Requires creditors to maintain interior of vacant and abandoned residential property under foreclosure.

A4211

ASSEMBLY, No. 4211

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblywoman� CAROL A. MURPHY

District 7 (Burlington)

SYNOPSIS

���� Requires creditors to maintain interior of vacant and
abandoned residential property under foreclosure.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

requiring creditors to maintain the interior of
vacant and abandoned residential property under foreclosure and amending
P.L.2021, c.444 and P.L.2008, c.127.

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

���� 1.� Section 2 of P.L.2021,
c.444 (C.40:48-2.12s2) is amended to read as follows:

���� 2.� a.� (1)� A creditor
serving a summons and complaint in an action to foreclose on a mortgage on
commercial property in the State shall, within 10 days of serving the summons
and complaint, notify the municipal clerk and the mayor or other chief executive
officer of the municipality in which the property is located that a summons and
complaint in an action to foreclose on a mortgage has been filed against the
subject property.� The notice shall contain the full name, address, and
telephone number for the representative of the creditor who is responsible for
receiving complaints of property maintenance and code violations and the full
name and contact information for any person or entity retained by the creditor
or a representative of the creditor to be responsible for any care,
maintenance, security, or upkeep of the property.� The notice may contain
information about more than one property, and shall be provided by mail or
electronic communication, at the discretion of the municipal clerk.� In the event
the creditor that has served a summons and complaint in an action to foreclose
on a commercial property that is located out-of-State, the notice shall also
contain the full name, address, and telephone number of an in-State
representative or agent who shall be responsible for the care, maintenance,
security, and upkeep of
[
the
exterior of
]

the property if it becomes vacant and abandoned.� If the municipality has
designated or appointed a public officer pursuant to P.L.1942, c.112
(C.40:48-2.3 et seq.), the municipal clerk shall forward a copy of the notice
to the public officer or shall otherwise provide it to any other local official
responsible for administration of any property maintenance or public nuisance
code.� The notice shall also include the street address, lot, and block number
of the property.

���� If there is any change in the
name, address, or telephone number for a representative, agent, or individual
authorized to accept service on behalf of a creditor required to be provided in
a notice pursuant to this paragraph following the filing of the summons and
complaint, the creditor shall provide a notice to the applicable municipal
clerk containing the updated name, address, or telephone number within 10 days
of the change in that information.

���� (2)�� Within 30 days following
the effective date of P.L.2021, c.444 (C.40:48-2.12s1 et al.), any creditor
that has initiated a foreclosure proceeding on any commercial property that is
pending in Superior Court shall provide to the municipal clerk of the municipality
in which the property is located, a listing of all commercial properties in the
municipality for which the creditor has foreclosure actions pending by street
address and lot and block number.� If the municipality has designated or
appointed a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.),
the municipal clerk shall forward a copy of the notice to the public officer,
or shall otherwise provide it to any other local official responsible for
administration of any property maintenance or public nuisance code.

���� b.��� If the owner of a
commercial property vacates or abandons any property on which a foreclosure
proceeding has been initiated or if a commercial property becomes vacant at any
point subsequent to the creditor's filing the summons and complaint in an
action to foreclose on a mortgage against the subject property, but prior to
vesting of title in the creditor or any other third party, and
[
the exterior
of
]

the property is found to be a nuisance or in violation of any applicable State
or local code, the local public officer, municipal clerk, or other authorized
municipal official shall notify the creditor or the representative or agent of
an out-of-State creditor, as applicable, which shall have the responsibility to
abate the nuisance or correct the violation in the same manner and to the same
extent as the title owner of the property, to such standard or specification as
may be required by State law or municipal ordinance.� The municipality shall
include a description of the conditions that gave rise to the violation with
the notice of violation and shall provide a period of not less than 30 days
from the creditor's receipt of the notice for the creditor to remedy the
violation.� If the creditor fails to remedy the violation within that time
period, the municipality may impose penalties allowed for the violation of
municipal ordinances.

���� c.���� If the municipality
expends public funds in order to abate a nuisance or correct a violation on a
commercial property in situations in which the creditor was given notice
pursuant to the provisions of subsection b. of this section but failed to abate
the nuisance or correct the violation as directed, the municipality shall have
the same recourse against the creditor as it would have against the title owner
of the property, including, but not limited to, the recourse provided under
section 23 of P.L.2003, c.210 (C.55:19-100).

