Recent Blog Posts

• Short Sales When Loans Exceed the Value of a Home
  What is a short sale?  This a term which is being used with increasing frequency in today’s real estate market. A short sale is when the proceeds from the sale of a home are not sufficient to fully pay off all outstanding debts which are secured by the property (mortgages) after first deducting the homeowner’s costs of selling the property.  In such instances, the selling homeowner can either bring funds to closing to make up the difference, or obtain approval from his mortgage holders to accept a reduced amount to satisfy his outstanding loans.  Unless a homeowner is able to pay off all of the mortgages which are secured by his property, the homeowner will not be able to convey good title to a buyer.  If the homeowner is unable to obtain a sales price which enables him to pay off all loans and closing costs, and he does not have the funds to make up the difference, then he may want to try to obtain approval from his current lender(s) to accept an amount ....
• Eligibility for Property Tax Deductions
  While property taxes always seem to be rising, there are some property owners who are entitled to reductions in their real property taxes due to deductions which are authorized by State law.     Senior citizens who are residents of the State and are of the age of 65 or more years and meet certain income requirements are entitled to a deduction of $250.00 (N.J.S.A. 54:4-8.41).     Citizens and residents of the State who are less than 65 years of age and are permanently and totally disabled, and meet certain income limitations are also entitled to a reduction of $250.00 in their real estate taxes.  (N.J.S.A. 54:4-8.41).     The surviving spouse/civil union partner of a deceased citizen and resident of this State who had been entitled to a deduction as a senior citizen or due to a permanent and total disability shall also receive the real property tax deduction so long as he or she shall remain unmarried (or has not entered into another ....
• Eliminating an Old Mortgage
  When selling a home a buyer’s title search may uncover an old mortgage of the homeowner - or a prior owner, that was not discharged of record.  Frequently the mortgage has been paid off, but unfortunately just not discharged of record in the county clerk’s office.  There are ways to discharge such old mortgages depending on the particular situation. The easiest is if the original mortgage was discharged and returned to the homeowner’s possession and the homeowner can locate it.  The original mortgage, marked as paid and discharged, can then be sent to the county clerk’s office for recording. If the discharged mortgage has not been recorded, and cannot be located, the mortgage can be discharged of record by the filing of an affidavit provided the provisions of N.J.S.A. 46:18-11.5 et seq. apply.  The New Jersey Legislature enacted this law in 1999 to provide a relatively simple and expeditious means of removing mortgages from the record when a ....
• New Jersey Realty Transfer Fees Due on Sale of Residences
  Upon the sale of residential real estate, many Sellers are surprised to learn that the transfer is subject to a New Jersey Realty Transfer Fee.  This is a tax imposed on Sellers by the State of New Jersey pursuant to N.J.S.A. 46:15-5 et seq.  In certain instances the amount can be significant. First enacted in 1968, and comprised of a modest fee, the Realty Transfer Fee law has been amended several times, most recently in 2004.  Each time, not surprisingly, the Realty Transfer Fee has been increased on higher priced real estate. The Realty Transfer fees are calculated on a sliding scale, with the rate per $500.00 of sales price increasing as the sales price increases.  The table below summarizes the standard rates:     Sales Price                        Realty Transfer Fee    $500.00 to $350,000.00        ....
• Who Really Holds Your Mortgage?
  It used to be that homeowners went to their local banker to borrow funds to purchase a new home.  The local banker usually knew the home buyer as well as the property and its value.  If the homeowner later encountered trouble making timely payments, he or she would go back to the  bank which held their mortgage, meet with their banker, and together they would try to work out a solution acceptable to both sides to forestall a possible foreclosure.  Now, however, it is not unusual for a home buyer to use the internet or a mortgage broker to find a lender for them with whom they have had no prior contact.  And thus begins a confusing journey for a homeowner who may someday be in financial distress and need to find the ultimate holder of their mortgage.  In recent years a process called “securitization” has made mortgages much more easily available to home buyers.  At the same time, this process has made it much more difficult for a borrower ....
