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MD Sass Municipal Finance Partners-II, L.P. v. Township of Lower

July 6, 2007


On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. CPM L-0209-05.

Per curiam.


Argued June 6, 2007

Before Judges Winkelstein, Fuentes and Baxter.

Plaintiff, MD Sass Municipal Finance Partners-II, L.P., appeals from a June 15, 2006 order that dismissed plaintiff's complaint seeking a refund from defendant Township of Lower of a municipal lien in the amount of $18,709 that plaintiff satisfied when it sold the property in question to a third party. The municipal lien resulted from demolition costs incurred by the township when it razed a burned-out structure on the property on June 16, 1999. At the time the demolition occurred, plaintiff was the owner of a tax sale certificate on the property, and defendant's failure to notify plaintiff of the pending demolition deprived plaintiff of an opportunity to accomplish the demolition at a lesser cost. Defendant later failed to notify plaintiff of the recording of the demolition lien when it was filed on July 19, 1999.

Plaintiff argues that the Law Division erred when it concluded that the statute in question did not obligate the township to notify plaintiff of the pending demolition or of the recording of the lien. We disagree with plaintiff's interpretation of the statute, but agree with its argument that the township's failure to advise it of the recording of the lien violated its right to due process. We reverse.


In May 1997, and again in December 1997, fire severely damaged a vacant, single family house at 116 Race Track Drive in Lower Township (the property). On May 1, 1998, defendant sent a certified letter to the owners notifying them that the property's condition violated municipal ordinances. The letter was returned as undeliverable. On May 15, 1998, defendant's building inspector concluded that the house could not be rebuilt and should be demolished because it was a safety hazard.

On January 5, 1999, defendant sent a "Notice of Unfit Dwelling" (notice) to the owners of the property notifying them that a hearing on the matter would be held on February 26, 1999. The letter, sent by certified mail to the owners, was returned to defendant by the postal service with a notation that the addressees had moved and left no forwarding address. Defendant then published a copy of that same notice for two consecutive weeks in the local newspaper, posted the notice at the property itself, and filed it with the county clerk.

The owners did not attend the scheduled hearing on February 26, 1999. That hearing resulted in a finding that the house was unsafe and in imminent danger of collapse. On March 11, 1999, the township construction code officer issued a demolition order, stating that:

By a date which shall not exceed sixty (60) days from the date of this Order, the above-referenced property [must] be demolished. In the event that the above-referenced property is not demolished within said time period, the Township will take steps necessary to demolish the property, with all costs to be assessed as a lien against the property.

This March 11, 1999 demolition order was recorded in the county clerk's office on March 17, 1999, and copies were sent to the owners, were published in the local newspaper on March 25 and April 1, 1999, and were posted at the property.

On April 15, 1999, plaintiff purchased from defendant for the sum of $1127 a certificate of sale for unpaid municipal tax liens on the property. Plaintiff did not perform a title search or drive-by inspection of the property, nor did it make any inquiries at the municipal or county offices prior to purchasing the tax sale certificate. Defendant did not notify plaintiff of the March 11, 1999 demolition order.

The property was demolished by defendant's public works department on June 16, 1999, at a cost of $5215. On July 19, 1999, the Township Council adopted a resolution ratifying the demolition of the structure and imposing the cost thereof, $6223, as a lien on the property.*fn1 On May 2, 2002, plaintiff filed a complaint seeking to foreclose on the tax sale certificate it had purchased on April 15, 1999. The complaint further requested sale of the property in order to satisfy the unredeemed tax sale certificate. After the court issued a judgment of foreclosure, plaintiff obtained title to the property following a sheriff's sale in November 2003. On May 7, 2004, plaintiff sold the property to ...

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