New Jersey HOA Foreclosure

Section 1 — Overview

New Jersey runs its foreclosures through the courts, and it runs them strictly. Condominium and homeowner associations get a six-month limited lien priority that sits ahead of a prior recorded first mortgage, and they operate under a disclosure regime that the Department of Community Affairs (DCA) administers — not a comprehensive operational HOA code.¹ Two tailored statutes anchor the framework: the New Jersey Condominium Act (N.J.S.A. 46:8B-1 et seq.) covers condominiums, and the Planned Real Estate Development Full Disclosure Act, or PREDFDA (N.J.S.A. 45:22A-21 et seq.), governs registration and disclosure for planned developments.² Under N.J.S.A. 46:8B-21, a condominium association's recorded lien takes a limited priority over a prior recorded mortgage, but only for the customary common-expense assessments that piled up in the six months before the lien was recorded — and that slice renews every year rather than paying out once.³ Every enforcement of a mortgage or an association lien runs as a civil action in the Superior Court, Chancery Division, General Equity; the Office of Foreclosure in Trenton handles the uncontested matters, and a vicinage General Equity judge takes the contested ones.⁴ Federal law sits on top of the state process: the Fair Debt Collection Practices Act reaches third-party collectors, the Servicemembers Civil Relief Act stays actions against active-duty servicemembers, and a bankruptcy filing triggers an automatic stay.⁵ The sections that follow lay out the statutory framework, the procedural sequence, recent legislative and judicial activity, and where New Jersey stands among the states.

Section 2 — The statutory framework

The New Jersey Condominium Act and the six-month limited lien priority

The Condominium Act, N.J.S.A. 46:8B-1 et seq., governs condominiums created in New Jersey, and it supplies the only statutory association lien priority the state offers.⁶ Under N.J.S.A. 46:8B-21(a), an association holds a lien on each unit for any unpaid assessment, plus interest, late fees, fines, and the reasonable attorneys' fees it spends on collection. The lien takes effect once the association records a claim of lien stating the unit description, the record owner's name, the amount due, and the date due — and it cannot record a lien for late fees alone.⁷ Subsection (b) gives that lien a limited priority over prior recorded mortgages and other liens, with two exceptions: municipal liens and federal tax liens.⁸ The priority is capped at the total "customary condominium assessment" for the six months before the lien was recorded. The statute defines a customary assessment as the periodic payments for regular operating and common-area expenses under the annual budget, and it expressly leaves out reserves for contingencies, late charges, penalties, interest, and any collection or enforcement fees or costs.⁹ The priority attaches only if the association recorded its lien before it received the summons and complaint in the mortgage foreclosure, or before anyone filed a lis pendens.¹⁰ That six-month slice doesn't pay out just once. A 2019 amendment provides that the limited priority "shall be cumulatively renewed on an annual basis as necessary," which practitioners read as six months of assessments per year for up to five years — a 30-month maximum — reached by recording amended liens each year.¹¹ This is a payment-priority slice, not a UCIOA-style super-priority that wipes out the first mortgage. The controlling read on how it works comes from a federal decision, Whispering Woods Condominium Association v. Rones (In re Rones), 551 B.R. 162 (D.N.J. 2016), where the United States District Court for the District of New Jersey held that the six-month priority partially secures the association's lien, so the lien can't be stripped or crammed down under the Bankruptcy Code's anti-modification clause.¹² No New Jersey Supreme Court decision directly construes the six-month slice; the leading authority on its mechanics is federal.

PREDFDA, nonprofit law, and planned developments

PREDFDA, N.J.S.A. 45:22A-21 et seq., is mainly a registration and disclosure statute. It requires developers to register the planned real estate developments they offer to the public and to disclose key facts to purchasers, and the DCA administers it.¹³ It is not a comprehensive operational code along the lines of California's Davis-Stirling Act or the Uniform Common Interest Ownership Act. In 2017, the Legislature amended PREDFDA through P.L.2017, c.106 — the Radburn law — which established that all unit owners are members of the association and created election-participation rights, including the right of owners in good standing to nominate candidates, run, and vote in executive board elections.¹⁴ PREDFDA and the Condominium Act also require associations to offer a fair and efficient alternative dispute resolution procedure for housing-related disputes, as an alternative to litigation.¹⁵ Because most New Jersey associations organize as nonprofit corporations, the New Jersey Nonprofit Corporation Act, N.J.S.A. 15A:1-1 et seq., governs their corporate structure, board procedures, and record-keeping — working alongside recorded covenants, conditions, and restrictions (CC&Rs) and common-law contract and property principles.¹⁶ New Jersey does not separately license community association managers; manager credentialing stays voluntary and industry-based, and the DCA's distinctive statutory role is PREDFDA development registration and disclosure oversight, not manager licensing.¹⁷ Outside the condominium context, homeowner associations historically held no statutory lien priority at all; their lien rights came only from recorded CC&Rs. That changed in 2019, when N.J.S.A. 45:22A-44.1 extended a parallel statutory lien and the same six-month limited priority to planned real estate developments.¹⁸ Even where no lien-priority dispute is in play, association covenants run with the land: in Fulton Bank of New Jersey v. Casa Eleganza, LLC, 473 N.J. Super. 387 (App. Div. 2022), the Appellate Division held that a bank that bought lots at a foreclosure sale stayed liable for HOA assessments accruing during its ownership, because the declaration amounted to an equitable servitude.¹⁹

