N.J. Admin. Code § 7:1J-4.6

Current through Register Vol. 56, No. 21, November 4, 2024

Section 7:1J-4.6 - Settlement based upon legal inability to sell the subject property

(a) If, solely as a result of the discharge, the claimant is legally unable to sell the subject property (for example, if a certificate of occupancy cannot be issued for the subject property as a result of the discharge, and the subject property is located in a municipality in which a certificate of occupancy is required for the sale), the administrator may, in his or her discretion, offer to settle the claimant's claim against the Fund in accordance with this section.

(b) If the administrator elects to settle a claim pursuant to this section, the administrator shall determine the amount of the claim eligible for compensation pursuant to N.J.A.C. 7:1J-4.4. An offer by the administrator to settle the claim shall be in such amount.

(c) The making, acceptance or rejection, and arbitration of such settlement offer pursuant to (b) above shall be in accordance with N.J.A.C. 7:1J-8 and 9.

(d) As a condition of the settlement of the claim pursuant to this section, the claimant shall cause all persons having an ownership interest in the subject property (including without limitation any dower or curtesy interest preserved pursuant to 3B:28-1 ) to execute, acknowledge and deliver to the Department a document, in recordable form, granting to the Fund a lien on the subject property securing repayment of the full amount of the settlement. The Department shall forward such document to the county clerk or register of deeds and mortgages of the county in which the subject property is located. Such document shall be prepared and recorded at the claimant's expense.

(e) The administrator shall execute, acknowledge and deliver to the claimant a discharge of the lien upon payment of the following amount (provided however, that if the payment amount calculated below is less than zero, the administrator shall execute, acknowledge and deliver the discharge of the lien upon the claimant's written request, without the payment of any money; and provided further, that if the payment amount calculated below exceeds the amount of the settlement, the administrator shall execute, acknowledge and deliver the discharge of the lien upon repayment of the settlement amount, plus interest at the rate for post-judgment interest established in the Rules Governing the Courts of the State of New Jersey, as such rate is in effect as of the date of the settlement):

Payment amount = SP - (AV - S)

where:

1. SP equals the sale price of the subject property, as adjusted pursuant to the criteria listed in 7:1J-4.4 (c), if the administrator determines that the actual sale price does not accurately reflect the diminution in the value of the subject property resulting from the discharge;

2. AV equals the appraised value of the subject property, absent the effects of the discharge, as adjusted under 7:1J-4.4(c); and

3. S equals the amount of the settlement made pursuant to this section.

N.J. Admin. Code § 7:1J-4.6