���� d.��� For the purposes of this
section, "creditor" means a State-chartered bank, savings bank,
savings and loan association or credit union, any person required to be
licensed under the provisions of the "New Jersey Residential Mortgage
Lending Act," sections 1 through 39 of P.L.2009, c.53 (C.17:11C-51 through
C.17:11C-89), and any entity acting on behalf of the creditor named in the debt
obligation including, but not limited to, servicers.� For purposes of this
section, a creditor shall not include the State, a political subdivision of the
State, or a State, county, or local government entity, or their agent or
assignee, such as the servicer.

(cf: P.L.2021, c.444, s.2)

���� 2.� Section 3 of P.L.2021,
c.444 (C.40:48-2.12s3) is amended to read as follows:

���� 3.� a.� The governing body of
any municipality may adopt ordinances to:

���� (1)� create a property
registration program for the purposes of identifying and monitoring residential
and commercial properties within the municipality for which a summons and
complaint in an action to foreclose on a mortgage has been filed;

���� (2)� regulate the care,
maintenance, security, and upkeep of
[
the
exterior of
]

vacant and abandoned residential and commercial properties for which a summons
and complaint in an action to foreclose has been filed; and

���� (3)� impose property
registration fees on the creditor of residential or commercial properties on an
annual or semi-annual basis.

���� b.��� An ordinance adopted
pursuant to subsection a. of this section shall:

���� (1)� require that the creditor
filing a summons and complaint in an action to foreclose shall, in addition to
the notice provided to the municipality pursuant to section 17 of P.L.2008,
c.127 (C.46:10B-51) or section 2 of P.L.2021, c.444 (C.40:48-2.12s2), register
the residential or commercial property with the municipality's property
registration program as a property in foreclosure and, as part of that
registration: (a) provide the municipality with the information regarding the
creditor required by paragraph (1) of subsection a. of section 17 of P.L.2008,
c.127 (C.46:10B-51) or paragraph (1) of subsection a. of section 2 of P.L.2021,
c.444 (C.40:48-2.12s2); (b) identify the date the summons and complaint in an
action to foreclose on a mortgage was filed against the subject property, the
court in which it was filed, and the docket number of the filing; and (c)
identify whether the property is vacant and abandoned in accordance with the
definition in the ordinance required by paragraph (8) of this subsection;

���� (2)� require, if there is any
change in the name, address, or telephone number for a representative, agent,
or individual authorized to accept service on behalf of a creditor required to
register pursuant to the property registration program following the filing of
the summons and complaint, the creditor shall update the property registration
program within 10 days of the change in that information;

���� (3)� require that the creditor
filing a summons and complaint in an action to foreclose shall, if the
registered property becomes vacant and abandoned in accordance with the
definition in the ordinance required by paragraph (8) of this subsection after
the property is initially registered with the municipality, update the property
registration with the municipality to reflect the change in the property's
status;

���� (4)� require that the creditor
filing a summons and complaint in an action to foreclose shall be responsible
for the care, maintenance, security, and upkeep of
[
the exterior of
]
the property
if the property is vacant and abandoned at any time while the property is
registered with the property registration program;

���� (5)� require that a creditor
located out-of-State shall be responsible for appointing an in-State
representative or agent to act for the foreclosing creditor;

���� (6)� identify any requirements
that the municipality imposes on the creditor filing a summons and complaint in
an action to foreclose on a property, that is or becomes vacant and abandoned,
relating to the care, maintenance, security, and upkeep of
[
the exterior
of
]

the property, including, but not limited to, any requirements to secure the
property against unauthorized entry, post a sign affixed to the inside of the
property and visible to the public indicating the name, address, and telephone
number of the creditor or an out-of-State creditor's in-State representative or
agent for the purpose of receiving service of process, or acquire and otherwise
maintain liability insurance by procuring a vacancy policy, covering any damage
to any person or any property caused by any physical condition of the property
while registered with the property registration program;

���� (7)� identify any fees that
may be imposed on the creditor in connection with the property registration
program that are authorized pursuant to subsection e. of this section; and

���� (8)� define that a property
shall be considered vacant and abandoned if it is not legally occupied by a
mortgagor or tenant, which is in such condition that it cannot be legally
reoccupied, because of the presence or finding of at least two of the following:

���� (a)�� overgrown or neglected
vegetation;

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

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

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

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

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

���� (g)�� the absence of
furnishings and personal items;

���� (h)�� statements of neighbors,
delivery persons, or government employees indicating that the property is
vacant and abandoned;

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

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

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

���� (l)��� 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;

���� (m)� 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;

���� (n)�� a written statement
issued by a mortgagor expressing the clear intent of all mortgagors to abandon
the property; or

���� (o)�� any other reasonable
indicia of abandonment.

