Revises oversight of "Community Wealth Preservation Program" and requirements for nonprofit community development corporations.

A2233

ASSEMBLY, No. 2233

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Co-Sponsored by:

Assemblyman Danielsen

SYNOPSIS

���� Revises oversight of "Community Wealth
Preservation Program" and requirements for nonprofit community development
corporations.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning the �Community Wealth Preservation
Program� and amending P.L.1995, c.244.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 12 of P.L.1995,
c.244 (C.2A:50-64) is amended to read as follows:

���� 12.� a.� With respect to the
sale of a mortgaged premises under foreclosure action, each sheriff in this
State shall provide for, but not be limited to, the following uniform
procedures:

���� (1)�� Bidding in the name of
the assignee of the foreclosing plaintiff.

���� (2)�� That adjournment of the
sale of the foreclosed property shall be in accordance with N.J.S.2A:17-36.

���� (3) (a) The sheriff shall
conduct a sale within 150 days of the sheriff's receipt of any writ of
execution issued by the court in any foreclosure proceeding.

���� (b)�� If it becomes apparent
that the sheriff cannot comply with the provisions of subparagraph (a) of this
paragraph (3), the foreclosing plaintiff may apply to the office for an order
appointing a Special Master to hold the foreclosure sale.

���� (c)�� Upon the foreclosing
plaintiff making such application to the office, the office shall issue the
appropriate order appointing a Special Master to hold the foreclosure sale. The
office may issue the order to appoint a Special Master to hold foreclosure sales
for one or more properties within a vicinage.

���� (4)�� That notice for the sale
of a foreclosed upon residential property be mailed to the primary address of
the foreclosed upon defendant and to the address of the foreclosed upon
residential property.� The language used on the exterior of the envelope shall comply
with the federal "Fair Debt Collection Practices Act," 15 U.S.C.
s.1692 et seq.

���� (5) (a) That notice of the
upset price for the sale of a foreclosed upon residential property be provided
at least four weeks prior to the sheriff's sale and posted on the Internet
website of the sheriff's office and on any other medium used to provide notice
of the sheriff's sale.� The upset price provided in the notice shall be a good
faith estimate of the upset price on the day of the sheriff's sale; however,
the upset price on the day of the sheriff's sale shall not increase by more
than three percent from the upset price originally provided in the notice.� If
the sheriff's sale is delayed or postponed, or if circumstances occur that
require unforeseen advances to protect the borrower or the foreclosed upon
residential property in the event of vandalism, weather damage, or other
emergency property preservation needs, the upset price may be adjusted to
reflect these costs in the latest price; and

���� (b)�� Prior to providing the
upset price to the sheriff's office pursuant to subparagraph (a) of this
paragraph, the foreclosing plaintiff or agent of the foreclosing plaintiff
shall be prohibited from contacting the foreclosed upon defendant, next of kin
of the foreclosed upon defendant, or a nonprofit community development
corporation to inquire whether the foreclosed upon defendant, next of kin, or
nonprofit community development corporation intends to participate in the
sheriff's sale for the foreclosed upon property or exercise the provisions of
P.L.2023, c.255 (C.2A:50-56a et al.). If, after providing notice of the upset
price pursuant to subsection a. of this section, the foreclosing plaintiff is
informed that the foreclosed upon defendant, next of kin, or nonprofit
community development corporation intends to participate in the sheriff's sale
or exercise the provisions of P.L.2023, c.255 (C.2A:50-56a et al.), the
foreclosing plaintiff shall not attempt to delay or postpone the sheriff's sale
by reason of the foreclosed upon defendant, next of kin, or nonprofit community
development corporation's intention to participate in the sheriff's sale or
exercise the provisions of P.L.2023, c.255 (C.2A:50-56a et al.).� Any notice
required pursuant to this paragraph shall comply with the federal "Fair
Debt Collection Practices Act," 15 U.S.C. s.1692 et seq.

���� (6)�� Prior to the sale of
residential property, the foreclosing plaintiff shall disclose, if known,
whether the property is vacant, tenant-occupied, or owner-occupied.� If the
property is vacant, the foreclosing plaintiff shall provide the successful
bidder access to the property if the foreclosing plaintiff has such access and
may condition access by the successful bidder on being accompanied by a
representative of the foreclosing plaintiff.

���� (7) (a) Except as otherwise
provided in subparagraphs (b) and (c) of this paragraph, the successful bidder
at the sheriff's sale shall pay a 20 percent deposit in either cash or by a
certified or cashier's check, made payable to the sheriff of the county in
which the sale is conducted, immediately upon the conclusion of the foreclosure
sale.

���� (b)�� In the case of
residential property in which the successful bidder is the foreclosed upon
defendant, next of kin, tenant, nonprofit community development corporation, or
a bidder who shall occupy the property as the bidder's primary residence for a
period of at least 84 months, the successful bidder who has fulfilled the
requirements set forth in subsection e. of this section shall pay a 3.5 percent
deposit of the original upset price listed in the notice provided by the
foreclosing plaintiff pursuant to subparagraph (a) of paragraph (5) of this
subsection, or the final starting upset price listed for the sale of the
property, whichever is less, with the rest of the balance due within 90
business days by cash, certified or cashier's check, or by wire transfer, made
payable to the sheriff of the county in which the sale is conducted or to the
Special Master, if the sheriff cannot comply with the provisions of
subparagraph (a) of paragraph (3) of this subsection, immediately upon the
conclusion of the foreclosure sale.

���� (c)�� If the successful bidder
cannot satisfy the requirement of this paragraph that is applicable to the
bidder, or the applicable requirement of this paragraph respectively, the
bidder shall be in default and the sheriff shall immediately void the sale and
proceed further with the resale of the premises without the necessity of
adjourning the sale, without renotification of any party to the foreclosure and
without the republication of any sales notice.� Upon such resale, the
defaulting bidder shall be liable to the foreclosing plaintiff for any
additional costs incurred by such default including, but not limited to, any
difference between the amount bid by the defaulting bidder and the amount
generated for the foreclosing plaintiff at the resale.� In the event the
plaintiff is the successful bidder at the resale, the plaintiff shall provide a
credit for the fair market value of the property foreclosed.

���� (8) It is permissible, upon
consent of the sheriff conducting the sheriff's sale, that it shall not be
necessary for an attorney or representative of the person who initiated the
foreclosure to be present physically at the sheriff's sale to make a bid.� A
letter containing bidding instructions may be sent to the sheriff in lieu of an
appearance.

���� (9) That each sheriff's office
shall use, and the plaintiff's attorney shall prepare and submit to the
sheriff's office, a deed which shall be in substantially the following form:

THIS INDENTURE,

made this .....................
(date) day of ..................... (month), ........... (year).� Between
................................ (name), Sheriff of the County of
................. (name) in the State of New Jersey, party of the first part
and .................................................... (name(s)) party of the
second part, witnesseth.

