Glenn Reiser writes, in his New Jersey Law Journal article "The Rights and Remedies Available to A Distressed New Jersey Homeowner," about a scenario in which a lender forecloses on a homeowner's property due to a default, but the sheriff's sale is halted while the homeowner files for a loan modification with his lender. Unfortunately, there is no communication between the lender, which includes the lender's loan servicing company and the attorney prosecuting the foreclosure action, and the borrower. The borrower's application for the loan modification is eventually declined, but the lender and its agents neglect to send the borrower actual notice of the adjourned sheriff's sale. What rights and remedies may the borrower employ if his property is purchased by a third party at the adjourned sheriff's sale?
New Jersey Court Rule 4:65-2 requires that (i) the party obtaining the order for the sale must serve the owner of the property with notice of the sale at least 10 days in advance of the sale by registered or certified mail, return receipt requested and (ii) notice of a sheriff's sale be posted by the sheriff in the sheriff's office and also on the property being sold. In addition New Jersey Court Rule 4:65-4, which deals with adjourned sales, provides "the sheriff, receiver or other person may continue such sale by public adjournment, subject to such limitations and restrictions as are provided specially therefor." One may infer from "public adjournment" that notice of the adjourned sale be given to interested parties.
In general, pursuant to New Jersey law a homeowner is entitled to receive actual notice of a sheriff's sale date, including any adjournments or postponements of the sale. The sheriff's sale triggers a ten (10) day redemption period (the "Redemption Period") for the homeowner to redeem or repurchase the property by satisfying the full amount of the foreclosure judgment. Alternatively, the homeowner may file a Chapter 13 bankruptcy within the same Redemption Period which extends such Redemption Period for an additional 60 days pursuant to 11 U.S.C. 109(g).
If the notice provisions have not been met by the party obtaining the order for sale, the disadvantaged homeowner may object to the sheriff's sale, but, pursuant to New Jersey Court Rule 4:65-5, must do so within 10 days of the sale or prior to the time the sheriff conveys the deed to the purchaser.
Matthew L. Holden is a New Jersey real estate attorney representing clients throughout New York and New Jersey. Founded by Matthew L. Holden, The Law Offices of Matthew L. Holden, LLC is located in Hackensack, New Jersey.
