40:37A-116. Foreclosure action; parties; powers of court; sales

In any foreclosure action involving a qualified housing sponsor, other than a foreclosure action instituted by the authority, the authority and the municipality in which any tax exemption is provided shall, in addition to other necessary parties, be made parties defendant. The authority and the municipality shall take all steps in such action necessary to protect the interest of the public therein, and no costs shall be awarded against the authority or the municipality.

Subject to the terms of any applicable agreement, contract or other instrument entered into or obtained pursuant to section 23 of this act, judgment of foreclosure shall not be entered unless the court to which application therefor is made shall be satisfied that the interest of the lienholder or holders cannot be adequately secured or safeguarded except by the sale of the property; and in such proceeding the court shall be authorized to make an order increasing the rental or carrying charges to be charged for the housing accommodations in the housing project involved in such foreclosure, or appoint a member of the authority or any officer of the municipality in which any tax exemption with respect to the projects provided, as a receiver of the property, or grant such other and further relief as may be reasonable and proper; and in the event of a foreclosure or other judicial sale, the property shall be sold only to a qualified housing sponsor which will manage, operate and maintain the project subject to the provisions of this act, unless the court shall find that the interest and principal on the obligations secured by the lien which is the subject of foreclosure cannot be earned under the limitations imposed by the provisions of this act and that the proceeding was brought in good faith, in which event the property may be sold free of limitations imposed by this act or subject to such limitations as the court may deem advisable to protect the public interest.

L.1979, c. 275, s. 11, eff. Jan. 3, 1980.