���� WHEREAS, on the
...................... (date) day of ......................... (month), .......
(year), a certain Writ of Execution was issued out of the Superior Court of New
Jersey, Chancery Division- .................... (name) County, Docket No.���������������
directed and delivered to the Sheriff of the said County of ..................
(name) and which said Writ is in the words or to the effect following that is
to say:

���� THE STATE OF NEW JERSEY to the
Sheriff of the County of .................. (name),

Greeting:

���� WHEREAS, on the
................. (date) day of ............. (month), ............... (year),
by a certain judgment made in our Superior Court of New Jersey, in a certain
cause therein pending, wherein the PLAINTIFF is:

...................................................................

...................................................................

...................................................................

���� and the following named
parties are the DEFENDANTS:

...................................................................

...................................................................

...................................................................

���� IT WAS ORDERED AND ADJUDGED
that certain mortgaged premises, with the appurtenances in the Complaint, and
Amendment to Complaint, if any, in the said cause particularly set forth and
described, that is to say:� The mortgaged premises are described as set forth
upon the RIDER ANNEXED HERETO AND MADE A PART HEREOF.

BEING KNOWN AS Tax Lot ........
(number) in Block ......... (number) COMMONLY KNOWN AS (street address)
....................... .

TOGETHER, with all and singular the
rights, liberties, privileges, hereditaments and appurtenances thereunto
belonging or in anywise appertaining, and the reversion and remainders, rents,
issues and profits thereof, and also all the estate, right, title, interest,
use, property, claim and demand of the said defendants of, in, to and out of
the same, to be sold, to pay and satisfy in the first place unto the plaintiff,

...................................................................

...................................................................

the sum of $ ......... (amount)
being the principal, interest and advances secured by a certain mortgage dated
............... (date, month, year) and given by ........................
(name) together with lawful interest from

...................................................................

...................................................................

...................................................................

until the same be paid and
satisfied and also the costs of the aforesaid plaintiff with interest thereon.

AND for that purpose a Writ of
Execution should issue, directed to the Sheriff of the County of ..............
(name) commanding him to make sale as aforesaid; and that the surplus money
arising from such sale, if any there be, should be brought into our said Court,
as by the judgment remaining as of record in our said Superior Court of New
Jersey, at Trenton, doth and more fully appear; and whereas, the costs and
Attorney's fees of the said plaintiff have been duly taxed at the following
sum:� $ ............. (amount)

THEREFORE, you are hereby commanded
that you cause to be made of the premises aforesaid, by selling so much of the
same as may be needful and necessary for the purpose, the said sum of
$......... (amount) and the same you do pay to the said plaintiff together with
contract and lawful interest thereon as aforesaid, and the sum aforesaid of
costs with interest thereon.

And that you have the surplus
money, if any there be, before our said Superior Court of New Jersey, aforesaid
at Trenton, within 30 days after pursuant to R.4:59-1(a), to abide the further
Order of the said Court, according to judgment aforesaid, and you are to make
return at the time and place aforesaid, by certificate under your hand, of the
manner in which you have executed this our Writ, together with this Writ, and
if no sale, this Writ shall be returnable within 24 months.

WITNESS, the Honorable ...........
(name), Judge of the Superior Court at Trenton, aforesaid, the ...........
(date) day of ............. (month), ...... (year).

����������������������������������� /s/
........... (Clerk)

����������������������������������� Superior
Court of New Jersey

/s/.............................

Attorney for Plaintiff

As by the record of said Writ of
Execution in the Office of the Superior Court of New Jersey, at Trenton, in
Book ............ (number) of Executions, Page ........ (number) etc., may more
fully appear.

���� AND WHEREAS I, the said
.......................... (name), as such Sheriff as aforesaid did in due form
of law, before making such sale give notice of the time, place, and upset price
of such sale by public advertisement signed by myself, and set up in my office
in the .......................... (name) Building in .................. (name)
County, being the County in which said real estate is situate and also set up
at the premises to be sold at least three weeks next before the time appointed
for such sale.

���� I also caused such notice to
be published four times in two newspapers designated by me and printed and
published in the said County, the County wherein the real estate sold is
situate, the same being designated for the publication by the Laws of this State,
and circulating in the neighborhood of said real estate, at least once a week
during four consecutive calendar weeks.� One of such newspapers,
......................... (name of newspaper) is a newspaper with circulation
in ................. (name of town), the County seat of said .................
(name) County.� The first publication was at least twenty-one days prior and
the last publication not more than eight days prior to the time appointed for
the sale of such real estate, and by virtue of the said Writ of Execution, I
did offer for sale said land and premises at public vendue at the County
................ (name) Building in ...................... (name of town) on
the ............... (date) day of ........................, .... (month) (year)
at the hour of ............. (time) in the ......... (a.m. or p.m.).

���� WHEREUPON the said party of
the second part bidding therefore for the same, the sum of $................
(amount) and no other person bidding as much I did then and there openly and
publicly in due form of law between the hours of ............... (time) and
................ (time) in the ........ (a.m. or p.m.), strike off and sell
tracts or parcels of land and premises for the sum of $ ................
(amount) to the said party of the second part being then and there the highest
bidder for same.� And on the ............ (date) of ................. (month)
in the year last aforesaid I did truly report the said sale to the Superior
Court of New Jersey, Chancery Division and no objection to the said sale having
been made, and by Assignment of Bid filed with the Sheriff of
.................. (name) County said bidder assigned its bid to:

...................................................................

...................................................................

...................................................................

����
AND WHEREAS, a party of the
second part that is a nonprofit community development corporation and has
satisfied the conditions set forth in subsection f. of section 12 of P.L.1995,
c.244 (C.2A:50-64), and its successors and assigns, is subject to a renewable
deed restriction on the lands described herein, with a minimum number of
affordability years being 30 years and with an option to renew by the party of
the second part or its successors and assigns, which shall require, in a future
sale of the lands described herein, a party of the second part and its
successors and assigns to sell the lands to a household earning no more than
120 percent of area median income and spending no more than 35 percent of gross
monthly income on the mortgage, property taxes, interest, and home insurance of
the lands described herein or, if the nonprofit community development
corporation and its successors and assigns decide to rent the lands described
herein,� rent the lands to a household earning no more than 80 percent of area
median income and spending no more than 35 percent of gross monthly income on
rent.� In each aforementioned circumstance, the nonprofit community development
corporation, and its successors and assigns, shall be compliant with P.L.2024,
c.2 (C.52:27D-304.1 et al.).� In each sale under the deed restriction,
following the first sale of the lands described herein by a nonprofit community
development corporation, the following formula shall be used to determine the
sale price of the lands: (a) the original sale price of the lands when the
seller acquired the lands at closing, plus (b) the original sale price of the
lands when the seller acquired the lands multiplied by the percentage increase
in the current area median household income for a family of four, as published
by the New Jersey Housing and Mortgage Finance Agency, from the date the seller
acquired the lands at closing.

���� NOW, THEREFORE, This Indenture
witnesseth, that I, the said .................. (name), as such Sheriff as
aforesaid under and by the virtue of the said Writ of Execution and in
execution of the power and trust in me reposed and also for and in consideration
of the said sum of $ ............... (amount) therefrom acquit, exonerate and
forever discharge to the said party of the second part, its successors and
assigns, all and singular the said tract or parcel of lands and premises, with
the appurtenances, privileges, and hereditaments thereunto belonging or in any
way appertaining; to have and hold the same, unto the said party of the second
part, its successors and assigns to its and their only proper use, benefit, and
behoof forever, in as full, ample and beneficial manner as by virtue of said
Writ of Execution I may, can or ought to convey the same.

