NJ S1425

Requires surplus equity from tax lien foreclosure sales to be returned to the original property owner after the lienholder is reimbursed for unpaid taxes, interest, and foreclosure costs

Replaces the current system where tax lien holders receive full property ownership upon foreclosure with a mandatory sheriff's Internet auction process

Applies to both municipal and private tax lien holders, addressing the 2023 U.S. Supreme Court ruling in Tyler v. Hennepin County that found retaining excess property value beyond owed taxes violates the Fifth Amendment's Takings Clause

Establishes payment priority requiring the sheriff to distribute auction proceeds first to the lienholder for taxes and costs, then to the municipality for other liens, with remaining funds going to the former property owner within 14 days

Takes effect immediately and applies to any tax lien where the right of redemption has not yet been foreclosed