• Real Estate Taxes and Closing Adjustments
  One of the items commonly adjusted at real estate closings is municipal real estate taxes.  Real estate taxes are billed on a quarterly basis with a quarterly tax payment being due on the first day of the middle month of the quarter.  Thus, first quarter taxes, covering January, February and March are due February 1st.  Second quarter taxes, covering April, May and June are due May 1st.  The due date for third quarter taxes is  August 1st and fourth quarter taxes, November 1st.  The reason municipal real estate taxes are adjusted at closing, i.e., apportioned between the buyer and the seller as of the day of closing, and paid at closing is because the taxes become a lien on the property on and after the first day of January of the year for which they are assessed.  N.J.S.A. 54:5-6. Unless the sales contract provides otherwise, municipal taxes are adjusted based on the current year’s assessment.  If taxes for the current year have not yet ....
• Rights of Adjoining Property Owners: Overhanging Tree Branches and Encroaching Tree Roots
  Adjoining property owners frequently encounter overhanging branches from a neighbor’s tree, hedge or other vegetation.  Although the base of a tree may be in your neighbor’s yard, when branches, limbs or roots cross over the boundary line, they may constitute a nuisance.     Through two New Jersey Supreme Court cases, our Supreme Court recognized that encroaching branches may constitute an actionable nuisance and that a common law right exists to cut off overhanging branches to the property line, but no further.      In Ackerman v. Ellis, 81 N.J.L. 1, 79 A. 883 (Sup. Ct. 1911) the New Jersey Supreme Court held that tree branches which overhang the premises of another may constitute a nuisance. In such instances, the person over whose land they spread is entitled to an action for damages against the person responsible for their presence there.     In Wegener v. Sugerman, 104 N.J.L. 26, 138 A. 699 (Sup. Ct. 1927) the New ....
• Liens Which Affect Marketability of Title
  When selling your home, it is important to be able to convey marketable title.  Marketable title is a title free from encumbrances and any reasonable doubt as to its validity.  Some of the factors which can affect the marketability of title are various statutory liens.  Some of the most common ones include:     Existing Mortgages.  All recorded  mortgages will act as a lien against the property.  This includes any home-equity loan and lines of credit which are secured by a mortgage in addition to primary mortgages.  Payoff statements can be obtained from the lender prior to closing so that the mortgage lien can be paid off from the closing proceeds.  It is important that home-equity and line of credit accounts be terminated prior to or at closing and representations be made by the borrower that no additional withdrawals have been made beyond the amount indicated in the payoff statement.     Existing Judgments. State ....
• Selling A Home From An Estate
  It’s not uncommon for an executor or administrator of an Estate to find that the decedent has left a house which needs to be sold by the Estate.  In addition to the normal requirements for selling a house, there are some special issues to consider when the seller of real estate is the estate of a decedent. Real estate held by a decedent’s estate is subject to liens for the payment of any New Jersey Transfer Inheritance Tax, New Jersey Estate Tax, Federal Estate Tax and debts of the decedent.   The N.J. Transfer Inheritance Tax is a state tax imposed on the transfer of property  made upon the death of a New Jersey resident and certain non-residents, or made by such a decedent in contemplation of death. N.J.S.A. 54:34-1 et seq.  The Inheritance Tax lien lasts for a period of fifteen years following the date of death. N.J.S.A. 54:35-5.  This lien is discharged when the tax is paid or a bond given to the State.  The N.J. Division of Taxation issues ....
• When Issues Remain After Closing - Agreements for Post-Closing Obligations
  It is not unusual for a buyer and seller to want to close on their house sale, but there remains obligations on the part of the buyer or seller to fulfill.  It is always imperative that whatever the agreement is for post-closing obligations, that it be reduced to writing and signed by each party involved so that all parties have a clear understanding of what their agreement is.  This will help to avoid any later misunderstandings or disputes over what each party’s obligations were. Some agreements which address common issues include: Use & Occupancy Agreements: Sometimes a Seller seeks to remain in the home after closing and the Buyer agrees to this.  In such event, an agreement commonly called a Use & Occupancy Agreement should be prepared.  It should spell out what daily charges the Seller will be paying for the right to remain, what other charges, such as utilities, telephone, cable, the Seller will be paying, the date Seller will be vacating the ....