And, I, the said ................
(name), do hereby covenant, promise and agree, to and with the said party of
the second part, its successors and assigns, that I have not, as such Sheriff
as aforesaid, done or caused, suffered or procured to be done any act, matter
or thing whereby the said premises, or any part thereof, with the
appurtenances, are or may be charged or encumbered in estate, title or
otherwise.

IN WITNESS WHEREOF, I the said
..................... (name) as such Sheriff as aforesaid, have hereunto set my
hand and seal the day and year aforesaid.

Signed, sealed and delivered

���� �in the presence of

..................................������������ ..............................

Attorney at Law of New Jersey�������� ...........(name)
Sheriff

STATE OF NEW JERSEY)�� SS.

.......(county���� )

���� I, ............... (name),
Sheriff, of the County of ............... (name), do solemnly swear that the
real estate described in this deed made to

...................................................................

...................................................................

...................................................................

was by me sold by virtue of a good
and subsisting execution (or as the case may be) as is therein recited, that
the money ordered to be made has not been to my knowledge or belief paid or
satisfied, that the time and place of the same of said real estate were by me
duly advertised as required by law, and that the same was cried off and sold to
a bona fide purchaser for the best price that could be obtained and the true
consideration for this conveyance as set forth in the deed is $
........................ (amount).

����������������������������������� ..................................

����������������������������������� .........
(name), Sheriff

���� Sworn before me,
................. (name), on this .......... (date) day of ..................
(month), ......... (year), and I having examined the deed above mentioned do
approve the same and order it to be recorded as a good and sufficient
conveyance of the real estate therein described.

STATE OF NEW JERSEY� )��� ss.�� ........................

.......... (Name) County)�������� Attorney
or Notary Public

On this ................... (date)
day of ................. (month), ........ (year), before me, the subscriber,
........................ (name) personally appeared ......................
(name), Sheriff of the County of ................ (name) aforesaid, who is, I
am satisfied, the grantor in the within Indenture named, and I having first
made known to him the contents thereof, he did thereupon acknowledge that he
signed, sealed and delivered the same on his voluntary act and deed, for the
uses and purposes therein expressed.

����������������������������������� .............................

����������������������������������� Attorney
or Notary Public

���� b.��� At the conclusion of the
sheriff's sale, the attorney for the plaintiff shall prepare and deliver to the
sheriff a deed which shall be in the form provided pursuant to paragraph (9) of
subsection a. of this section for the sheriff's execution and the deed shall be
delivered to the sheriff within 10 days of the date of the sale.� The sheriff
shall be entitled to the authorized fee, as a review fee, even if the
plaintiff's attorney prepares the deed.

���� c. (1) The sheriff's office
shall, within
[
two
weeks
]

90 days
of the date of the sale, deliver a fully executed deed to the
successful bidder at the sale provided that the bidder pays the balance of the
monies due to the Sheriff by either cash or certified or cashier's check.� In
the event a bid is satisfied after the expiration and additional interest is
collected from the successful bidder, the sheriff shall remit to the plaintiff
the total amount, less any fees, costs and commissions due the sheriff, along
with the additional interest.

����
(2)�� Notwithstanding
paragraph (1) of this subsection, a foreclosed upon defendant may exercise a
right of redemption on the residential property within 90 days of the date of
sale by paying to the sheriff the amount of money in which the judgment in the
foreclosure action was granted on the property plus interest, sheriff�s fees,
and other expenses reasonably incurred by the successful bidder after the
sale.�

����
[
(2)
]

(3)
Notwithstanding the
provisions of paragraph (1) of this subsection, in the case of residential
property in which the successful bidder is permitted to pay a 3.5 percent
deposit upon the conclusion of the foreclosure sale pursuant to subparagraph
(b) of paragraph (7) of subsection a. of this section, no interest shall accrue
on the balance of the sale of the property until 60 business days have passed
following the date of the sale, and thereafter, the successful bidder shall
have 30 business days to fulfill the balance.� If the successful bidder fails
to fulfill the balance within this 90 business day period, the bidder shall
forfeit the deposit on the property and shall be responsible for the payment of
accrued interest incurred as a result of the sale being void, unless the
failure to fulfill the balance is due to the bidder's inability to close a
mortgage through no fault of their own, which includes, but is not limited to,
the appraised value of the property being less than the purchase value of the
property or the financial institution denying financing, in which case the
bidder shall be refunded the deposit on the property and shall be responsible
only for the payment of accrued interest.� In addition, if a successful bidder
fails to fulfill the balance within this 90 business day period, any subsequent
foreclosure sale involving the same residential property and the same
foreclosing plaintiff and foreclosed upon defendant shall be subject to the
procedures set forth in subparagraph (a) of paragraph (7) of subsection a. of
this section and there shall be no right of first or second refusal pursuant to
subsections d. and g. of this section.�

���� d.��� In the case of a
foreclosed residential property where the foreclosed upon defendant is an
individual and not a corporate entity, if the foreclosed upon defendant
[
,
]

or

next of kin of the foreclosed upon defendant
[
,
or tenant of the foreclosed upon property
]

has secured financing or assets sufficient to meet terms offered by the
foreclosing plaintiff or an alternative financial institution to purchase the
property, the foreclosed upon defendant
[
,
]

or

next of kin of the foreclosed upon defendant
[
,
or tenant
]

shall have the right of first refusal to purchase the property for the original
upset price listed in the notice provided pursuant to subparagraph a. of
paragraph (5) of subsection a. of this section, or at the final starting upset
price listed for the sale of the property, whichever is less.� The right of
first refusal shall only be made available to the foreclosed upon defendant
[
,
]

or

next of kin of the foreclosed upon defendant
[
,
or tenant
]

for the initial sale of the foreclosed upon property, unless the sale is
delayed or postponed, upon which the foreclosed upon defendant
[
,
]

or

next of kin of the foreclosed upon defendant
[
,
or tenant
]

shall retain the right of first refusal for the rescheduled date of sale.� Such
right shall be deemed exercised if, prior to the opening of the bidding on the
foreclosed property, the foreclosed upon defendant
[
,
]

or
next of kin of the
foreclosed upon defendant
[
,
or tenant
]

pays a 3.5 percent deposit with the rest of the balance due within 90 business
days, pursuant to the provisions of this section, by cash, certified or
cashier's check, or by wire transfer, made payable to the sheriff of the county
in which the sale is conducted or to the Special Master, if the sheriff cannot
comply with the provisions of subparagraph (a) of paragraph (3) of subsection
a. of this section.

���� e.���� A bidder who is
permitted to pay a 3.5 percent deposit upon the conclusion of the foreclosure
sale pursuant to the provisions of this section may purchase residential
property at a sheriff's sale by way of financing if the bidder provides
documentation that the bidder has been pre-approved by a financial institution
regulated by the Department of Banking and Insurance or by a federal banking
agency, as defined by section 3 of the "New Jersey Residential Mortgage
Lending Act," P.L.2009, c.53 (C.17:11C-53), for financing a residential
property.