���� c.���� An ordinance adopted
pursuant to subsection a. of this section shall authorize a public officer,
designated or appointed pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), or
any other local official responsible for administration of any property maintenance
or public nuisance code to issue a notice to the creditor filing the summons
and complaint in an action to foreclose, if the public officer or other
authorized municipal official determines that the creditor has violated the
ordinance.� In the case of a violation for failure to provide care,
maintenance, security, and upkeep of
[
the
exterior of
]

vacant and abandoned property, such notice shall require the person or entity
to correct the violation within 30 days of receipt of the notice, or within 10
days of receipt of the notice if the violation presents an imminent threat to
public health and safety
; provided, however, that such deadline may be
extended if a court order is required to enter a property to correct an
interior violation
.

���� d.��� A municipality may
contract with and set the compensation of a private entity, pursuant to the
"Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.),
to assist the municipality in the implementation and administration of the
property registration program established pursuant to an ordinance adopted
pursuant to subsection a. of this section.� A county or county improvement
authority may similarly contract with a private entity to assist the county or
authority in the implementation and administration of a property registration
system established for the use of a municipality with a property registration
program established pursuant to an ordinance adopted pursuant to subsection a.
of this section as well as for the use of the county or improvement authority.�
A local unit may delegate to such private entity any duties under the property
registration program, including, without limitation, identifying properties
located within the municipality that are subject to the registration
requirements of the property registration program, maintaining and updating the
property registrations for the municipality, communicating with the creditors
or the in-State representative or agent appointed by creditors located out of
State of such properties, invoicing and collecting payment from the creditors
for such properties any fees authorized by the ordinance and subsection e. of
this section, and monitoring compliance with the requirements of the
ordinance.� A local unit may conduct property registration services on behalf
of a municipality pursuant to a shared services agreement subject to the
"Uniform Shared Services and Consolidation Act," P.L.2007, c.63
(C.40A:65-1 et al.).� Property registration fees imposed pursuant to subsection
e. of this section and an ordinance adopted pursuant to subsection a. of this
section shall be considered a municipal charge pursuant to the "tax sale
law," R.S.54:5-1 et seq., regardless of whether the fees are being
collected by a third-party entity or by the municipality directly.� The Local
Finance Board of the Department of Community Affairs may adopt rules and
regulations pertaining to contracts, entered pursuant to this subsection, with
third-party entities for the implementation and administration of a property
registration program.

���� e.���� A municipality may
impose an annual fee on a creditor required to register a property pursuant to
an ordinance adopted pursuant to subsection a. of this section.� The fee shall
not exceed: (1) $500 per property annually for any property that is required to
be registered because a summons and complaint in an action to foreclose was
filed by the creditor; and (2) an additional $2,000 per property annually if
the property is vacant or abandoned pursuant to the definition in the ordinance
when the summons and complaint in an action to foreclose is filed, or becomes
vacant and abandoned pursuant to the definition in the ordinance at any time
thereafter while the property is in foreclosure.� All such annual fees and the
due dates thereof shall be identified in the ordinance adopted pursuant to
subsection a. of this section.

���� f.���� Notwithstanding the
provisions of N.J.S.40A:5-15 to the contrary, any property registration fees
imposed pursuant to subsection e. of this section and an ordinance adopted
pursuant to subsection a. of this section and collected by a third-party entity
contracted with pursuant to subsections d. and e. of this section shall be paid
over to the municipality within a timeframe specified in the contract between
the municipality and the third-party entity.� Amounts collected by the
third-party entity on behalf of the local unit shall be paid over in full to
the local unit without any amount deducted as payment for services rendered by
the third-party entity.� Once the collected fees are paid over to the local
unit, the officer charged with the custody of the general funds shall deposit
all such funds within 48 hours after the receipt thereof to the credit of the
municipality in its designated legal depository.� A third-party entity shall
collect and pay over to the municipality any interest and penalties, based upon
the rate of interest and penalties fixed by the governing body of the
municipality for late payment of property taxes, assessments, and other
municipal charges pursuant to R.S.54:4-67, for late payment of the property
registration fees imposed pursuant to subsection e. of this section and an
ordinance adopted pursuant to subsection a. of this section.� The third-party
entity shall at least once a year, or as requested by the municipal tax
collector, file a certification as may be required by the tax collector to
enforce tax liens for all unpaid property registration program fees due and
owing at the time the certification is filed.

