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Commercial/Nonresidential Foreclosure Toolkit (NJ)
Practical Law Toolkit w-014-1008 (Approx. 7 pages)
Commercial/Nonresidential Foreclosure Toolkit (NJ)
by Practical Law Real Estate
| Maintained • New Jersey |
A list of resources to help lenders, borrowers, and their counsel navigate the nonresidential (commercial) mortgage foreclosure process in New Jersey. This Toolkit contains links to guidance documents and standard forms for use at all stages of a nonresidential foreclosure action.
The foreclosure of a nonresidential (commercial) mortgage is often a complex and lengthy process combining litigation practice with real estate concepts and procedures. In New Jersey, the Fair Foreclosure Act restricts the foreclosure of mortgages secured by residential real property both:
- Containing up to four dwelling units.
- Where the borrower or their immediate family member maintains a residence.
Any mortgage or other security interest that does not meet these qualifications is a nonresidential mortgage (N.J.S.A. 2A:50-55).
Although each case has its nuances, most New Jersey nonresidential foreclosures follow the same workflow. The key steps include:
- Gathering and reviewing the mortgage, promissory note, and other loan documents.
- Conducting a title search to:
- confirm the mortgage is recorded and whether any assignments are required; and
- identify and evaluate any liens and other encumbrances against the property.
- Preparing and filing a foreclosure complaint with all necessary attachments.
- Recording a notice of lis pendens.
- Serving the complaint with a summons.
- Providing the local municipality with notice of the foreclosure action.
- Determining whether the action is contested or uncontested.
- Adjudicating the right to foreclose typically in connection with the lender's:
- application for an entry of default; or
- motion for summary judgment.
- In an uncontested matter, moving for the entry of a final foreclosure judgment.
- Obtaining a foreclosure judgment and writ of execution.
- Arranging for a public sale of the property, including reviewing and serving a notice of sale.
- When applicable, seeking post-judgment relief through:
- a deficiency judgment; or
- the allocation of surplus funds.
The lender must complete these steps in compliance with:
- Relevant New Jersey foreclosure case law.
- The sheriff's sale procedures for the county where the property is located.
This Toolkit contains links to continuously maintained Practice Notes, Standard Documents, and other resources to assist counsel in understanding and managing New Jersey's nonresidential mortgage foreclosure process. For a collection of materials concerning residential foreclosures in New Jersey, see Residential Foreclosure Toolkit (NJ).