���� (1) A bidder who is permitted
to pay a 3.5 percent deposit upon the conclusion of the foreclosure sale
pursuant to the provisions of this section and intends to finance the purchase
of residential property at a sale shall be:

���� (a) preapproved for the amount
of the original upset price listed in the notice provided pursuant to
subparagraph a. of paragraph (5) of subsection a. of this section or the final
starting upset price listed for the sheriff's sale of the property, whichever
is less;

���� (b) limited to submitting bids
no higher than the amount for which the bidder has been pre-approved for
financing; and

���� (c) if the bidder is an
individual, required to present current and valid photo identification that
substantially conforms to the name and information contained on the financing
pre-approval forms obtained by the bidder.

���� (2) A tenant or a successful
bidder who intends to occupy the property for 84 months, and finances the
purchase of the property and pays a 3.5 percent deposit pursuant to the
provisions of this section, shall have received eight hours of homebuyer education
and counseling through a United States Department of Housing and Urban
Development (HUD) certified housing counseling agency, and shall present a
certificate of completion or proof of enrollment in that program to the
sheriff.

���� (3) To ensure that the
provisions of this section only apply to a foreclosed upon defendant or next of
kin of the foreclosed upon defendant who has entered foreclosure proceedings
due to circumstances outside of the foreclosed upon defendant's control, subsections
d. through f. of this section shall only apply to a foreclosed upon defendant
or next of kin of the foreclosed upon defendant that demonstrates to the
foreclosing plaintiff that the foreclosed upon defendant experienced:

���� (a) financial hardship;

���� (b) a physical or mental
illness preventing the foreclosed upon defendant from earning an income;

���� (c) divorce or legal
separation;

���� (d) proof of death of the
foreclosed upon defendant, or the foreclosed upon defendant's spouse, or child;
or

���� (e) predatory loan practices.

���� Any information provided under
this paragraph shall be provided at the request of the foreclosing plaintiff
prior to the date of sale for the foreclosing property and shall not conflict
with subparagraph (b) of paragraph (5) of subsection a. of this section.�
Nothing
under this paragraph shall be construed to deny a foreclosed upon defendant or
next of kin from utilizing the provisions of subsections d. through f. of this
section.

���� (4)�� If a bidder intending to
finance the purchase of the residential property is a current tenant, the
tenant shall provide documentation confirming:

���� (a)�� that the tenant has
resided at the property for at least a year; and

���� (b)�� that the tenant is not
in arrears with rent payments as of the date the foreclosed upon defendant
received a notice of foreclosure from the foreclosing plaintiff.

���� (5)�� To prove the residency
requirement pursuant to subparagraph (a) of paragraph (4) of this subsection,
the tenant shall also be required to present at least two current and valid
forms of identification that substantially conform to the name and property address
contained in the tenant's lease agreement, which shall include but not be
limited to:

���� (a) a driver's license issued
by the New Jersey Motor Vehicle Commission;

���� (b) a utility bill;

���� (c) a checking or savings
account statement from a bank or credit union issued at least 60 days prior to
submitting documentation required pursuant to this subparagraph;

���� (d) a statement, receipt, or
letter of correspondence from a federal, State, or local government office
delivered at least one year prior to submitting documentation required pursuant
to this subparagraph; or

���� (e) any other form of
identification that the sheriff deems valid pursuant to this paragraph.

���� (6)�� A tenant shall be
allowed to purchase residential property pursuant to this subsection if a
foreclosed upon defendant or next of kin of the foreclosed upon defendant
decides not to participate in the sheriff's sale or exercise the provisions of
P.L.2023, c.255 (C.2A:50-56a et al.).� A tenant shall have up to 90 business
days to purchase the residential property after successfully bidding for the
property.

���� (7)�� With exception to the
foreclosed upon defendant, the foreclosed upon defendant's next of kin, or a
nonprofit community development corporation,
[
an
]

a
successful
individual bidder purchasing residential property in a sheriff's
sale pursuant to this subsection shall be required to occupy the property as
the bidder's primary residence for a fixed term of at least 84 months after
taking possession.�
[
The
deed for the property shall clearly state that the property may not be sold for
84 months from the date of the sheriff's sale, except pursuant to the
exceptions permitting a successful bidder to vacate the property prior to
residing in the property for 84 months in paragraph (8) of this subsection
]
�
An
individual bidder who purchases residential property pursuant to this
subsection shall also be subject to a deed restriction concerning the
requirements of this paragraph and paragraph (8) of this subsection, which
shall be included within the deed prepared pursuant to subsection a. of this
section, in substantially the following form:

����
A party of the second part,
that is an individual bidder pursuant to subsection e. of section 12 of
P.L.1995, c.244 (C.2A:50-64), is subject to a deed restriction on the lands
described herein, requiring the bidder to occupy the lands as the primary residence
of the bidder for a term of at least 84 months and submitting an annual
certification of the bidder�s occupancy with the administrative agent of the
municipality in which the lands are located or municipal housing liaison,
unless the bidder is no longer able to reside on the lands pursuant to
paragraph (8) of subsection e. of section 12 of P.L.1995, c.244 (C.2A:50-64)
.�

���� (8)�� With exception to the
foreclosed upon defendant, the foreclosed upon defendant's next of kin, or a
nonprofit community development corporation, a successful individual bidder who
finances the purchase pursuant to this subsection and does not occupy the residence
for a period of at least 84 months shall be assessed a fine by a court of
competent jurisdiction up to $100,000 for the first violation, and $500,000
thereafter for each subsequent violation.� These penalties shall not be
assessed against a bidder who finances the purchase with good faith and intent
and is thereafter required to vacate the property prior to residing in the
property for 84 months due to:

���� (a)�� death of the bidder or
the bidder's spouse or child;

���� (b)�� disability of the bidder
or a member of the bidder's household;

���� (c)�� divorce;

���� (d)�� legal separation;

���� (e)�� military deployment;

���� (f)�� a change in employment
of the bidder or a member of the bidder's household that results in a reduction
in income or a need to move out-of-state;

���� (g)�� a change in the number
of permanent residents of the household due to: the birth or adoption of a
child; or the permanent relocation of an elder into the household, as proved by
a note from the doctor or social worker of the elder;

���� (h)�� a need to move to care
for a family member for a period of at least six months, as evidenced by: an
address change; and a note from the family member in need of care, the doctor
of the family member, or the social worker for the family member; or

���� (i)��� foreclosure.

���� A bidder who finances the
purchase of the residential property in good faith and intent and is thereafter
required to vacate the property prior to residing in the property for 84 months
pursuant to paragraph (8) of this subsection shall retain the deed to the
property until the deed is transferred.

���� In the event of the death of a
successful bidder, the property may be transferred to another owner in
accordance with applicable laws governing estate, inheritance, and probate
matters and the occupancy requirement shall be extinguished.

���� A fraudulent violation of
subparagraphs (a) through (i) of this paragraph by a bidder shall be an
unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.).