���� g.� (1)� An out-of-State
creditor subject to an ordinance adopted pursuant to subsection a. of this
section found by the municipal court of the municipality in which the property
subject to the ordinance is located, or by any other court of competent jurisdiction,
to be in violation of the requirement to appoint an in-State representative or
agent pursuant to the ordinance shall be subject to a fine of $2,500 for each
day of the violation.� Any fines imposed on a creditor for the failure to
appoint an in-State representative or agent shall commence on the day after the
10-day period set forth in paragraph (1) of subsection a. of section 17 of
P.L.2008, c.127 (C.46:10B-51) or paragraph (1) of subsection a. of section 2 of
P.L.2021, c.444 (C.40:48-2.12s2) for providing notice to the municipal clerk
that a summons and complaint in an action to foreclose on a mortgage has been
served.

���� (2)�� A creditor subject to an
ordinance adopted pursuant to subsection a. of this section found by the
municipal court of the municipality in which the property subject to the
ordinance is located, or by any other court of competent jurisdiction, to be in
violation, excluding only a violation addressed by paragraph (1) of this
subsection, of the ordinance shall be subject to a fine of $1,500 for each day
of the violation.� Any fines imposed pursuant to this paragraph shall commence
31 days following receipt of the notice of violation, except if the violation
presents an imminent risk to public health and safety, in which case any fines
shall commence 11 days following receipt of the notice
; provided, however,
that if a court order is required to enter a property to correct an interior
violation, any fines imposed pursuant to this paragraph shall commence 31 days
following receipt of the court order, except if the violation presents an imminent
risk to public health and safety, in which case any fines shall commence 11
days following receipt of the court order
.

���� h.��� No less than 20 percent
of any money collected pursuant to subsection f. or g. of this section or an
ordinance adopted pursuant to subsection a. of this section shall be utilized
by the municipality for municipal code enforcement purposes.

���� i.���� As used in this
section:

���� "Creditor" means a
mortgagee or an agent or assignee of a mortgagee, such as the servicer, who has
filed a complaint in the Superior Court seeking to foreclose upon a residential
or commercial mortgage.� If the entity seeking to foreclose upon the
residential or commercial mortgage changes as a result of an assignment,
transfer, or otherwise after the filing of the foreclosure complaint in the
Superior Court, the new entity shall be deemed the creditor for purposes of
this section.� For purposes of this section, a creditor shall not include the
State, a political subdivision of the State, a State, county, or local
government entity, or their agent or assignee, such as the servicer.

���� "Local unit" means a
municipality, a county, or a county improvement authority or other subdivision
of a municipality or county.

(cf: P.L.2021, c.444, s.3)

���� 3.��� Section 17 of P.L.2008,
c.127 (C.46:10B-51) is amended to read as follows:

���� 17.� a.� (1)� A creditor
serving a summons and complaint in an action to foreclose on a mortgage on
residential property in this State shall, within 10 days of serving the summons
and complaint, notify the municipal clerk and the mayor or other chief executive
officer of the municipality in which the property is located that a summons and
complaint in an action to foreclose on a mortgage has been filed against the
subject property.� The notice shall contain the full name, address, and
telephone number for the representative of the creditor who is responsible for
receiving complaints of property maintenance and code violations and the full
name and contact information for any person or entity retained by the creditor
or a representative of the creditor to be responsible for any care,
maintenance, security or upkeep of the property.� The notice may contain
information about more than one property, and shall be provided by mail or
electronic communication, at the discretion of the municipal clerk.� In the
event the creditor that has served a summons and complaint in an action to
foreclose on a residential property is located out-of-State, the notice shall
also contain the full name, address, and telephone number of an in-State
representative or agent who shall be responsible for the care, maintenance,
security, and upkeep of
[
the
exterior of
]

the property if it becomes vacant and abandoned.� If the municipality has
appointed a public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.),
the municipal clerk shall forward a copy of the notice to the public officer or
shall otherwise provide it to any other local official responsible for
administration of any property maintenance or public nuisance code.

���� In the event that the property
being foreclosed on is an affordable unit pursuant to the "Fair Housing
Act," P.L.1985, c.222 (C.52:27D-301 et al.), then the creditor shall
identify that the property is subject to the "Fair Housing Act."

���� The notice shall also include
the street address, lot and block number of the property, and the full name,
address, and telephone number of an individual located within the State who is
authorized to accept service on behalf of the creditor.� The notice shall be
provided to the municipal clerk and the mayor or other chief executive officer
within 10 days of service of a summons and complaint in an action to foreclose
on a mortgage against the subject property.

���� If there is any change in the
name, address, or telephone number for a representative, agent, or individual
authorized to accept service on behalf of a creditor required to be provided in
a notice pursuant to this paragraph following the filing of the summons and
complaint, the creditor shall provide a notice to the applicable municipal
clerk containing the updated name, address, or telephone number within 10 days
of the change in that information.