• Real Estate Tax Appeals: Who Has the Burden of Proof
  Recently, many municipalities have performed revaluations in order to make certain that all their assessments reflect the current market value of the properties located in their municipality. When a property owner files a tax appeal to challenge a tax assessment after a revaluation, who bears the burden of proving whether the new assessment is correct - the tax assessor or the property owner? The answer is the property owner by virtue of the “presumption of correctness”. When appealing a tax assessment, it is very important to understand how the presumption of correctness works. Once a tax assessor imposes an assessment, the County Tax Board and Tax Court are required to presume that the tax assessment is valid and the taxpayer is required to rebut the presumption by cogent evidence. The New Jersey Tax Court has held that in order to overcome the presumption, the taxpayer must produce evidence that is “definite, positive and certain in quality and quantity.” ....
• Property Revaluations: Myths and Facts
  The rise in property revaluations has caused confusion throughout the State of New Jersey. Property owners have been questioning the motives of their governing bodies and appealing assessments, often times without an understanding of the law. This blog is intended to clarify some of the myths surrounding revaluations. Myth No. 1: Townships perform revaluations in order to increase revenues for the town, county and school board. As a general rule, a revaluation only impacts the assessed value of properties in a municipality, not the municipal budget. The amount of tax revenue required by a municipality, school board and county are determined through the budgeting process. The overall budget is the numerator in determining the tax rate for a municipality. The denominator is the aggregate assessment of all properties in town which, in a revaluation year, is the total of all assessments in town as determined by the revaluation company. The revaluation may impact the overall tax rate, but ....
• Can the Court Compel the Sale of the Marital Residence while a Divorce is Still Pending?
  The equity in a marital residence (defined as the appraised value of the residence minus the existing mortgages and liabilities) is often the largest asset to distribute in a divorce. Perhaps you need to access the equity in the residence to meet living expenses or to pay the cost of litigation, and you want to list the residence for sale right away. On the other hand, maybe you don’t agree that the house should be sold right away because of practical concerns. The way in which the residence is distributed, and when, is therefore a common source of contention. The New Jersey Courts were previously barred from compelling the sale of a marital asset prior to the entry of a Final Judgment of Divorce, as in Grange v. Grange, 160 N.J. Super 153 (App. Div.1978). However, pursuant to the New Jersey Supreme Court’s holding in Randazzo v. Randazzo, 184 N.J. 101 (2005), a Court may compel that the marital residence be listed for sale as long as it would serve best interests of the ....
• New Jersey Legal Update - Podcast # 46
  This week's New Jersey Legal Update podcast is a seminar presented by Timothy Duggan and Vincent Mangini, Shareholder's in the firm's Condemnation Group, which was given to commercial and residential property owners in the East End Redevelopment area of Somerville, NJ. The seminar discussed the redevelopment process under New Jersey law and what property owners need to know. You can listen to the seminar here. Technorati Tags: New Jersey : Podcast :  Eminent Domain : Redevelopment : Condemnation  ....
• "Prompt Pay" Bill
  Currently there is legislation pending in the New Jersey Legislature that will require builders to pay subcontractors upon demand or immediately instigate arbitration. These bills (A-3174/Caraballo and S-1726/Sweeney) are on a "fast track". By way of background, this proposal provides that an invoice is automatically deemed approved and certified by an owner 10 days after the owner receives it, unless the owner disputes the amount in writing. It then requires the owner to make full payment to the contractor not more than 20 calendar days after the billing date specified in the contract. According to this proposal, all disputes regarding payment are submitted to binding arbitration. This proposal was introduced by Senator Sweeney (D-3) in March, released from the Senate Labor Committee, and forwarded to the Senate Budget and Appropriations Committee for further review. The Assembly companion measure was introduced by Assemblyman Caraballo (D-29) earlier this month and ....