Judicial foreclosure, the Fair Foreclosure Act, and federal overlays

New Jersey offers no non-judicial power of sale. Every mortgage and association-lien foreclosure is a civil action filed in the Superior Court, Chancery Division, General Equity. The Office of Foreclosure — a unit of the Superior Court Clerk's Office in Trenton — handles uncontested matters, reviewing filings and recommending judgment to the General Equity judge, and contested matters move to the vicinage.²⁰ The Fair Foreclosure Act (FFA), N.J.S.A. 2A:50-53 et seq., requires a residential mortgage lender to send a Notice of Intention to Foreclose at least 30 days before filing, with cure information, under N.J.S.A. 2A:50-56.²¹ The FFA's notice provisions center on residential mortgage lenders, and by their terms they govern residential mortgage foreclosures rather than HOA or condominium lien enforcement; associations foreclose "in the same manner as a mortgage," but they are not the residential mortgage lenders the FFA's cure-notice apparatus addresses.²² The equity of redemption runs until the court enters final judgment, and a separate 10-day window follows the sheriff's sale.²³ On the federal side, Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), limited FDCPA exposure for entities running non-judicial foreclosures; because New Jersey's foreclosures are judicial, that narrow holding does not shield third-party collectors here, and broader FDCPA exposure may attach.²⁴ The SCRA, 50 U.S.C. § 3901 et seq., provides stays for active-duty servicemembers, and a bankruptcy filing triggers the automatic stay under 11 U.S.C. § 362.²⁵

Section 3 — The New Jersey HOA foreclosure procedural sequence

Lien establishment and recording

N.J.S.A. 46:8B-21(a) creates the lien for condominiums, and N.J.S.A. 45:22A-44.1(a) creates it for planned developments. Either way, the lien becomes effective only when the association records a claim of lien in the county where the unit sits — stating the unit description, record owner, amount due, and date due, signed and verified by an officer or agent.²⁶ The claim may include only the sums due when it's recorded, and it may not be recorded for late fees alone. The six-month limited-priority component is fixed by the customary assessments for the six months before recording, and the priority survives only if the association records the lien before it receives the mortgage foreclosure summons and complaint, or before anyone files a lis pendens.²⁷ The lien as a whole secures all delinquent assessments plus interest, late fees, fines, and reasonable collection attorneys' fees, but only the customary common-expense slice falls within the priority over the first mortgage. This step applies to both condominiums and planned developments, with recorded CC&Rs filling in the statutory minimum by setting interest rates and additional charges.

Pre-foreclosure notice and demand

Where the FFA applies, a residential mortgage lender must send a Notice of Intention to Foreclose at least 30 days before filing, under N.J.S.A. 2A:50-56; that requirement governs residential mortgage foreclosures, not association lien foreclosures.²⁸ For association lien enforcement, the concrete New Jersey pre-suit obligation is the mandatory alternative dispute resolution procedure for housing-related disputes under the Condominium Act and PREDFDA, which the Appellate Division has applied to assessment disputes.²⁹ When third-party collectors handle pre-suit collection, they carry FDCPA exposure — and because New Jersey's foreclosures are judicial, Obduskey does not narrow it.³⁰ Before filing, counsel should also run bankruptcy and SCRA checks, since an automatic stay or a servicemember protection bars or stays the action. These steps apply to both condominiums and planned developments.

Judicial foreclosure complaint, judgment, and sheriff's sale

The association files a complaint in the Superior Court, Chancery Division, General Equity, names the unit owner and every party with an interest, and forecloses the lien "in the same manner as a foreclosure of a mortgage on real property" under N.J.S.A. 46:8B-21(f) and N.J.S.A. 45:22A-44.1(f).³¹ Service follows the Court Rules, and a defendant has 35 days to answer. The Office of Foreclosure processes uncontested matters, reviewing the file and recommending entry of final judgment to the General Equity judge; a contesting answer moves the case to the vicinage for litigation.³² Final judgment fixes the amount due. The court then issues a writ of execution to the county sheriff, who must hold the sale within 150 days of receiving the writ under N.J.S.A. 2A:50-64, after public advertisement.³³ Under N.J.S.A. 2A:17-36, the sheriff may adjourn the sale up to five times — two at the lender's request, two at the debtor's, and one by mutual agreement, each up to 30 days — with further adjournments only by court order for cause.³⁴ The successful bidder pays a 20 percent deposit on the spot. This step applies to both condominiums and planned developments, and recorded CC&Rs may let the association bid at the sale.