���� (2)�� Within 30 days following
the effective date of P.L.2009, c.296 (C.2A:50-69 et al.), any creditor that
has initiated a foreclosure proceeding on any residential property which is
pending in Superior Court shall provide to the municipal clerk of the municipality
in which the property is located, a listing of all residential properties in
the municipality for which the creditor has foreclosure actions pending by
street address and lot and block number.� If the municipality has appointed a
public officer pursuant to P.L.1942, c.112 (C.40:48-2.3 et seq.), the municipal
clerk shall forward a copy of the notice to the public officer, or shall
otherwise provide it to any other local official responsible for administration
of any property maintenance or public nuisance code.

���� b.��� If the owner of a
residential property vacates or abandons any property on which a foreclosure
proceeding has been initiated or if a residential property becomes vacant at
any point subsequent to the creditor's filing the summons and complaint in an
action to foreclose on a mortgage against the subject property, but prior to
vesting of title in the creditor or any other third party, and
[
the exterior
of
]

the property is found to be a nuisance or in violation of any applicable State
or local code, the local public officer, municipal clerk, or other authorized
municipal official shall notify the creditor or the representative or agent of
an out-of-State creditor, as applicable, which shall have the responsibility to
abate the nuisance or correct the violation in the same manner and to the same
extent as the title owner of the property, to such standard or specification as
may be required by State law or municipal ordinance.� The municipality shall
include a description of the conditions that gave rise to the violation with
the notice of violation and shall provide a period of not less than 30 days
from the creditor's receipt of the notice for the creditor to remedy the
violation
, which time period may be extended if a court order is required to
enter a property to correct an interior violation
.� If the creditor fails
to remedy the violation within that time period, the municipality may impose penalties
allowed for the violation of municipal ordinances pursuant to R.S.40:49-5
;
provided, however, that if a court order is required to enter a property to
correct an interior violation, any fines imposed pursuant to this subsection
shall commence not less than 31 days following receipt of the court order
.

���� c.���� If the municipality
expends public funds in order to abate a nuisance or correct a violation on a
residential property in situations in which the creditor was given notice
pursuant to the provisions of subsection b. of this section but failed to abate
the nuisance or correct the violation as directed, the municipality shall have
the same recourse against the creditor as it would have against the title owner
of the property, including but not limited to the recourse provided under
section 23 of P.L.2003, c.210 (C.55:19-100).

���� d.��� A creditor that
institutes a foreclosure proceeding on residential property pursuant to the
"Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et seq.), shall
file with the summons and complaint in Superior Court, and with the lis pendens
filed with the office of the county clerk or register of deeds and mortgages,
the following information:

���� (1)�� the full name, address,
and telephone number for the representative of the creditor and any servicer
who is responsible for receiving complaints of property maintenance and code
violations pursuant to subsection b. of this section;

���� (2)�� if the creditor or
servicer is located out-of-State, the full name, address, and telephone number
of an in-State representative or agent who shall be responsible for the care,
maintenance, security, and upkeep of the property if it becomes vacant and abandoned
; and

���� (3)�� if there is any change
in the information required to be filed pursuant to paragraph (1) or (2) of
this subsection following the filing of the summons and complaint or the lis
pendens, the updated name, address, or telephone number, to be filed with the Superior
Court, the office of the county clerk or register of deeds and mortgages, and
all other parties, within 10 days of the change in that information.

(cf: P.L.2019, c.66, s.2)

���� 4.��� This act shall take
effect immediately.

STATEMENT

���� This bill would require
creditors to maintain the interior of vacant and abandoned residential property
under foreclosure.� Current law only requires creditors to maintain the
exterior of vacant and abandoned residential property under foreclosure.� The interiors
of vacant and abandoned residential properties present a host of serious
maintenance issues to neighbors.� For instance, mold, vermin, and fire hazards
can easily affect neighbors, particularly in the case of attached housing.�
This bill would extend creditors� responsibility to maintain vacant and
abandoned residential property under foreclosure to include the interior of
such property in order to protect neighbors and to prevent municipalities from
bearing such maintenance costs.

���� The bill would also allow
municipalities to adopt ordinances providing for a fine of $1,500 for each day
a maintenance violation concerning the interior of a vacant and abandoned
residential property under foreclosure goes uncorrected following a 30-day window
to correct, or a 10-day window to correct in the case of an imminent threat to
public health and safety.� Current law only allows municipalities to adopt
ordinances providing for such penalties with respect to the exterior of vacant
and abandoned residential property under foreclosure.

���� Under the bill, the deadlines
for correcting interior violations may be extended if a court order is needed
to enter a property to make such corrections.