As discussed in our previous blog entry discussing how to file an answer in Trenton for foreclosure matters in the State of NJ, foreclosure lawyer Veer P. Patel discusses the Statute of Limitations Defense for foreclosure actions in New Jersey:
A statute of limitations is a timeline for when an action must be commenced in court. For instance, if defamation is two years, a suit for defamation must be brought within two years of when the incident occurred with exceptions.
There are two categories of actions for mortgages and notes in NJ. The first is an action to collect money damages on the promissory note signed along with the mortgage. This is not a foreclosure action, but an action to recover monies due under a note. In New Jersey, different courts handle different matters. The Law Division handles actions for money damages, where a suit for money on the note can be brought. The Chancery Division oversees foreclosure actions where an action can be brought to sell the property with a mortgage and obtain proceeds from a sale to pay back the mortgaged amount.
For an action for money damages under the promissory note, the statute of limitations in New Jersey is six years within the maturity date if a maturity date is contained within the note. If the note does not have a maturity date, the action must be commenced within six years after the demand is made for repayment. If no demand is made, then the statute of limitations is 10 years from the last date on which the principal or interest was paid. N.J.S.A. 12A:3-118(a) covers this in part.
The statute of limitations for foreclosure in New Jersey are the earlier of:
- Six years from the date fixed for making the last payment or the maturity date set forth in the mortgage or note, bond or other obligation secured by the mortgage;
- 36 years from the date of recording from the date of execution, so long as the mortgage itself does not provide for a period of repayment in excess of 30 years; or
- 20 years from the date on which the mortgagor defaulted on any of the obligations or covenants contained in the mortgage or in the note, bond or other obligation secured by the mortgage.
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