N.J. Stat. tit. 55, ch. 17

in effect

N.J. Stat. § 55:17-1 Continuation of lease or financial arrangement on default or foreclosure of mortgage loan

Any lease or financial arrangement made by any governmental body or agency of this State pursuant to statute in connection with a project for redevelopment, renewal or rehabilitation shall continue in full force and effect beyond any default in or foreclosure of any mortgage loan made to finance the project, as though such default or foreclosure had not occurred, subject to the provisions of this act. L.1967, c. 304, s. 1, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-2 Records by holder of mortgage loan

In the event of any default or foreclosure in respect to a project coming within this act, the holder of the mortgage loan shall establish a set of records, separate and distinct from those pertaining to its usual business or operations, to reflect with reasonable accuracy the appropriate debits and credits applicable to the project, from which all necessary and proper calculations can be made to continue to carry out the terms and provisions of the lease or financial arrangement, or both, as directed by this act. Such records shall be established and maintained in accordance with recognized accounting practices, to be certified to by independent certified public accountants, in order to assure the governmental body or agency involved that the terms and conditions of the lease or financial arrangement will continue to be applied according to their intent. L.1967, c. 304, s. 2, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-3 Project and financial records equivalent to person or entity entering into lease or financial arrangement for continuation purposes; administration of project arrangements; summary proceedings

The project and the financial records herein provided for shall be considered to be equivalent to the person or entity entering into the lease or financial arrangement for all purposes of any applicable statute, including qualification and status under any such statute for the purpose of continuing such lease or financial arrangement beyond default or foreclosure. The holder of the mortgage loan and the governmental body or agency involved may enter into appropriate agreements to deal with administration of the project arrangements pursuant to this act; and in case of their inability to reach agreement on any one or more aspects thereof, either may apply to the Superior Court, Chancery Division, by a summary proceeding, to settle and resolve the details of such administration in such fashion as will tend to accomplish the purposes of this act. L.1967, c. 304, s. 3, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-4 Establishment and maintenance of financial records and data

The financial records and data in respect to the administration of the project after default or foreclosure shall be so established and maintained as to permit the application of the terms of the lease or financial arrangement in respect to the calculation of payments to be made to a governmental body or agency, as well as of limitations upon profits, earnings, dividends and the like, separately and apart from the business operations of the holder of the mortgage loans arising from other transactions than the project itself. L.1967, c. 304, s. 4, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-5 Nature, identity or status of person with whom lease or financial agreement may be made

Limiting and restrictive provisions of any statute otherwise applicable, in respect to the nature, identity or status of any person with whom a lease or financial agreement may be lawfully made shall be applied to the project only, in case of a default or foreclosure, and shall not be applicable to the holder of the mortgage loan. L.1967, c. 304, s. 5, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-6 Modifying or supplementing mortgage loan; written consent of holder

So long as any mortgage loan remains unsatisfied in respect to any project, no agreement shall be made between the governmental body or agency on any lease or financial agreement and the other party thereto, either to modify or supplement any provision thereof, or to exercise any option or right thereunder, including any option to surrender a tax arrangement, without the prior written consent of the holder of the mortgage loan. L.1967, c. 304, s. 6, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-7 Notice of default to holder

In the event of any default in connection with the terms and provisions of any lease or financial arrangement affecting a project, the governmental body or agency shall not take any steps it may otherwise be entitled to take, until it has first notified the holder of any mortgage loan thereon and provided a reasonable opportunity, in light of the nature of the default and the available means to correct it to cure the same; but in any case shall allow not less than 30 days for such purpose. L.1967, c. 304, s. 7, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-8 Remedies to holder of mortgage loan

In order to provide additional and supplemental remedies to the holder of a mortgage loan on a project, which remedies are deemed necessary and appropriate to the feasibility of making private funds available to finance a project, the holder of a loan may, in addition to any other remedy available by contract or by law: (a) enter into possession of the project and operate the same, or engage some other person, association or corporation to do so; (b) receive by transfer at least a majority of the capital stock of the mortgagor and assume operation and control of such mortgagor; (c) receive and accept a deed or deeds of all of the right, title and interest of the mortgagor in and to the project and to enter into possession thereof and operate the same, or engage some other person to do so; (d) apply to the Superior Court, Chancery Division, for the entry of a judgment of strict foreclosure in respect to any person or persons holding any claim or lien in respect to the project or the mortgagor, junior to that of the mortgage loan; and in such proceedings the court may provide for such marshaling of assets and application thereof as may be appropriate to maintain the relative positions of the parties; (e) institute suit and recover judgment upon the underlying loan obligation without being first required to proceed with foreclosure on the mortgage; (f) proceed to foreclosure of the mortgage, separately from or together with suit on the underlying obligation, and public sale of the project under the supervision and control of the court, to any person, association or corporation willing and able to assume the performance of the terms and provisions of the lease or financial arrangement, either by literal compliance therewith or by means of proper separate records for the project of the nature provided for in this act, all as the court may direct, in order that the highest possible bid may be realized while preserving and maintaining the position of the governmental body or agency under the lease or financial arrangement; (g) pursue any remedy available either under this act or otherwise either in its own name or through a subsidiary or affiliate, and for such purpose any holder of a mortgage loan is authorized to cause such subsidiary or affiliate to be formed, to hold the stock thereof either in its own name or that of nominee or nominees, without regard to the restriction or limitations of any other law. L.1967, c. 304, s. 8, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-9 Definitions

For the purposes of this act, the following terms shall have the designated meanings: (a) "Lease or financial agreement" means any contractual arrangement between a governmental body or agency and some other person, pursuant to applicable statute, which is calculated to render financially feasible the undertaking of any project for redevelopment, renewal or rehabilitation, and shall include without limitation the granting of exemption from taxes, the payment of moneys for charges in lieu of taxes, and any other arrangement to assist in the realization of a project. (b) "Governmental body or agency" means any governmental body or agency of the United States, of this State or of any subdivision thereof, which may be a party to or participant in any project. (c) "Project" means any undertaking, whether of one or more units, which is the subject of any lease or financial arrangement for redevelopment, renewal or rehabilitation. (d) "Holder of a mortgage loan" means any person, association or corporation advancing funds, either for construction loans or for temporary or permanent financing, in respect to lands, improvements or both which constitute a project or part of a project. (e) "Mortgagor" means any person, association or corporation having an interest in a project which is subject to a mortgage loan, whether or not the original mortgagor or a successor or assignee subject to the mortgage. (f) "Default or foreclosure" means any event entitling the holder of the mortgage loan to pursue any one or more remedies available under this act or by other law or by contract, without regard to whether a traditional foreclosure or strict foreclosure occurs in fact. L.1967, c. 304, s. 9, eff. Feb. 15, 1968. Amended by L.1977, c. 368, s. 1, eff. Feb. 6, 1977.

N.J. Stat. § 55:17-10 Liberal construction

The provisions of this act shall be liberally construed in order that holders of mortgage loans on projects may rely, in the event of a default of foreclosure, upon the continuation of terms and provisions of the lease or financial arrangements evaluated at the time of the making of the loan to determine its financial feasibility, and in case of any conflict between the provisions of any statute authorizing such leases or financial arrangements and the provisions of this act, this act shall prevail. L.1967, c. 304, s. 10, eff. Feb. 15, 1968.

N.J. Stat. § 55:17-11 Application

The provisions shall apply to all mortgages executed and delivered on and after the effective date of this act, and, to the extent that it may be fairly and feasibly applied to mortgages heretofore made, shall be applicable thereto. L.1967, c. 304, s. 11, eff. Feb. 15, 1968.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026