���� f.���� If the foreclosed upon
defendant, next of kin of the foreclosed upon defendant, or tenant of the
foreclosed upon property fails to secure financing or assets sufficient to meet
the terms offered by the foreclosing plaintiff or an alternative financial institution
to purchase the residential property, the foreclosed upon defendant, next of
kin of the foreclosed upon defendant, or tenant may request that a nonprofit
community development corporation
, included within the list of nonprofit
community development corporations pursuant to subsection h. of this section,
�
purchase the property.� If the nonprofit community development corporation
agrees in writing to purchase the property for the foreclosed upon defendant,
next of kin of the foreclosed upon defendant, or tenant to reside in, the
corporation shall:

���� (1)�� allow the foreclosed
upon defendant, next of kin of the foreclosed upon defendant, or tenant to
reside at the property for a period of time as agreed upon in paragraph (2) of
this subsection;
[
and
]

���� (2)�� negotiate with the
foreclosed upon defendant, next of kin of the foreclosed upon defendant, or
tenant on
[
an
affordable
]

a
lease
[
schedule
]

agreement

that shall include
:

����
(a)�� an affordability
benchmark that shall require lease payments to be set within a reasonable
percentage of the occupant�s verified monthly income, not to exceed 39 percent
of total household income;

����
(b)�� lease payments that
are set at a fixed-rate or indexed to inflation, with a maximum increase of no
more than two percent per year;

����
(c)�� a lease schedule of a
minimum of 12 months, with renewal options and clear conditions for
termination;

����
(d)�� eviction protection
clauses for occupants who comply with lease obligations; and

����
(e)
�� an option to
purchase the property from the corporation
, which shall include:

����
(i)��� the purchase price,
including the total sales price broken down into the monthly principal,
interest, taxes, and insurance. The total monthly housing cost shall be
comprised of the principal, interest, taxes, and insurance, and shall not
exceed 39 percent of the household�s total monthly income.� If the offered
sales price would cause monthly housing costs to exceed 39 percent, the sales
price shall be reduced to align with the monthly housing cost limit;

����
(ii)�� a timeframe, which
shall be no less than one year from the date in which the occupant signs the
lease agreement, in which the occupant may exercise the option to purchase the
property; and

����
(iv)� an ownership
transition process, with defined requirements for title transfer, including
compliance with escrow, inspections, and financial readiness; and

����
(3)�� be included within
the list of nonprofit community development corporations identified pursuant to
subsection h. of this section
.

���� g.��� In the case of a
foreclosed residential property, a nonprofit community development corporation,
that has a written agreement with a foreclosed upon defendant, next of kin of
the foreclosed upon defendant, or tenant of the foreclosed upon property pursuant
to subsection f. of this section, shall have a right of second refusal to
purchase the property which is subordinate to the first right of refusal
provided to a foreclosed upon defendant, next of kin of the foreclosed upon
defendant, or tenant pursuant to subsection d. of this section.�
[
If the
foreclosed upon defendant, next of kin of the foreclosed upon defendant, or
tenant decides not to participate in the sheriff's sale, enter into an
agreement with the corporation pursuant to subsection f. of this section, or
fails to secure financing or assets sufficient to meet the terms offered by the
foreclosing plaintiff or an alternative financial institution to purchase the
property, a nonprofit community development corporation shall have the right of
second refusal to purchase the property in the amount approved for the final
starting upset price on the day of the sheriff's sale at the time of the sale.
]
� Such right
shall be deemed exercised if, prior to the opening of the bidding on the
foreclosed property, the corporation pays a 3.5 percent deposit with the rest
of the balance due within 90 business days by cash, certified or cashier's
check, or by wire transfer, made payable to the sheriff of the county in which
the sale is conducted or to the Special Master, if the sheriff cannot comply
with the provisions of subparagraph (a) of paragraph (3) of subsection a. of
this section. A nonprofit community development corporation shall only have a
right of second refusal to purchase the property if it satisfies the
requirements set forth in subsection h. of this section and fulfills the
conditions set forth in subsection j. of this section.

���� h. (1) If a foreclosed upon
defendant, next of kin of the foreclosed upon defendant, or tenant of the
foreclosed upon property does not participate in the sheriff's sale, secure
financing or assets sufficient to meet the terms offered by the foreclosing plaintiff
or an alternative financial institution, or enter into agreement with a
nonprofit community development corporation pursuant to subsection f. of this
section, the nonprofit community development corporation may enter a bid for
the foreclosed upon residential property.�

���� (2)��
(a) The Department of
Community Affairs shall establish a list of nonprofit community development
corporations that are eligible to enter a bid for a foreclosed upon residential
property pursuant to this section, which the department shall update quarterly
each year.� To be included within the list, a nonprofit community development
corporation shall be in existence for 48 months, meet the definition of a State
community housing development organization pursuant to subparagraph (d) of this
paragraph, and submit the following materials to the department:

����
(i)��� the most recent form
990 that the nonprofit community development corporation provided to the United
States Internal Revenue Service;

����
(ii)�� letters of reference
from at least three other nonprofit community development corporations;

����
(iii)� a signed statement
from the chief executive officer of the nonprofit community development
corporation confirming that none of board members of the corporation have been
found liable of a housing violation or violation pursuant to P.L.1960, c.39
(C.56:8-1 et seq.) within the past 10 years;

����
(iv)� an affidavit signed
by the executive director and president of the board of directors, or
equivalent, of the nonprofit community development corporation that names any
representatives that are authorized to bid on behalf of the corporation during
the sheriff�s sale.� The authorized representatives may be an employee or a
board member of the corporation; and

����
(v)�� any other information
that the department deems necessary.

����
(b)�� A nonprofit community
development corporation that is not included in the department�s list pursuant
to this paragraph shall be prohibited from entering a bid in a sheriff�s sale
pursuant to this section.� A corporation that is included within the list pursuant
to this paragraph shall be required to provide the materials submitted pursuant
to subparagraph (a) of this paragraph once each year to the department to
maintain eligibility within the list.� A corporation shall inform the
department if there are material changes to the items provided pursuant to
subparagraph (a) of this paragraph.�

����
(c)�� The department shall
publish and maintain the list of eligible nonprofit community development
organizations established pursuant to this paragraph on its Internet website.

����
(d)�� A nonprofit community
development corporation shall not be included among the list of eligible
nonprofit community development corporations pursuant to this paragraph if the
corporation is not a State community housing development organization
designated by the Department of Community Affairs.� To be designated by the
department as a State community housing development organization, a corporation
shall:

����
(i)��� be a not-for-profit
organization established under the laws of this State;

����
(ii)�� have a purpose for
the provision of housing that is affordable to low-income and moderate-income
individuals, as evidenced in the organization�s charter, articles of
incorporation, resolutions, or by-laws;

����
(iii)� demonstrate a
history and capacity to develop affordable housing in the communities where the
organization serves; and

����
(iv)� fulfill any other
requirements as the department deems necessary.

����
The Department of Community
Affairs, pursuant to the �Administrative Procedure Act,� P.L.1968, c.410
(C.52:14B-1 et seq.), shall adopt rules and regulations to effectuate the
provisions of this subparagraph.