Post-sale rights and redemption

After the sheriff's sale, New Jersey Court Rule 4:65-5 opens a 10-day window: a party may object to the sale, and the debtor may redeem by paying the full judgment amount plus costs. The New Jersey Supreme Court confirmed that redemption right in Hardyston National Bank v. Tartamella, 56 N.J. 508 (1970).³⁵ A Chapter 13 petition filed within that window extends redemption by 60 days under federal law.³⁶ If no one objects or redeems, the court confirms the sale and the sheriff delivers the deed. Surplus proceeds go to the court, which distributes them to junior lienholders by priority and sends any remainder to the former owner; the New Jersey Supreme Court has recently reinforced the owner's constitutional right to surplus equity.³⁷ Eviction of holdover occupants follows delivery of the deed. Because the association's recovery is usually capped at its limited-priority slice and its junior position, deficiency exposure — and the prospect of recovering nothing beyond the six-month slice — are realistic outcomes. This step applies to both condominiums and planned developments.

Section 4 — Recent legislative and judicial activity

A. Recent bills

New Jersey's Legislature runs on a two-year session cycle, and the current 221st Legislature covers the 2024-2025 session. Verifiable bills from the past 24 months that touch the Condominium Act, PREDFDA, or foreclosure practice are few, so only verified items appear below.

B. Recent appellate rulings

Recent appellate rulings from the past 36 months that bear on association foreclosure are limited, so only verified cases appear below.

C. Active legislative debates

A Mercer County Chancery Division ruling in Atlantic County Sheriffs & O'Donoghue v. State of New Jersey (Aug. 28, 2025) struck down the CWPP's nonprofit second right of refusal under N.J.S.A. 2A:50-64(g) as an unconstitutional taking. That ruling has prompted proposed remedial legislation, which remains unresolved.⁴²

Section 5 — National positioning and related coverage

New Jersey is a strict judicial-foreclosure state, and it consistently ranks among the slowest in the nation — a direct result of mandatory court supervision. ATTOM's Mid-Year 2025 report put the national average time to complete a foreclosure at 645 days in the second quarter of 2025, with the longest state averages running from roughly 1,874 days in Connecticut to 3,612 days in Louisiana.⁴³ Its six-month limited lien priority hands associations a recoverable priority slice that stops short of a full UCIOA super-priority. That distinction matters. In SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014), the Nevada Supreme Court held that the nine-month super-priority under that state's UCIOA adoption is a "true priority lien such that its foreclosure extinguishes a first deed of trust" — whereas New Jersey's slice is a payment priority that leaves the first mortgage standing.⁴⁴ New Jersey has not adopted UCIOA, which only a handful of states have enacted, and it stands apart from non-judicial trustee-sale states and CC&R-primary states, where lien rights flow only from recorded covenants.⁴⁵ For multi-state operators, the practical implication runs two ways: New Jersey foreclosure timelines are long, and the limited priority has to be computed precisely — by customary assessments only, and renewed by annual lien filings — to capture the full recoverable amount.

Associations operating in New Jersey should treat the recorded lien — filed before any mortgage lis pendens and renewed annually — as the single most consequential lever for recovering delinquent assessments inside a slow judicial system.