• Duggan Quoted in Trenton Times on Property Revaluation
  Timothy Duggan, a shareholder in the Property Valuation group, was quoted in the article "Revaluations 'Bad for Your Taxes'" in the February 5 edition of the Trenton Times. The article discusses the reactions of homeowners in Mercer County towns whose homes are currently being reassessed. Mr. Duggan commented on the uncertainty homeowners face, not knowing how the revaluations will affect their property taxes. Read the article here. Technorati Tags: New Jersey : Real Estate : Property Valuation : Tax : Property Tax ....
• Professionals Who Can Help with the Purchase of a Home
  Buying a home is often a major transaction for an individual or family and generally occurs infrequently. It is not surprising then, that Buyers have need for a number of experts to assist them in this endeavor. Realtors - A real estate agent who represents a Buyer's interests in buying a new home can be a wonderful resource. The real estate agent can initially assist by recommending the best geographic area for a Buyer to look based on the Buyer's lifestyle, commuting requirements and school needs, among other factors. Real estate agents are an excellent source of information about various communities a Buyer may be considering - from the services a community provides its residents, to their form of government, to the rating the municipality's school system has attained within the State. The real estate agent will also guide a Buyer through the process of making an offer on a home and can provide expert advice regarding the offer a Buyer plans to make. Real estate agents assist ....
• Pre-Litigation Negotiations: Property Owner Must Do More Than Complain or Reference Tax Assessment
  Recently, the Superior Court of New Jersey affirmed a trial court's decision finding that New Jersey School Construction Corporation ("NJSCC") negotiated in good faith prior to filing a condemnation action. New Jersey School Construction Corporation v. Guppy Holdings, LLC, Docket No. A-2831-04T32831-04T3 (App. Div. Oct. 6, 2005). In Guppy Holdings, an individual acquired title to real estate through a tax foreclosure after negotiations for the purchase of the property had begun. The initial offer of $40,000 was based upon an appraisal prepared by the NJSCC. The property owner rejected the offer and questioned the appraisal in light of the fact that the property's current tax assessment was $179,600. The NJSCC made a final offer which was ignored by the property owner. After the NJSCC filed a complaint to take the property, the property owner filed a motion to dismiss the complaint arguing that the NJSCC failed to negotiate in good faith for the purchase of the property as required by ....
• Exclusion of Gain from Sale of Principal Residence
  When selling a home, whether due to an employment move, trading up, or downsizing, a homeowner-taxpayer should be aware that special tax treatment applies under certain situations when the sale is of the taxpayer's principal residence. Under certain circumstances, a single taxpayer can exclude up to $250,000.00 of gain on both federal and state income tax returns and married taxpayers can exclude up to $500,000.00. For married couples, the $500,000.00 exemption, requires that they file a joint return in the year their residence is sold. The determination of whether gain on the sale of a residence can be excluded from a homeowner's income for tax purposes depends on whether the property has been owned and used by the taxpayer for a period of two or more years during the five year period prior to the sale. The five year period ends on the date title is transferred. The two year time period, for both ownership and use, does not need to be a consecutive. The time can be aggregated over the ....
• Washington Township (Robbinsville) Adopts TDR Ordinance
  Transfer of Development Rights or "TDR" ordinances are fast becoming the cutting edge in planning design utilized by Townships to control development. Most recently, Washington Township (Robbinsville), Mercer County, has adopted a new ordinance creating a TDR Program mirrored after the nationally recognized TDR program in Chesterfield Township, Burlington County, New Jersey. The new Ordinance #2005-12 establishes the highly renown Washington Town Center as the receiving area for future development through a transfer of development rights from the sending area which is identified in the new ordinance as the property located in the Rural Agricultural District (formerly Rural Residential District). This extends the property rights of those individuals who hold title to property in the Rural Agricultural District, by granting those property owners the right to sell development credits for use in the receiving area, in exchange for preserving their land as open space, or restricting its use ....