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Malone v. Midlantic Bank, N.A.

Citations: 334 N.J. Super. 238; 758 A.2d 158; 1999 N.J. Super. LEXIS 469

Court: New Jersey Superior Court Appellate Division; September 9, 1999; New Jersey; State Appellate Court

Narrative Opinion Summary

This case centers on a tax sale foreclosure where occupants, not initially named as defendants, sought to reopen the foreclosure judgment and redeem the property, alternatively asserting tenancy rights under the Anti-Eviction Act. The plaintiffs sought possession of the property. The procedural history revealed that the title had been transferred to Robert Herdelin, who failed to record the deed timely and did not pay taxes. Herdelin's motion to vacate the judgment was denied for lack of excusable neglect. The court scrutinized the legitimacy of a lease purportedly granting tenancy rights to Herdelin's daughter and Mr. McKissock, but found it invalid. The court further determined that the movants lacked a bona fide tenancy and lawful interest necessary for redemption rights under N.J.S.A. 54:5-51, concluding they were licensees rather than tenants. Consequently, the court denied their application for redemption and granted possession to the plaintiffs, requiring the movants to vacate the premises by a specified date. This decision underscores the importance of lawful interests and procedural compliance in asserting redemption and tenancy rights in foreclosure actions.

Legal Issues Addressed

Criteria for Establishing Tenancy

Application: The court assessed the relationship between the parties, the fairness of the rental payments, and the reasonableness of the lease term, concluding that the movants were licensees rather than tenants.

Reasoning: Despite the movants' claims, including misleading information from Robert Herdelin, the evidence indicates that they occupy the premises at his pleasure without a definite term or reasonable rental agreement, categorizing them as licensees rather than tenants.

Impact of Procedural Delays in Foreclosure Cases

Application: Despite procedural delays, the court allowed the rights of the movants to be considered in the hearing, emphasizing the court's inquiry into their rights as a formality.

Reasoning: Although their actions were somewhat delayed, the court allowed for their rights to be considered in the hearing without further postponement.

Redemption Rights under the Tax Sale Act

Application: The court determined that the movants, who claimed occupancy rights through a lease with Ms. Herdelin's father, lacked an enforceable leasehold interest and were thus not entitled to redeem under N.J.S.A. 54:5-51.

Reasoning: Their purported tenancy does not qualify for redemption rights as it would not be cut off by a tax sale foreclosure. Therefore, without a lawful interest, the movants are not entitled to redeem under N.J.S.A. 54:5-51.

Tenancy Rights under the Anti-Eviction Act

Application: The court concluded that the movants did not possess a bona fide tenancy protected by the Anti-Eviction Act, as their purported lease was invalid and potentially fraudulent, indicating a lack of lawful tenant status.

Reasoning: The court found the lease to be invalid and potentially fraudulent, indicating that Ms. Herdelin and Mr. McKissock had not been truthful in their testimony regarding the lease.