The NJ Supreme Court has ruled that a borough was not required to negotiate with the holder of the final foreclosure judgment prior to condemnation of the encumbered property. In Merchantville v. Malik & Son LLC, the Court held that the borough’s effort to negotiate directly with the record titleholder was legally sufficient. Condemnors in NJ are required to engage in good faith negotiations with property owners prior to condemnation. In that case, a party obtained a foreclosure order regarding the condemned property and was set to acquire it through a sheriff’s sale.
In a unanimous decision, the NJ Supreme Court held the condemnor was not required to negotiate with the holder of the final foreclosure and that the borough’s negotiations with property owner Malik & Son LLC was sufficient. It explained,
“We hold that a condemning authority has an obligation to present an offer to acquire property and to engage in bona fide negotiations with no party other than the individual or entity that holds title to the property or the holder of the interest sought to be condemned,” the opinion said. “In addition, we determine that the offer presented in this case and the reply by the property owner satisfied the statutory requirement of bona fide negotiations with the property owner before initiating condemnation proceedings.”