The New Jersey Legislature passed the Community Wealth Preservation Act (“CWPA”) on January 12, 2024 expanding access for certain buyers to purchase properties at sheriff sales. CWPA addresses two components of the sheriff sale process in New Jersey: (1) the notice of sale format sent to “foreclosed upon defendant(s)”,  (2) the rights of “certain persons” to purchase the property at or before the sale. The CWPA program amends and supplements N.J.S.A. 22A:4-8 & Section 12 of P.L. 1995, c.244 (C.2A:50-64).

CWPA requires language stating, “this is a notice for the sale of the foreclosed upon residential property” on the exterior of the envelope. Additionally, CWPA states the upset price for the sale must be provided at least four weeks prior to the sale and posted on the website of the sheriff’s office and any other medium used for notice of sale. The amended Act sets forth a number of qualifying factors requiring a “good faith estimate of the upset price” on the day of sale as well. Notably, the day of sale upset price cannot exceed the original upset price notice by more than 3%. If the property is vacant, the foreclosing plaintiff shall provide successful bidder access to the property.

The second part of the Act expands the rights of “certain persons” to acquire the property at or before sheriff’s sale. “Certain persons” are defined as: “foreclosed upon defendant, next of kin, tenant, nonprofit community development corporation, or a bidder who shall occupy the property as the bidder’s primary residence for a period of at least 84 months.” The most notable advantage set forth for these “certain persons” is the option to pay a 3.5% deposit rather than the originally codified 20% deposit (the balance of the 20% is due within 90 BUSINESS days). The potential concern here for servicers is the small 3.5% deposit required to purchase a property. Servicers must be prepared to wait 90 BUSINESS days (over 4 months) to know if a purchaser is fully committed. Note however, the 3.5% will be forfeited if the bidder does not pay the balance within 90 BUSINESS days. 

The remainder of the amended portions of the law that enhance “certain persons” rights are detailed, lengthy, and appear ambiguous regarding who has those “certain person” rights and how they are manifested. ALAW’s New Jersey attorneys are available to further discuss the pertinent changes to the legislation linked below. The Firm’s processes and governing guidelines have been adjusted accordingly.


Click Here to read the full legislation. For any questions regarding this legal alert, please reach out to our New Jersey Partner, Michael Milstead, at [email protected]