1. N.J.S.A. 46:8B-21 (condominium association lien and six-month limited priority); see also PREDFDA, N.J.S.A. 45:22A-21 et seq., and N.J. Courts, Office of Foreclosure ↩
2. New Jersey Condominium Act, N.J.S.A. 46:8B-1 et seq.; Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-21 et seq. ↩
3. N.J.S.A. 46:8B-21(b) (limited priority over prior recorded mortgage) ↩
4. N.J. Courts, Office of Foreclosure (Superior Court, Chancery Division, General Equity) ↩
5. Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.; Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq.; 11 U.S.C. § 362 (automatic stay) ↩
6. N.J.S.A. 46:8B-1 et seq. (New Jersey Condominium Act) ↩
7. N.J.S.A. 46:8B-21(a) (claim of lien; contents; no recording for late fees alone) ↩
8. N.J.S.A. 46:8B-21(b) (priority over prior liens except municipal and federal tax liens) ↩
9. N.J.S.A. 46:8B-21(b)(1) (definition of "customary condominium assessment"; exclusions for reserves, late charges, penalties, interest, and collection costs) ↩
10. N.J.S.A. 46:8B-21(b)(2) (priority conditioned on recording before summons and complaint or lis pendens) ↩
11. N.J.S.A. 46:8B-21(b)(1), as amended by P.L.2019, c.68 (limited priority "cumulatively renewed on an annual basis as necessary") ↩
12. Whispering Woods Condo. Ass'n v. Rones (In re Rones), 551 B.R. 162 (D.N.J. 2016) ↩
13. PREDFDA, N.J.S.A. 45:22A-21 et seq.; administered by the New Jersey Department of Community Affairs ↩
14. P.L.2017, c.106 (the Radburn law) (association membership of all unit owners; election-participation rights) ↩
15. N.J.S.A. 45:22A-44(c); N.J.S.A. 46:8B-14(k) (alternative dispute resolution for housing-related disputes) ↩
16. New Jersey Nonprofit Corporation Act, N.J.S.A. 15A:1-1 et seq. ↩
17. New Jersey Department of Community Affairs, PREDFDA administration and planned-real-estate-development registration ↩
18. N.J.S.A. 45:22A-44.1, enacted by P.L.2019, c.68 (statutory lien and six-month limited priority for planned real estate developments) ↩
19. Fulton Bank of N.J. v. Casa Eleganza, LLC, 473 N.J. Super. 387 (App. Div. 2022) ↩
20. N.J. Courts, Office of Foreclosure (uncontested matters processed centrally; contested matters transferred to the vicinage) ↩
21. N.J.S.A. 2A:50-56 (Fair Foreclosure Act; Notice of Intention to Foreclose, at least 30 days before filing) ↩
22. N.J.S.A. 46:8B-21(f); N.J.S.A. 45:22A-44.1(f) (association forecloses "in the same manner as a mortgage") ↩
23. N.J. Court Rule 4:65-5 (objections and redemption after sale); N.J.S.A. 2A:17-36 (adjournments) ↩
24. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
25. Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq.; 11 U.S.C. § 362 (automatic stay) ↩
26. N.J.S.A. 46:8B-21(a); N.J.S.A. 45:22A-44.1(a) (recording a verified claim of lien) ↩
27. N.J.S.A. 46:8B-21(b) (six-month customary-assessment slice; recording deadline relative to lis pendens) ↩
28. N.J.S.A. 2A:50-56 (Notice of Intention to Foreclose governs residential mortgage foreclosures) ↩
29. Bell Tower Condo. Ass'n v. Haffert, 423 N.J. Super. 507 (App. Div. 2012) (alternative dispute resolution applied to assessment disputes) ↩
30. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019); Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ↩
31. N.J.S.A. 46:8B-21(f); N.J.S.A. 45:22A-44.1(f) (foreclosure "in the same manner as a foreclosure of a mortgage on real property") ↩
32. N.J. Courts, Office of Foreclosure (review of uncontested files; recommendation of final judgment) ↩
33. N.J.S.A. 2A:50-64 (sheriff's sale within 150 days of the writ; sale procedures) ↩
34. N.J.S.A. 2A:17-36 (adjournments of sheriff's sale) ↩
35. Hardyston Nat'l Bank v. Tartamella, 56 N.J. 508 (1970); N.J. Court Rule 4:65-5 (10-day redemption window) ↩
36. 11 U.S.C. § 362 (automatic stay; Chapter 13 redemption extension) ↩
37. 257-261 20th Avenue Realty, LLC v. Roberto, 259 N.J. 417 (2025) (constitutional right to surplus equity) ↩
38. S3992, P.L.2025, c.132 (capital reserve funding; amending P.L.2023, c.214) ↩
39. A5664, P.L.2023, c.255 (Community Wealth Preservation Program; amending N.J.S.A. 2A:50-64) ↩
40. 257-261 20th Avenue Realty, LLC v. Roberto, 259 N.J. 417 (2025) ↩
41. In re Challenge of CAI-NJ to Amendments to N.J.A.C. 5:26, No. A-2241-21 (App. Div. Feb. 23, 2024) ↩
42. Atlantic County Sheriffs & O'Donoghue v. State of New Jersey, No. MER-C-94-24 (Ch. Div. Aug. 28, 2025) (N.J.S.A. 2A:50-64(g) struck down as an unconstitutional taking) ↩
43. ATTOM Data Solutions, Mid-Year 2025 U.S. Foreclosure Market Report (July 17, 2025) (national average 645 days in Q2 2025; longest state averages: Louisiana 3,612; Hawaii 2,746; Nevada 1,974; New York 1,927; Connecticut 1,874) ↩
44. SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) ("a true priority lien such that its foreclosure extinguishes a first deed of trust"); Nev. Rev. Stat. § 116.3116 ↩
45. SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (Nevada's NRS 116 adopts the Uniform Common Interest Ownership Act); New Jersey has not adopted UCIOA ↩