����
(3)
��
[
A
]

In
addition to the requirements established pursuant to paragraph (2) of this
subsection, a
nonprofit community development corporation intending to bid
in a sheriff's sale for residential property
[
and
pay a 3.5 percent deposit
]

as permitted by this section shall, on the date of the sheriff's sale, register
its participation with the sheriff or Special Master if the sheriff cannot
comply with the provisions of paragraph (3) of subsection a. of this section.�
In registering its participation in the sale, a corporation shall provide
[
the most
recent form 1023 filing provided to the United States Internal Revenue Service,
stating the corporation's mission includes community revitalization and the
creation or preservation of affordable housing through the restoration of
vacant and abandoned property
]

a watermarked certificate from the Department of Community
Affairs, in a form and manner prescribed by the department, that confirms that
the corporation is currently on the department�s list of eligible nonprofit
community development corporations pursuant to paragraph (2) of subsection h.
of this section.� The watermarked certificate shall also list the name of the
corporation�s authorized representatives.� A sheriff or Special Master may
request additional information from the nonprofit community development
corporation as necessary to confirm the corporation�s nonprofit status.� Each
sheriff�s office shall consult the list of eligible nonprofit community
development corporations pursuant to paragraph (2) of this subsection before
permitting a nonprofit to bid. The sheriff or Special Master may share the
information it has received from the nonprofit community development
corporation pursuant to this subsection with other county sheriff�s offices as
necessary to effectuate the provisions of this section
.

���� i. (1)
[
If more than
one nonprofit community development corporation seeks to exercise the right of
second refusal, the right shall belong in the first instance to a nonprofit
community development corporation that fulfills the conditions set forth in
subsection f. of this section.� If no such nonprofit community development
corporation exists, priority shall belong to the nonprofit community
development corporation that first registers its participation in the
foreclosure sale pursuant to paragraph (2) of subsection h. of this section.
]
(
Deleted
by amendment, P.L.��� , c.�� ) (pending before the Legislature as this bill).

���� (2)�� If an individual or
nonprofit community development corporation exercises a right of first or
second refusal
, as appropriate,
pursuant to subsection d. or f. of this
section, the foreclosure sale shall be deemed concluded and the person or
corporation shall be deemed to be the successful bidder and shall be subject to
the applicable provisions and procedures of this section.

����
(3)�� A nonprofit community
development corporation that is included on the department�s eligibility list
and bids in a sheriff's sale for a foreclosed residential property pursuant to
this section shall be limited to purchasing one foreclosed residential property
in any given county per month, with a maximum of two properties purchased
within the State per month.� The provisions of this paragraph shall not apply
to a nonprofit community development corporation that purchases a foreclosed
residential property pursuant to subsection f. of this section.

���� j. (1) A nonprofit community
development corporation that successfully bids on the purchase of a residential
property in a sheriff's sale and satisfies the conditions set forth in
subsection h. of this section shall be subject to the fines assessed pursuant
to paragraph (3) of this subsection if the nonprofit corporation does not:

���� (a)�� restore as need be and
sell the property to a household earning no more than 120 percent
[
below
]

of
area median income or rent the property as an affordable housing unit
to a household
[
who
earns
]

earning
no more than
[
100
]

80

percent
[
below
]

of

area median income, if the property is vacant or abandoned at the time of the
sheriff's sale; or

���� (b)�� if the property is
occupied at the time of sale by either a tenant or the foreclosed upon
defendant with whom the nonprofit community development corporation does not
already have an agreement pursuant to subsection f. of this section, the
nonprofit community development corporation shall negotiate in good faith with
the foreclosed upon defendant or tenant on an affordable lease schedule that
will allow the foreclosed upon defendant or tenant to continue to occupy the
property should the foreclosed upon defendant or tenant desire to do so.� If
after 120 business days the foreclosed upon defendant or tenant does not
respond to the requests of the nonprofit community development corporation to
negotiate, the corporation may bring an action in a court of competent
jurisdiction to remove the foreclosed upon defendant or tenant.� If removal has
successfully occurred, the nonprofit community development corporation shall
comply with the requirements of subparagraph (a) of paragraph (1) of this
subsection.

����
When complying with this
paragraph, a nonprofit community development corporation shall be compliant
with P.L.2024, c.2 (C.52:27D-304.1 et al.).

���� (2)�� A nonprofit community
development corporation that successfully bids on the purchase of a residential
property and satisfies the conditions set forth in subsection f. of this
section shall
[
ensure
that, in any future sale of the property pursuant to subparagraph (a) of
paragraph (1) of this subsection, the property be subject to a renewable deed
restriction, with the minimum number of affordability years being 30 years and
with the option to renew, requiring any future property owner to sell the
property to a household earning no more than 120 percent below area median
income or rent the property as an affordable housing unit to a household who
earns no more than 100 percent below area median income
]

not be
subject to the renewable deed restriction pursuant to paragraph (9) of
subsection a. of this section if the foreclosed upon defendant, next of kin of
the foreclosed upon defendant, or tenant of the foreclosed upon property decide
to exercise the option to purchase the property pursuant to subsection f. of
this section
.

���� (3)��
[
A
]

The board
and executive officers of a
nonprofit community development corporation
that successfully bids on and completes the purchase of a residential property
in a sheriff's sale
[
and
satisfies the conditions set forth in subsection f. of this section
]
and fails to
meet the requirements of this subsection shall be assessed a fine by a court of
competent jurisdiction of up to $100,000
[
for
the first violation, and $500,000 thereafter for each subsequent violation
]
.� The
corporation shall also be prohibited from bidding on a subsequent foreclosed
upon residential property under this section in perpetuity
.� If
[
the
appropriate sheriff's office, county administrative agent, or affordable
housing administrative agent that is hired by the county determines based upon
its oversight that
]

there has been a violation of this subsection, the
[
sheriff's office, county
administrative agent, or affordable housing administrative agent shall
]

administrative
agent for the municipality in which the residential property is located, the
municipal housing liaison, or the Attorney General or the Attorney General�s
designee shall
bring an action in a court of competent jurisdiction
[
so that the
sheriff's office, county administrative agent, or affordable housing
administrative agent can
]

to
pursue enforcement
[
of
penalties
]

for the violation.� If the nonprofit community development corporation
dissolves, the deed of the residential property shall be transferred to another
nonprofit community development corporation who shall be bound by the
requirements of this subsection.

����
(4)�� The Department of
Community Affairs shall deny or remove a nonprofit community development
corporation that fails to meet the requirements of this subsection from the
list of approved nonprofits pursuant to paragraph (2) of subsection h. of this
section.

���� k.��� In the case of a
residential property for which the successful bidder is subject to the
occupancy requirement pursuant to paragraphs (7) and (8) of subsection e. of
this section, the
[
appropriate
sheriff's office, county administrative agent or affordable housing
administrative agent that is hired by the county shall oversee the occupancy of
the property, which may include the mailing of a questionnaire to the
successful bidder
]

deed restriction pursuant to paragraph (7) of subsection e. of this section
shall require a lien that does not permit the sale of the property
within�
84 months following the sale

[
or
requiring the bidder to respond to questions and
]

of the property.
�
If
residency of the property is challenged by the administrative agent for the
municipality in which the residential property is located or the municipal
housing liaison during the 84 month residency requirement period, the
successful bidder may
submit documentation evidencing the bidder's
continued residence at the property using the proof of residency documents
provided pursuant to paragraph (5) of subsection e. of this section
to the
administrative agent or municipal housing liaison
.� If the
[
appropriate
sheriff's office, county administrative agent, or affordable housing
administrative agent that is hired by the county
]

administrative agent or
municipal housing liaison
determines based upon its oversight that there
has been an occupancy violation, the
[
sheriff's
office, county administrative agent , or affordable housing administrative
agent hired by the county
]

administrative agent or municipal housing liaison
shall refer the matter
to the
[
county
counsel's office
]

Attorney General or the Attorney General�s designee
to bring an action
in a court of competent jurisdiction
[
so
that the sheriff's office can
]

to
pursue enforcement of penalties for the violation.

