Firm Prevails in New Jersey Supreme Court Real Estate Tax Appeal


Congratulations to partner Glenn R. Reiser on his monumental victory before the New Jersey Supreme Court. In a unanimous opinion issued on January 9, 2025, the Court declared New Jersey's former version of the Tax Sale Law unconstitutional. The ruling enables the firm's client, an elderly man, to avoid foreclosure of his valuable mixed-use commercial property with an approximate $500,000 equity cushion.

Prior to engaging our firm, the client had lost title to his property due to what started out as as $606 of unpaid sewer tax liens but which had ballooned to more than $40,000 a number of years later. We successfully petitioned the trial court to vacate the tax sale plaintiff's judgment, arguing that the tax plaintiff should not receive a windfall in excess of several hundred thousand dollars to our client's detriment and prejudice. Th trial court agreed and vacated the judgment conditioned on our client satisfying the unpaid tax liens and plaintiff's counsel fees. Our client successfully paid these amounts and the title was restored in his name.

Plaintiff appealed the decision to the Appellate Division. While the appeal was pending, the United States Supreme Court issued a decision (Tyler v. Hennepin County) declaring that a Minnesota taxing authority's actions in seizing private property to satisfy a $15,000 tax lien while retaining $25,000 of equity over and above the tax lien violated the Takings Clase of the Fifth Amendment prohibiting the taking of private property without payment of just compensation. Relying on Tyler, the Appellate Division declared New Jersey's Tax Sale Law unconstitutional and affirmed the trial court's decision to vacate the judgment under New Jersey Court Rule 4:50-1(f), finding there was no abuse of discretion by the trial judge.

Shortly after the Appellate Division's ruling, the New Jersey Legislature amended the Tax Sale Law by, among other provisions, providing homeowners with the ability to preserve their equity by requiring a judicial sale (either by sheriff or through the Internet) in cases where the property owner files a contesting answer citing substantial equity.

In its decision issued today, the New Jersey Supreme Court affirmed the Appellate Division's ruling with respect to the impact of the Tyler decision, declaring New Jersey's prior version of the Tax Sale law unconstitutional, thereby enabling our client to retain ownership of his property.

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