Yanoff, J.s.c. (temporarily assigned) (Retired, on Recall).
Involved here is delineation of the obligations of a municipality when it becomes the purchaser of real property at a tax sale and thereafter takes possession of the property pursuant to N.J.S.A. 54:5-53.1. The uncontradicted facts follow.
On October 1, 1985, the City of Newark took possession of 447-449 -- 5th Street, Newark, New Jersey, by reason of such a sale. The City's practice is not to collect rents for 90 days after it takes possession. This it supports by citing N.J.S.A. 54:5-87,
giving an owner three months to reopen a judgment barring the equity of redemption in a tax foreclosure proceeding. In this case it followed that practice.
The City's Rent Collection Department manages collection of rents from tax foreclosed property. The practice of that Department is to make a physical check of the number of tenants on the property, and thereafter to give notice to the tenants requiring them to come into the City Hall and make arrangements with the Department for payment of rents. There were seven tenants. However, the notice given to the tenants, dated December 10, 1985, was served on only four, by hand-delivery as to one, and posting as to the other three. The City's ledger sheets show that rents were collected from only four tenants, and that no rents were collected until March 1986. The City incurred fuel charges for the premises, beginning December 1985, and for repairs made between February 24, 1986 and April 30, 1986. The total expense to the City for fuel and repairs was $4,038.26.
Prior to redemption of the property, it collected rents in the amount of $2,853.86 from four of the seven tenants. However, on its books it gave credit to tenants for rent receipts totalling $6,269, which the tenants had exhibited to the rent collector. The difference between rents collected and disbursements is $1,984.98. Rent credited, but not collected, exceeds that amount.
Plaintiff redeemed by purchasing the right of redemption from the defaulting owner and paid the City $17,174.67 for taxes and interest, plus $10,333.51 for water and sewer charges pursuant to the City's lien thereon. Additionally, the City refused to give plaintiff the necessary deed until plaintiff paid additional sums for rents due to the City while it was in possession of the property and the cost of repairs and fuel oil paid for by the City. The latter two sums were paid under protest.
On motion for summary judgment, a partial summary judgment was entered in favor of the plaintiff in the sum of $8,604, representing an amount claimed by the City for rents neither credited nor collected.
The rent receipts referred to were signed by "283 Broadway Company." Nothing is known about that company, except that it is not an owner of record. No attempt was made by the City to investigate, although, as indicated, the tenants received credit for the rent receipts.
The City takes the position that it is not obligated to pay the sum of $1,984.90, because of the language in ...