���� l.���� Each sheriff's office
shall maintain information, written in plain language, regarding the program to
finance the purchase of residential property in a foreclosure sale in
accordance with this section on its Internet website, and in any other medium
used by the office to advertise a foreclosure sale, in a manner that is
accessible to the public.� Additionally, each sheriff's office shall display
information, written in plain language, regarding the Community Wealth
Preservation Program in its office in a manner that is conspicuous to the
public.� The information posted on a sheriff's Internet website or displayed in
a sheriff's office concerning the program shall further contain language
notifying the public that the program shall exclude those purchasing property
for investment purposes.� For any county in which the primary language of 10
percent or more of the residents is a language other than English, the
sheriff's office shall provide the information required by this subsection in
that other language or languages in addition to English.� The alternate
language shall be determined based on information from the latest federal
decennial census.

���� m.�� Any sheriff's sales
conducted virtually shall be subject to the provisions of P.L.2023, c.255
(C.2A:50-56a et al.).

���� n.��� Any penalty imposed
pursuant to this section may be recovered with costs in a summary proceeding
commenced by the
[
appropriate
sheriff's office
]

Attorney General or the Attorney General�s designee
pursuant to the
"Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et
seq.).� Fifty percent of any monies collected pursuant to this section shall be
forwarded to the municipality in which the foreclosed upon property is located
to be deposited in the affordable housing trust fund of the municipality for
use on low income housing or moderate income housing needs as defined in
section 4 of P.L.1985, c.222 (C.52:27D-304), to the extent the municipality
maintains such a fund, and if the municipality does not maintain such a fund,
to the State Treasurer, and shall annually be appropriated to the "New
Jersey Affordable Housing Trust Fund," section 20 of P.L.1985, c.222
(C.52:27D-320) for the purpose of developing and supporting housing programs
that create for-sale and rental affordable housing.�
[
The remaining 50
]

Twenty

percent of any monies collected pursuant to this section shall provide for
administrative and enforcement costs
[
,
including costs
]

incurred by the
[
appropriate
sheriff's office, county administrative agent, or county counsel's office
]

municipality
in which the foreclosed upon property is located and an additional 20 percent
of any monies collected shall provide for administrative and enforcement costs
incurred by the Attorney General or the Attorney General�s designee
,
as
is
necessary to effectuate the purposes of this section.�
Five percent
of any monies collected pursuant to this section shall provide for
administrative and enforcement costs incurred by the appropriate sheriff�s
office to effectuate the purposes of this section, and the remaining five
percent of any monies collected shall provide for administrative costs incurred
by the Department of Community Affairs for maintaining the list of nonprofit
community development corporations established pursuant to subsection h. of
this section.

���� o.��� The provisions of
P.L.2023, c.255 (C.2A:50-56a et al.) shall only apply to residential property
as defined pursuant to subsection
[
p.
]

s.
of
this section.

���� p.���
(1)� Each sheriff�s
office shall collect on a monthly basis information concerning the number of
participants utilizing the Community Wealth Preservation Program as a
foreclosed upon defendant, next of kin of the foreclosed upon defendant,
tenant, nonprofit community development corporation, or bidder intending to
occupy the foreclosed residential property for 84 months.� The information
collected shall be forwarded to the Department of Community Affairs and shall
be made publicly available on the Internet website of the department.� The
information collected shall also be forwarded to the township attorneys of the
municipalities in which the foreclosed residential properties are located, the
administrative agents of the municipalities, and municipal housing liaisons, if
required by P.L.2024, c.2 (C.52:27D-304.1 et al.).

����
(2)�� When providing
information concerning the number of nonprofit community development
corporations using the Community Wealth Preservation Program to the Department
of Community Affairs, each sheriff�s office shall also provide to the
department the address of the property purchased by the nonprofit community
development program, the date that the property was purchased, and the winning
bid for the property, if applicable.� The department shall publish the
information provided pursuant to this paragraph with its list of eligible
nonprofit community development corporations established pursuant to paragraph
(2) of subsection h. of this section.

����
q.��� The provisions of
this section shall not affect P.L.2001, c.117 (C.12A:9-101 et seq.).

����
r.���� A nonprofit
community development corporation shall be prohibited from using P.L.2023,
c.255 (C.2A:50-64a et al.) until P.L.��� , c.�� (C.������� ) (pending before
the Legislature as this bill) is in effect.

����
s.
���� As used in this
section:

���� "Area median income"
means the midpoint of a region's household income distribution, as determined
by the United States Department of Housing and Urban Development.

���� "Community Wealth
Preservation Program" means the program created by P.L.2023, c.255
(C.2A:50-56a et al.) to assist prospective owner-occupants, nonprofit community
development corporations, foreclosed upon defendants, next of kin of foreclosed
upon defendants, and tenants of foreclosed upon defendants in purchasing and
financing foreclosed upon residential properties in sheriff's sales with an
initial 3.5 percent deposit.

����
�Next of kin� means an
adult individual who is entitled to receive the foreclosed residential property
under the foreclosed upon defendant�s will and has a signed affidavit from the
foreclosed upon defendant stating that the individual is allowed to bid for the
property.� In the absence of a will and signed affidavit, �next of kin� means
an adult relative of the foreclosed upon defendant that is entitled to inherit
the foreclosed residential property pursuant to N.J.S.3B:5-3 through
N.J.S.3B:5-14.

���� "Nonprofit community
development corporation" means a not-for-profit organization,
designated
as a State community housing development organization and incorporated for at
least 48 months,
whose mission
, as indicated in the corporation�s most
recent form 990 filing provided to the United States Internal Revenue Service,

includes
:

����
(1)�� the construction of
affordable housing;

����
(2)
�� community
revitalization through the restoration of vacant and abandoned property to
create or preserve affordable housing
[
,
as indicated in the corporation's most recent form 1023 filing provided to the
United States Internal Revenue Service
]

; or

����
(3)�� the preservation of
farmed, historic, or open land
.

���� "Residential
property" means real property located in this State which is utilized as a
primary residence
[
or
]
,

dwelling,
or open or farmed land,
and shall not include any real
property which is acquired for investment, commercial, or business purposes or
real property containing more than four residential units.

����
�Right of redemption� means
a period of time in which a foreclosed upon defendant may retain ownership of
the defendant�s foreclosed upon residential property after a sheriff�s sale.

���� "Upset price"
or
�minimum bid�
means the minimum amount that a foreclosed upon property
shall be sold for in a sheriff's sale as determined by the foreclosing
plaintiff
, and shall include amounts due to junior lienholders
.

