant and abandoned, which will presumably be a benefit to all creditors, including community associations.