A Review of
Partner, Goldenberg, Mackelr, Sayegh,
Mintz, Pfeffer, Bonchi & Gill P.C.,
General Counsel to the Tax Collectors and
Treasurer's Association of New Jersey
As municipal budgets tighten, pressure has been placed upon municipal employees to attempt to lien municipal charges against real estate. The question becomes “What municipal charges can be turned into municipal liens?” The following is a list of common liens and the enabling statutes that allow the charge to be turned into a lien:
• Taxes N.J.S.A. 54:5-6
• Taxes assessed upon omitted property. N.J.S.A. 54:4-63.20, 63.21, 63.37
• Added assessment for taxes. N.J.S.A. 54:4-63.2, 63.2, 63.9
• Assessments for improvements. N.J.S.A. 54:5-7; N.J.S.A. 40:56-33
• Sidewalk improvements. N.J.S.A. 40:65-9
• Electric utility rates. N.J.S.A. 40:62-14
• Water utility rates, rental and connection. N.J.S.A. 40A:31-10,12
• Sewer utility rates, rental, connection fees and other charges. N.J.S.A. 40:14B-42; N.J.S.A. 40A:26A-12
• Cost of repair, closing or demolition of buildings. N.J.S.A. 40:48-2.5(f)(2)
• Abatement of a nuisance. N.J.S.A. 40:48-2.12(f)
• Removal of snow and ice from abutting sidewalks and gutters; removal of grass, weeds and impediments. N.J.S.A. 40:65-12, 13
• Removing brush, weeds, debris, etc. N.J.S.A. 40:48-2.14; N.J.S.A. 40:48-2.27
• Cost of planting or removing trees in front of realty. N.J.S.A. 40:64-8
• Installation and construction of water systems of benefit to real estate. N.J.S.A. 40:62-101
• Garbage, garbage disposal and incinerator service. N.J.S.A. 40:66A-18
• Flood control. N.J.S.A. 40A:27-14
If a property owner has abandoned the property or is non-responsive, the municipality does have the option of sending out its own employees to cut the grass and then lien the property for the costs to the municipality. However, a municipality is required to enact an ordinance under N.J.S.A. 40:48-2.13(a).
It is extremely important that a municipality strictly adhere to whatever statutory requirements there are for imposing municipal liens. Prior to reviewing some of the more common statutes, I want to emphasize the point that there must be a state statute authorizing the municipality to turn a municipal charge into a lien.
Some municipalities have passed ordinances not authorized by any statute, and there is a very good legal argument that these ordinances are invalid. These types of ordinances can expose a municipality to liability in the form of class action lawsuits.
For example, some municipalities have passed ordinances charging for redemption calculations. In my opinion, there is no statutory authority for this and the ordinance may also violate OPRA. While I understand that municipalities want to recover costs whenever possible, it is my opinion that municipal action must be based upon a state statute enabling the local government to enact such a charge.
One of the most common questions is whether a municipality can go to a property and perform maintenance such as cutting the grass and turn the charge into a lien. Normally, a municipality’s code enforcement officer will issue a summons for lack of maintenance to the property owner to try to compel the property owner to maintain the property. However, if the property owner has abandoned the property or is non-responsive, the municipality does have the option of sending out its own employees to cut the grass and then lien the property for the costs to the municipality. However, a municipality is required to enact an ordinance under N.J.S.A. 40:48-2.13(a). After the adoption of said ordinance, N.J.S.A. 40:48-2.14 allows the municipality under the direction of an officer or code enforcement officer to remove brush, weeds, ragweed, dead and dying trees and other obnoxious growth or garbage. The office or code enforcement officer will certify the cost of these services to the governing body which shall examine the certificate. If the governing body agrees, it shall cause the cost to be charged as a lien on the real estate. It is my opinion that there should be some prior notice given to all parties in interest.
N.J.S.A. 40:48-2.27 is a similar statute which allows a municipality to cut brush, hedges and other plant life from any lands under the direction of an officer of the municipality. Such officer shall thereafter certify the cost thereof to the governing body which may certify same as a charge. Again, N.J.S.A. 40:48-2.26 requires that an ordinance be enacted by the municipality. Said statute also requires ten days notice to parties in interest.
N.J.S.A. 40:48-2.12(f) allows a municipality to pass an ordinance that allows a municipality by resolution of the governing body to abate a nuisance, correct a defect or put a premises in proper condition so as to comply with the requirements of any municipal ordinance. The governing body may thereafter certify the costs of same as a lien on real estate. I would again recommend that some notice be provided to parties in interest to prevent due process defenses from being made. However, please note that the statute requires not only an ordinance but a resolution of the governing body after the enactment of the ordinance to correct or abate the nuisance. The term nuisance can encompass a variety of problems within the municipality.
N.J.S.A. 40:65-12 provides the municipality with the authority to pass an ordinance to compel the owner or tenant of any lands abutting upon the public highways of the municipality to remove all snow and ice within twelve hours of daylight after the same shall fall. Furthermore, the same statute provides the municipality with the authority to pass an ordinance requiring the owner or tenant to remove grass, weeds and other impediments within three days of notice. The statute goes on to provide the municipality with the authority to remove snow, ice, weeds or other impediments from the sidewalk and certify same as municipal charge. The statute has withheld constitutional challenge and it may be helpful in situations where a property owner simply refuses to shovel sidewalks which somehow hinder safety within the municipality.
N.J.S.A. 40:48-2.5 et. seq. deals with demolishing buildings. Again, this statute requires a municipality to pass an ordinance that is consistent with the statute. Furthermore, the courts have invalidated demolition liens which have not strictly complied with the requirements of the statute and the enacting ordinance. Simply stated, the cost of repairing, closing, or demolishing buildings can be turned into a municipal lien. However, the statute must be strictly complied with as it relates to notices and the hearing. My strong recommendation is that any municipality attempting to utilize this, have its municipal solicitor work closely with the code enforcement department and make sure that the statute is strictly complied with.
I have had several telephone calls from tax collectors asking whether or not municipal court fines can be turned into municipal liens. I know of no statutory authority for this. The same holds true for unpaid charges to the planning or zoning board. Again, unless there is a statute the specifically provides that a municipal charge may be converted into a municipal lien, no such authority exists.
Municipalities in the above stated limited instances can convert a municipal charge to a municipal lien which takes the same priority status as a tax lien. These are extraordinary powers. Therefore, the courts have required that municipalities strictly comply with statutes before placing liens on real estate. If the municipality does not strictly comply with the statute, there is a strong likelihood that a court will invalidate the lien.
This article was originally published in New Jersey Municipalities magazine. Vol. 86, No. 7, October 2009