Rutgers Law

New Jersey Statutes, Title: 40A, MUNICIPALITIES AND COUNTIES

    Chapter 12a:

      Section: 40A:12a-68: Payments in lieu of taxes constitute lien.

          5. a. Payments required to be made in accordance with an agreement for payments in lieu of taxes entered into under section 3 of P.L.2001, c.310 (C.40A:12A-66) shall be a continuous lien on the land or improvements thereon, or both, or a continuous lien on any leasehold interests in the land or improvements thereon, or both, against which the ordinance is recorded on and after the date of recordation of both the ordinance and the agreement, whether simultaneously or not, or the date of confirmation of the special assessments, whichever is earlier. All subsequent payments in lieu of taxes thereunder, interest, penalties, and costs of collection which thereafter fall due or accrue shall be added and relate back to and be a part of the initial lien. Upon recordation of the ordinance and agreement, payments in lieu of taxes shall constitute an automatic, enforceable, and perfected statutory municipal lien for all purposes, including the federal bankruptcy code, regardless of whether the amount of the payments to be made in lieu of taxes has been determined at the time the lien attaches to any interest in the land, leasehold estate, or improvements, as applicable. A confirmation hearing process to determine the amount due shall not affect the commencement or validity of the lien. Notwithstanding any other applicable law, for the purposes of the "Redevelopment Area Bond Financing Law," sections 1 through 10 of P.L.2001, c.310 (C.40A:12A-64 et seq.), a municipal lien on a leasehold estate shall constitute a lien against such leasehold estate only, unless the financial agreement specifically provides for a lien on the underlying fee interest in the land. In any case, enforcement of a municipal lien on a leasehold estate shall be limited to an in rem proceeding only. No municipal lien shall attach to any interest of a State entity unless such State entity shall have expressly consented to such lien in the financial agreement.

b. If bonds are issued, the municipality, the redeveloper or the State entity redeveloper, as the case may be, may record, either simultaneously or at different times, any ordinance enacted by the municipality relating to the payment in lieu of taxes agreement or special assessments and, either simultaneously with the ordinance or at different times, a copy of the agreement or agreements. The ordinance, when recorded, shall contain a legend at the top of the front page substantially as follows:

"THIS ORDINANCE SECURES BONDS OR OTHER OBLIGATIONS ISSUED IN ACCORDANCE WITH THE PROVISIONS OF THE 'REDEVELOPMENT AREA BOND FINANCING LAW' AND THE LIEN HEREOF IN FAVOR OF THE OWNERS OF SUCH BONDS OR OTHER OBLIGATIONS IS A MUNICIPAL LIEN SUPERIOR TO ALL OTHER NON-MUNICIPAL LIENS HEREAFTER RECORDED."

c. Notwithstanding any law to the contrary, upon recordation of both the ordinance and any accompanying agreement, the lien thereof shall be perfected for all purposes in accordance with law and the lien shall thereafter be superior to (1) all non-municipal liens thereafter recorded or otherwise arising, and (2) all prior liens where lienholder consents, without any additional notice, recording, filing, continuation filing, or action, until the payment in full of the bonds. The lien thereby established shall apply not only to the bonds initially issued, but also to any refinancing or refunding thereof, as well as to any additional bonds thereafter issued on a parity therewith in accordance with the provisions of the original documents securing the initial bonds; provided, however, that in the event any ordinance or agreement is amended or supplemented in a way which increases the amount of payment in lieu of taxes or special assessments, the lien as to that increase shall be perfected and apply upon the recordation of the amended or supplemented ordinance and agreement (including the above-recited legend). Except as set forth in this section, no amendment or supplement to the ordinance or agreement thereafter recorded shall affect the perfection or priority of the lien established upon original recordation thereof.

d. Upon the final payment in full of any bonds secured as provided in this section and section 4 of P.L.2001, c.310 (C.40A:12A-67), the lien established hereby shall terminate, and the trustee shall record a notice to that effect.

L.2001, c.310, s.5; amended 2004, c.112, s.4; 2018, c.97, s.15.

This section added to the Rutgers Database: 2018-09-18 12:11:16.

Older versions of 40a:12a-68 (if available):

Court decisions that cite this statute: CLICK HERE.