Detailed Answer
1. Overview of Foreclosure Sales in New Jersey
When a property is sold at a sheriff’s foreclosure sale, the sale proceeds first cover the mortgage debt, court costs, taxes and any junior liens. If the winning bid exceeds the total amount owed, the excess is known as “surplus funds.” These funds remain with the county sheriff until properly claimed.
2. Calculating Surplus Funds
To know whether surplus funds exist, compare:
- The final bid price at the sheriff’s sale.
- The total debt sold off, including principal, accrued interest, legal fees, recording fees and any other lien amounts.
If the bid price is higher, the difference is surplus.
3. How to Verify Surplus Funds
a. Obtain the Sheriff’s File Number: Each foreclosure case has a docket or file number. You can find this in the sheriff’s sale notice published in the local newspaper or on the county sheriff’s website.
b. Contact the County Sheriff’s Office: Call or visit the sheriff’s foreclosure unit in the county where the sale occurred. Provide the file number and request confirmation of any surplus balance.
c. Review Court Records: Under New Jersey Court Rule 4:64-5, the sheriff must file a detailed report of sale and distribution with the Superior Court within 30 days after sale. You may view this report at the county courthouse clerk’s office or via the Judiciary’s eCourts system.
d. Check the Judiciary eCourts Portal: The New Jersey Courts maintain an online docket search where you can look up foreclosure cases and view the “Sheriff’s Return of Sale” and distribution ledger.
4. Claiming the Surplus
Any person—including the former homeowner, junior lienholder or other claimant—may seek surplus funds by filing an application in Superior Court. Key points:
- File under Court Rule 4:64-5 for distribution of surplus proceeds.
- Claims generally must be brought within six years under N.J.S.A. 2A:14-1 (six-year statute of limitations).
- The court may require proof of interest in the property (e.g., deed, lien instrument).
- If multiple claimants appear, the court will hold a hearing to determine priority.
5. Relevant Statutes and Rules
- N.J.S.A. 2A:50-53 – Sheriff’s duties after foreclosure sale (search “2A:50-53” on NJ Legislature site).
- Court Rule 4:64-5 – Distribution of surplus funds (Judiciary Rules).
Helpful Hints
- Always collect the sheriff’s file number from sale notices or your lender’s attorney.
- Visit the county courthouse clerk’s office early—records requests can take time.
- Check county sheriff websites; some list surplus funds online by case number.
- Gather documentation proving your interest (deed, mortgage, lien assignment) before filing your claim.
- Consult a qualified New Jersey attorney if there is more than one claimant or if the surplus amount is substantial.