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Tuesday, November 4, 2014

NJSA 2A:44A-22 Priority of Mortgages over Liens, Conditions

2A:44A-22. Priority of mortgages over liens, conditions

22. Nothing in this act shall be deemed to supersede the mortgage priority provisions of P.L.1985, c.353 (C.46:9-8.1 et seq.). Every mortgage shall have priority as to the land or other interest in real property described and any improvement wholly or partially erected or thereafter to be erected, constructed or completed thereon, over any lien which may be established by virtue of this act to the extent that the mortgage secures funds which have been applied to:

a. The payments of amounts due to any claimants who have filed a lien claim or a Notice of Unpaid Balance and Right to File Lien;

b. The payment or the securing of payment of all or part of the purchase price of the land covered thereby;

c. The payment of any valid lien or encumbrance which is, or can be established as, prior to a lien provided for by this act;

d. The payment of any tax, assessment or other State or municipal lien or charge due or payable at the time of such payment;

e. The payment of any premium, counsel fee, consultant fee, interest or financing charges, or other cost related to the financing, any of which are required by the lender to be paid by the owner, provided that the total of same shall not be in excess of 10 percent of the principal amount of the mortgage securing the loan upon which they are based;

f. Payment to the owner of that portion of the purchase price of the real property on which the improvements are made or to be made which have previously been paid by the owner, exclusive of any interest or any other carrying costs of such real property, provided, however, that at the time of the payment of such funds to the owner, the budget upon which the loan was made indicated that the amount of the loan is not less than the total of: (1) the purchase price of the real property, (2) the cost of constructing the improvements, and (3) any cost listed in subsections c., d. and e. of this section; or

g. An escrow in an amount not to exceed 150% of the amount necessary to secure payment of charges described in subsections a., c., d. and e. of this section.

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