[HISTORY: Adopted by the Mayor and Council of the Borough of Shrewsbury 2-5-1996
by Ord. No. 711 (Ch. 38 of the 1973 Code). Amendments noted
where applicable.]
GENERAL REFERENCES
Fire prevention — See Ch. 118.
No insurer issuing fire insurance policies in the State of New Jersey shall pay any claims for fire damages in excess of $2,500 on any real property located within the Borough unless or until the insured person submits an official certificate of search for municipal liens pursuant to N.J.S.A. 54:5-12 certifying that all taxes, assessments or other municipal liens or charges, levied and assessed and due and payable against said property, have been paid or the Borough Council of the Borough submits a certified copy of a resolution adopted pursuant to § 114-3 of this chapter. Any request pursuant to this section for an official certificate of search for municipal liens shall specify that the search concerns fire-damaged property.
This chapter shall apply to and be effective against any fire insurance
policy issued or renewed after the adoption hereof and after the filing of
this chapter with the State Commissioner of Insurance pursuant to N.J.S.A.
17:36-9.
The Borough Council of the Borough may enter into an agreement with
the owner of any fire-damaged property to pay in full all delinquent taxes,
assessments or other municipal liens by installments pursuant to N.J.S.A.
54:5-19 or for the redemption of the tax sale lien by installment payments
pursuant to N.J.S.A. 54:5-65 et seq., if the Borough Council is satisfied
that the claim for fire damages is to be used to restore or improve the fire-damaged
property. An insurance company receiving a certified copy of a resolution
of such agreement from the Borough Council is authorized to make full payment
on the claim to the insured person.
Unless a resolution is received in accordance with N.J.S.A. 17:36-11
by an insurance company writing fire insurance policies in any municipality
having adopted an ordinance pursuant to N.J.S.A. 17:36-9, such insurance company
is hereby authorized and required, prior to the payment of any claims for
fire damages in excess of $2,500, to pay to the municipality the amount of
the liens appearing on the official certificate and such other recorded liens
or related charges as may be certified to the insurance company; provided,
however, that if an appeal is taken on the amount of any lien or charge, other
than an appeal on the assessed valuation of real property pursuant to N.J.S.A.
54:3-21, the insurance company shall issue a draft payable to the court of
record, to be held by the court in an interest-bearing escrow account in a
banking institution or savings and loan association in the state, in an amount
totaling 75% of the full amount of the lien or charge being contested but
not to exceed the proceeds payable under its insurance policy, and the insurance
company shall issue a draft payable to the municipality for the remaining
25% of the lien or charge being contested, with the full amount paid by the
insurance company to the court and the municipality not to exceed the proceeds
payable under its insurance policy pending termination of all proceedings,
at which time such moneys and all interest accruing thereon at a rate paid
on interest-bearing accounts in banking institutions or savings and loan associations
in the state, shall be disbursed in accordance with the final order or judgment
of the court.
A municipal claim made in accordance with the provisions of N.J.S.A.
17:36-8 et seq. shall be paramount to any other claims on the proceeds of
the fire insurance policy, except the claim of the holder of a purchase money
mortgage held as a first mortgage or an institutional lender which is a holder
of a mortgage on the fire-damaged property, where the fire insurance policy
at the time of the loss listed the mortgagee as the holder of an insurable
interest, in which event the claim of the mortgagee to the proceeds shall
be paramount to the municipal lien under N.J.S.A. 17:36-8 et seq. only to
the extent of the amount due and payable to the mortgagee under the mortgage
contract. As used in this section, "institutional lender" shall mean any bank,
savings bank, state or federally chartered savings and loan association or
insurance company.
Nothing in N.J.S.A. 17:36-8 et seq. shall be construed:
A.
To obligate an insurance company for any amount in excess
of the proceeds payable under its fire insurance policy;
B.
Except as provided in the case of appeals, N.J.S.A. 17:36-10,
to obligate the insurance company for any liens not appearing on the official
certificate or any certified changes submitted by the bonded official; or
C.
To affect the authority of a municipality to enforce
a municipal lien under any other law of this state.
