I recently got a couple of questions about investing in tax liens in New Jersey. While I answered these in the comments section of this blog I thought that it would be helpful to answer them for you in one blog post since they are both about investing in New Jersey, but were submitted as comments on 2 different blog posts. So here are the questions and answers for you:
Question from Andrew:
In the state of New Jersey(specifically Sussex County), are recording fees , water and sewer reimbursed upon redemption?
Answer:
Recording fees are reimbursed and not only are sewer and water amounts that you pay are reimbursed but you receive interest on them as well. They are added to your lien. In order to receive those payments back plus interest when the lien redeems, you must submit an affidavit to the tax collector when you make any payments. This includes recording fees and any subsequent tax payments.
Question from Heidi:
Regarding utility liens?.your Q&A answered some of my question, that you, the investor, get the $12.00 search fee in NJ paid to you even though we have not paid for it..correct?
Which makes me wonder that if you would get the $40 recording fee back also even if you did not have it recorded? Or is there no way you would get paid when it redeems if you do not record it? I am just trying to fiqure out if the city does not have an affidavit for the $12.00 search fee..would they just add the $40 recordeding fee without an affidavit?
Answer:
Every tax collector plays by their own rules on this, most will automatically give you the $12.00 search fee, but some might not give it to you unless they have an affidavit for it. All tax collectors require affidavits for the recording fee and subsequent tax payments.
What I do is pay my first subsequent tax payment as soon as I can and then send in an affidavit for both the recording fee and the subsequent tax payments, you can have different payments on the same affidavit as long they are for the same lien.
Have more questions about investing in New Jersey or any other state? Submit your questions below in the comments and I’ll answer it for you.
By kenny kitchens April 4, 2011 - 6:29 pm
i would like to get the tax lien business, at the present time i am unemployed trying to find a job so i can invest in tax liens. is there anything i can do in the meantime, like any book to get started from the library, or can you give me some suggestion on this matter.
By Joanne April 6, 2011 - 4:31 pm
Hi Kenny,
You’ll find various courses at different prices, as well as the books that I recommend at http://www.TaxLienLady.com/resources.htm. Also if you haven’t taken advantage of it already you can sign up for my free video e-course at http://www.TaxLienLady.com/freevideos. Hope you find a job with great pay and benefits, so you can start saving money to invest!
By Andrew February 25, 2011 - 5:23 pm
Thank you for answering my question. I just had my first ever Tax Lien redeem this week. The Tax collector said the recording fee (and subsequently search fee) was paid to me as one of the initial applied fees that they tacked on to the lien. Right after I purchased the lien, the added ninety something dollars which had those fees in it; even thought I never submitted an affidavit. I did the recording, but also never submitted an affidavit for that also. Anyway, it worked out fine. First Lien, received 3.5% return for three months, even after paying a 50% premium to the original lien amount.
By Joanne February 28, 2011 - 11:01 am
Hi Andrew,
Congradulations! You discovered why people (and big business) pay premium to get tax liens in New Jersey. Some tax collectors will give you the recording whether or not you give them an affidavit and some won’t. Don’t count on it. It’s best to record your lien because if the property is sold and your lien does not come up in the title search, you won’t get paid. The search fee is usually always added on whether or not you submit an affidavit for it. I usually don’t submit an affidavit for the $12.00 search fee. Which by the way is all you’re allowed no matter how much you spend on searching the titles to the properties.
By Jon February 25, 2011 - 4:50 pm
Are tax liens in NJ ever sold OTC following the auction?
By Joanne February 28, 2011 - 11:02 am
Hi Jon,
Occassionally there are OTC liens, however they are almost alway junk properties.