Bill
A 3791
Authorizes New Jersey online foreclosure auctions with vendor contracts, public bid visibility, bidder verification (OFAC checks), fee caps, and a non-electronic option.
Status: Referred to Senate Committee on Consumer Affairs & Protection (1/30/2025)
Introduced: 2/22/2024 — Passed Assembly 76–0 (6/28/2024) — Senate amendments 10/28/2024 & 1/30/2025
Companion: S2639 | Prior-session: A6366
Purpose
- Authorizes and governs the electronic (online) sale of real property at foreclosure in New Jersey and establishes procedural, vendor, bidder‑verification, fee, and notice requirements for online foreclosure auctions.
Key provisions and changes
- Name: Establishes the "New Jersey Online Foreclosure Sale Act."
- County contracting: A county may contract with a private vendor to operate online foreclosure auctions on behalf of a sheriff or other authorized officer. Contracts must be governed by NJ law and spell out services, fees, recordkeeping, security, marketing and recovery‑maximization requirements.
- Procurement: Electronic foreclosure service providers may be procured by counties through competitive contracting; vendors’ track records in creating competitive auctions to maximize recoveries must be considered.
- Vendor participation: Officers, employees, or contractors of the vendor may not participate as bidders in the auction.
- Public visibility: All bids placed during the online auction must be visible to the public online at the time they are placed; pre‑submitted maximum bids remain hidden until placed.
- Fee cap and payment timing:
- Total vendor fees shall not exceed $1,000 per auction (and, if properties are auctioned multiple times under one foreclosure action, the aggregate vendor fees related to those properties shall not exceed $1,000).
- Vendor fees may be taken either from the purchaser’s deposit with the vendor or from the plaintiff’s deposit with the sheriff.
- Vendor fees must not reduce or affect statutorily‑prescribed sheriff’s fees, and are payable when the sheriff’s office has received and is ready to disburse sale proceeds.
- Bidder verification and registration:
- Prospective online bidders must have their identity verified prior to placing bids (examples include government ID or biometric verification).
- Bidders must complete a registration process supplying contact and identifying information necessary to complete a sale.
- Successful bidders must provide information (individual or entity) required for accurate identification and for an OFAC (Office of Foreign Assets Control) sanctions check prior to finalizing purchase.
- Non‑electronic option: Vendors conducting online auctions must provide a non‑electronic option (for example, a paper bid packet) so bidders without online access can participate.
- Notice requirements: When a sale is conducted online, the required statutory notice must also be published on the Internet website where the auction will occur and the printed statutory notices must indicate the sale is an electronic auction and include the auction website address.
- Applicability: The bill does not change foreclosure timelines; it prescribes how online foreclosure sales must be conducted.
Who is affected
- County governments and sheriffs: may contract with vendors and must follow new requirements when holding online auctions.
- Vendors/platform operators: subject to procurement rules, conduct standards, fee caps, public‑bid display, recordkeeping and bidder verification obligations.
- Bidders/purchasers: must register, verify identity and provide contact and OFAC‑check information; both online and non‑electronic participation methods are accommodated.
- Plaintiffs, lenders and debtors: potential for wider bidding pool and possibly higher recoveries; vendor fees cannot reduce sheriff fees.
- General public: greater transparency of online bid activity and expanded access to foreclosure auction information via the auction website.
Procedural/timeline notes
- The bill has been amended in committee and on the floor; most recent reprint (Senate 3R, 1/30/2025) makes the applicant/vendor and fee provisions consistent and clarifies fee collection and payment timing.
- If enacted, the bill takes effect on the first day of the second month following enactment.
Potential impact
- Expected to broaden bidder participation and increase competition for foreclosed properties, potentially increasing recovery amounts for creditors and affecting sale outcomes for debtors.
- Establishes consumer‑protection and transparency measures (identity verification, OFAC checks, public bid visibility) while limiting vendor fees.
Compiled from official sources — confirm details with the bill’s official record.
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