(cf: P.L.2023, c.255, s.1)

���� 2.��� This act shall take
effect on the 90th day next following enactment, except that the Department of
Community Affairs may take any anticipatory administrative action in advance as
is necessary for the implementation of this act.

STATEMENT

���� This bill revises oversight of
the �Community Wealth Preservation Program� and requirements for nonprofit
community development corporations.

���� Under the bill, a nonprofit
community development corporation with a written agreement to purchase a
foreclosed upon residential property for the foreclosed upon defendant, next of
kin of the foreclosed upon defendant, or tenant of that foreclosed upon property
will be subject to a 30-year renewable deed restriction requiring the nonprofit
and any future owners to sell the property to a household earning no more than
120 percent of area median income and spending no more than 35 percent of gross
monthly income on the mortgage, property taxes, interest, and home insurance of
the property or, if the nonprofit or future owners decide to rent the property,
rent the property to a household earning no more than 80 percent of area median
income and spending no more than 35 percent of gross monthly income on rent.�

���� The bill also provides a
formula for future owners that are still subject to the deed restriction to
determine the future sales price of the property.� Nonprofits and future owners
subject to the deed restriction will additionally be subject to State affordable
housing laws and regulations.� Despite the deed restriction above, a nonprofit
with a written agreement to purchase the property for a foreclosed upon
defendant, next of kin of the foreclosed upon defendant, or tenant will not be
subject to the deed restriction language if the foreclosed upon defendant, next
of kin of the foreclosed upon defendant, or tenant decide to purchase the
property back from the nonprofit.

���� The bill provides that a
sheriff�s office will now be required to, within 90 days of the date of a
sheriff�s sale, deliver a fully executed deed to the successful bidder at the
sale. Current law requires a sheriff�s office to deliver a fully executed deed
to the successful bidder of a sheriff�s sale within two weeks of the date of
sale.� The bill additionally extends the statutory right of redemption for
foreclosed upon defendants to within 90 days of the date of the sheriff�s sale,
instead of 10 days after the date of sale as currently provided.

���� The bill additionally removes
the right of first of refusal for tenants of the foreclosed upon property to
purchase the property and removes the right of second refusal for nonprofit
community development corporations that do not have a written agreement to
purchase the property for the foreclosed upon defendant, next of kin of the
foreclosed upon defendant, or tenant of the foreclosed upon property.� The bill
also requires successful individual bidders who will occupy the foreclosed upon
residential property for 84 months to be subject to a deed restriction that
outlines the requirements that successful individual bidders must follow.

���� The bill provides new
requirements for nonprofit community development corporations that agree in
writing to purchase a foreclosed upon residential property for a foreclosed
upon defendant, next of kin of the foreclosed upon defendant, or tenant of the
foreclosed upon property.� Nonprofits will now be required to negotiate with
the foreclosed upon defendant, next of kin of the foreclosed upon defendant, or
tenant on a lease agreement that must include the following:

���� (1)�� an affordability
benchmark that will require lease payments to be set within a reasonable
percentage of the occupant�s verified monthly income, not to exceed 39 percent
of total household income;

���� (2)�� lease payments that are
set at a fixed-rate or indexed to inflation, with a maximum increase of no more
than two percent per year;

���� (3)�� a lease schedule of a
minimum of 12 months, with renewal options and clear conditions for
termination;

���� (4)�� eviction protection
clauses for occupants who comply with lease obligations; and

���� (5)�� an option to purchase
the property from the corporation, which must include:

���� (a)�� the purchase price,
including the total sales price broken down into the monthly principal,
interest, taxes, and insurance. The total monthly housing cost must be
comprised of the principal, interest, taxes, and insurance, and must not exceed
39 percent of the household�s total monthly income.� If the offered sales price
would cause monthly housing costs to exceed 39 percent, the sales price will be
reduced to align with the monthly housing cost limit;

���� (b)�� a timeframe, which must
be no less than one year from the date in which the occupant signs the lease
agreement, in which the occupant may exercise the option to purchase the
property; and

���� (c)�� an ownership transition
process, with defined requirements for title transfer, including compliance
with escrow, inspections, and financial readiness.

���� Under the bill, a nonprofit
community development corporation that decides to independently bid for a
foreclosed upon residential property or purchase a foreclosed upon property on
behalf of a foreclosed upon defendant, next of kin of the foreclosed upon
defendant, or tenant of the foreclosed upon property will be required to be
included within a list of nonprofit community development corporations
established by the Department of Community Affairs before it can purchase a
foreclosed upon property.� To be included within the department�s list, the
nonprofit must be in existence for 48 months, meet the provided definition of a
State community housing development organization, and submit the following
materials to the department:

���� (1)�� the most recent form 990
that the nonprofit community development corporation provided to the United
States Internal Revenue Service;

���� (2)�� letters of reference
from at least three other nonprofit community development corporations;

���� (3)�� a signed statement from
the chief executive officer of the nonprofit community development corporation
confirming that none of board members of the corporation have been found liable
of a housing violation or violation pursuant to the �Consumer Fraud Act� within
the past 10 years;

���� (4)�� an affidavit signed by
the executive director and president of the board of directors, or equivalent,
of the nonprofit community development corporation that names any
representatives that are authorized to bid on behalf of the corporation during
the sheriff�s sale.� The authorized representatives may be an employee or a
board member of the corporation; and

���� (5)�� any other information
that the department deems necessary.

A nonprofit community development
corporation that is not included in the department�s list pursuant to this
paragraph will be prohibited from entering a bid in a sheriff�s sale.� A
corporation that is included within the list pursuant to this bill will be
required to provide the materials required pursuant to this bill once each year
to the department to maintain eligibility within the list.� A corporation must
inform the department if there are material changes to the items provided to
the department.� The department will be required to publish and maintain the
list of eligible nonprofit community development organizations on its Internet
website.

���� The bill further provides that
a nonprofit community development corporation intending to bid in a sheriff�s
sale for a foreclosed upon residential property will be required to provide to
the sheriff on the date of sale with a watermarked certificate from the
Department Community Affairs confirming that the nonprofit is on the
department�s list of eligible nonprofit community development corporations.�
Each sheriff�s office will be required to consult the list of eligible
nonprofit community development corporations established by the department
before permitting a nonprofit to bid.

���� The bill provides that a
nonprofit community development corporation that is included on the
department�s list of eligible nonprofit community development corporations will
be limited to purchasing one foreclosed residential property in any given
county per month, with a maximum of two properties purchased within the State
per month.� The aforementioned limits will not apply to a nonprofit that
purchased a foreclosed residential property on behalf of a foreclosed upon
defendant, next of kin of the foreclosed upon defendant, or tenant of the
foreclosed upon property.� The bill also revises requirements for nonprofits
that independently bid on foreclosed upon residential properties and revises
fines and enforcement provisions for nonprofits and successful individual
bidders that fail to meet the requirements of the �Community Wealth
Preservation Program.�� The bill additionally includes new reporting
requirements for sheriff�s offices, revises the definition of �nonprofit
community development corporation,� and includes a new definition for the term
�next of kin.