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We have had questions from time to time concerning the public/private utility agreement between Elizabeth City and New Jersey American Water and its impact on a private company issuing tax certificates. So, what is all the business about utilities when ordering a tax search in New Jersey? Are utilities attached to the property when sold? Well, the answer is that it really depends. In New Jersey, utilities can be provided in one of three ways: 

   Public – utilities are handled by the individual municipality or a designated Municipal Utility Authority

   Private - utilities are handled by a private company

   Public/private – Municipalities will subcontract the servicing and billing of utilities to a private company.

In the case of utilities handled by either municipalities or a Municipal Utility Authority (MUA) any delinquencies are subject to tax sale, and therefore can become a lien against the property.  Nearly two thirds of the properties in New Jersey have some sort of municipal utility associated with them and these said utilities are searched and reported on any Tax Search from Signature Information Solutions.  If you were to order a Tax Search directly from a municipality and that municipality was serviced by an MUA, you would also have to order a separate utility search from the MUA.  Signature always provides the information on our single report; regardless of what public entity bills the utility charges.

However, utilities that are issued by a private company are not lienable against the property and would not be reported on a typical tax certificate; however, there are a handful of towns that have a contractual relationship with a private company to provide service and billing.  In these cases, we do report the utility information on our certifications. Signature also does provide information and includes language to advise you if a utility is a private company.  While the utilities are not lienable – the private company can have a judgment placed against the original owner of the property. Examples of companies that would do this are PSE&G and NJ American Water.

The other type of utility arrangement is when a municipality decides to keep a utility public, but subcontracts with a private company to handle the servicing and billing.  In these instances, the charges are billed and collected by the private company; but, any delinquencies are lienable and can be sold at tax sale.  In these cases, Signature also provides the billing and/or delinquencies on our single report through research of both public and private records.  Jersey City and Elizabeth City are examples of these types of utility arrangements.

 

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