(TRENTON) – Legislation Assembly Democrats Eliana Pintor Marin co-sponsored to require provisions regarding a sellers’ obligation to deliver marketable and insurable title in certain residential real estate contracts of sale was approved 76-0 Monday by the Assembly.
The bill (A-3366), which supplements the “Fair Foreclosure Act,” addresses situations in which a residential mortgage lender foreclosing on a residential property, buys the property at the resulting sheriff’s sale, and subsequently seeks to sell the property (commonly known as a “Real Estate Owned” or “REO” property) through a contract with a new purchaser.
“There have been issues that arise in these transactions when a seller fails to deliver marketable and insurable title at closing,” said Pintor Marin (D-Essex). “This breaches the contract and leaves the buyer with considerable expenses they must incur to purchase the property.”
The bill provides certain protections to a purchaser in these situations by requiring that a real estate contract of sale between a seller who takes title to a residential property as a result of a sheriff’s sale under the provisions of the Fair Foreclosure Act and a purchaser will provide that:
(1) The seller will provide a marketable and insurable title to the purchaser;
(2) Any failure of the seller to satisfy the requirement of providing marketable and insurable title pursuant to paragraph (1) will constitute a breach of contract;
(3) In the event of a breach of contract pursuant to paragraph (2), in additions to any other remedies that the purchaser may have, the seller will return to the purchaser any deposit money paid by the purchaser and will reimburse the purchaser for any expenses incurred by the purchaser in connection with the purchase of the property.
The bill, which was also co-sponsored by Assembly member Clinton Calabrese, will now go to the Senate for further consideration.