Simon v. Cronecker (2007)

Citation: 189 N.J. 304 (2007); 915 A.2d 489 · Court: Supreme Court of New Jersey (A-105-05) · Argued: September 12, 2006 · Decided: January 29, 2007

New Jersey’s leading authority on third-party redemption of a tax sale certificate (TSC) after a foreclosure action has been filed. The Court held that the Tax Sale Law does not bar a third-party investor from redeeming a TSC post-foreclosure-filing, but only if the investor (1) timely intervenes in the foreclosure action and (2) pays the property owner more than nominal consideration for the property. An investor who redeems without intervening cannot profit, and a constructive trust may be imposed. See new-jersey, right-of-redemption.

Facts

Sea Isle City sold a TSC on four lots owned by Mary E. Ross; Richard Simon (trustee) purchased the certificate (valued ~$4,841.40). In 2003 Simon filed an action to foreclose the TSC. Cherrystone Bay, LLC, learning of the foreclosure complaint, contracted to purchase Ross's property interest for $250,000. Cherrystone and Ross closed on August 22, 2005 — the last day to redeem — and Ross delivered a cashier’s check to the tax collector to redeem. Up to that point, Cherrystone had not sought to intervene in the foreclosure action.

Holding

“[T]he Tax Sale Law does not prohibit a third-party investor from redeeming a tax sale certificate after the filing of a foreclosure action, provided that the investor timely intervenes in the action and pays the property owner more than nominal consideration for the property.”

Because Cherrystone “did not intervene in the foreclosure actions before arranging for redemption of the tax certificates, the investor will not be permitted to profit from the transactions.” To protect the certificate holders, the Court imposed constructive trusts, “allowing plaintiffs to succeed in the third-party investor’s place.”

Reasoning

• Two statutory purposes. The Tax Sale Law both encourages tax-lien investment (by rewarding certificate holders) and protects the property owner’s equity. A third-party investor may step in to redeem and rescue the owner’s equity, but the Legislature did not intend to let investors skim that equity by paying the owner only token consideration while cutting off the certificate holder.
• Intervention requirement. Once a foreclosure is filed, the proper procedural path for a third party acquiring the owner’s interest is to intervene in the foreclosure action so the chancery court can supervise the transaction and protect all parties; redeeming at the collector’s window without intervening is improper.
• More-than-nominal consideration. The investor must pay the owner substantially for the property interest, ensuring the owner — not the investor — captures the equity the redemption preserves.
• Constructive-trust remedy. Where the investor bypassed intervention, equity imposes a constructive trust so the original certificate holder may take the investor’s place, denying the investor an unjust windfall.

Practical impact

• For investors / operators: To redeem someone else’s TSC after foreclosure is filed, you must intervene timely and pay the owner more than nominal consideration — otherwise you forfeit any profit and risk a constructive trust running in favor of the original certificate holder.
• For former owners: The decision protects owners from “equity-skimming” deals that pay them a pittance for property worth far more, channeling such transactions through court supervision.

Good-law status

Still good law. Decided January 29, 2007; repeatedly applied in New Jersey TSC foreclosure practice and not overruled as of last_verified 2026-06-02. (Later decisions continue to refine the “more than nominal consideration” and intervention standards.)

Why it matters

Cronecker is the procedural guardrail around third-party redemption in New Jersey — it complements 257-261-20th-avenue-realty-v-roberto-2025’s surplus-equity holding by ensuring the owner’s equity is preserved for the owner, not appropriated by a late-arriving investor.

Related authorities

• 257-261-20th-avenue-realty-v-roberto-2025 — surplus-equity / state-action ruling under the same Tax Sale Law.
• right-of-redemption — cross-jurisdiction redemption doctrine.

Applies in →

new-jersey (binding state precedent).

Legal information, not legal advice. This page summarizes a court decision for educational purposes and does not create an attorney-client relationship. Verify against the primary opinion and consult a licensed attorney in the relevant jurisdiction before acting. Last verified 2026-06-02.