The Horizons at Woodlake Greens age-restricted senior community of 209 single family homes off Joe Parker Road was constructed in 2004 by Kara Homes.
Their years long legal disaster involves their clubhouse, which Kara Homes retained under their own ownership instead of transferring title to the newly created Homeowners Association as is typically done in such residential subdivisions.
Kara Homes went bankrupt in October 2006. In 2007, Glen Fishman, a well-known Lakewood businessman, bought their half-finished community at auction. This sale included the clubhouse and open space lot.
After the sale took place, because the clubhouse and open space were not owned by the Homeowners Association (which would have deemed them tax exempt), then Lakewood Tax Assessor, Linda Solakian, assessed a $29,000 yearly property tax on the clubhouse, pool and common grounds.
This new tax started in 2007 and was imposed on the property until 2011. Mr. Fishman never paid these taxes.
If you fail to pay your property taxes in New Jersey, the municipality will eventually hold an auction where either a third party or the municipality itself will buy the right to pay off the outstanding taxes. The winning buyer is typically given a tax sale certificate (TSC), which signifies that the holder now has a lien on your property. Once the buyer has a tax lien against your house, they will be able to pursue a foreclosure against your home once a certain amount of time has passed. This is known as a New Jersey Tax Sale Foreclosure.
Instead of going after Mr. Fishman to pay these taxes, on August 16, 2011, the Township's Tax Collector sold the tax lien for the clubhouse at a tax sale to Pro Capital who paid Lakewood Township for the taxes owed. The original tax bill along with additional taxes for 2008, 2009 and 2010 tallied $67,622.66 plus interest of $24,151.70, totaling $91,774.36. The Tax Collector also sold the tax lien on their common area open space lot for $6,480.00.
At the time the tax sale certificates were issued, the Developer was the owner of record of the property within the community, which included the Clubhouse, therefore, throughout all of this time, the Horizons residents - who purchased their homes with the understanding that the clubhouse and pool would be part of their property - had no idea about this tax lien sale.
Subsequently, in late 2014, Pro Capital filed legal action to foreclose on its tax certificate. At that point, they sent an email to the Horizons HOA notifying that they were foreclosing on the clubhouse and pool.
The Horizons HOA immediately jumped into action, and hired an Attorney to stop the foreclosure temporarily while they worked to unravel exactly what in the world just occurred to them.
During the same time period, the Developer filed a tax appeal which was settled by a stipulated judgment reducing the assessment on the Clubhouse lot and to the common area lot to $0.00, as it was deemed to be common property, and therefore tax exempt. There are therefore no taxes owed to the Township of Lakewood.
The Township caused a duplicate tax certificate to be issued to itself for the common area lot and cancelled it on February 2, 2017.
On June 28, 2016, Pro Capital assigned the Tax Certificate to the Association, which intended to pursue its foreclosure against the Developer. The Assignment of Tax Sale Certificate was recorded with the Ocean County Clerk on December 5, 2016.
In 2017, the Developer filed for bankruptcy. In the bankruptcy matter, the trustee in bankruptcy accepted the Association’s offer to purchase the Clubhouse from the bankruptcy estate. On October 23, 2018, the trustee in bankruptcy transferred ownership of the Clubhouse to the Association by Deed dated October 23, 2018 and recorded on December 3, 2018.
The original Tax Sale Certificate for the Clubhouse lot cannot be located.
The Tax Collector continues to calculate interest on the said Certificate, which remains open and appears in the records of the Ocean County Clerk as an encumbrance upon the Clubhouse lot.
The Association, as the owner of both the Clubhouse lot and the Tax Certificate thereon, has no reason to pay to itself the redemption amount including the accruing interest, which would constitute the return on investment for the typical holder of a tax certificate. The Association desires only to have the tax certificate cancelled of record both in the County Clerk records and the Lakewood Tax Collector records.
Therefore, the Association requested that the Lakewood Tax Collector cancel the Certificate or issue a duplicate original of the Certificate to the Association for cancellation.
The Tax Collector refused, saying that the taxes and interest thereon were valid at the time of the tax certificate sale.
In response, Florham Park Attorney Samuel J. McNulty, Esq. representing the Homeowners Association, was forced to file legal action in Ocean County Superior Court.
The lawsuit indicates that the Certificate is a cloud on the title to the Association’s common property and may prevent unit owners from selling or refinancing their homes and/or preventing purchases of the property within the Association.
Therefore, to prevent immediate and irreparable harm, the lawsuit seeks an injunction requesting that the Court enter an order requiring the Township to cancel the Certificate and to cancel all interest that has accrued upon the balance in the aforesaid Certificate.
Despite that the Tax Collector previously declared "no can do," the filing of the lawsuit did the job just fine!
Township Attorney Steven Secare quickly figured out a way to settle the matter.
At their recent meeting, the Township Committee authorized the Tax Collector to issue an appropriate a duplicate tax sale certificate to cover the missing certificate.
This will provide the Homeowners Association with a cancellation of tax lien certificate which they can file with the Ocean County Clerk, thereby cancelling all interest which has accrued upon the balance on the missing certificate.
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1 comment:
Country Club apartments lost our recreational building as well as had the pool filled in and replaced with trailer schools.
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