[HISTORY: Adopted by the Township Committee of the Township of Stillwater 5-17-2016 by Ord. No. 2016-8. Amendments noted where applicable.]
Editor's Note: This ordinance also superseded former Ch. 190, Fire Insurance Claims, adopted 11-6-1980 by Ord. No. 80-19 (Ch. XVIII of the 1971 Revised General Ordinances). Said former Ch. 190 was formally repealed 7-19-2016 by Ord. No. 2016-11.
It is the purpose of this chapter to implement the provisions of N.J.S.A. 17:36-8 to 17-36-13 to provide a means whereby municipal liens are a first claim and paramount to all other claims on fire insurance proceeds payable with respect to fire-damaged real property located in the Township of Stillwater.
The Township of Stillwater does hereby prohibit the payment to a claimant, by any insurance company, of any claim in excess of $2,500 for fire damage on any real property located within the Township pursuant to any fire insurance policy issued or renewed after the adoption of this chapter, except as provided for hereunder.
Prior to the payment of fire insurance claim in excess of $2,500, the insurance company shall request from the Township an official certificate of search to be executed by the appropriate bonded municipal official responsible for preparing such certificates, to determine whether or not all taxes, assessments or other municipal liens are presently due and payable to the Township. In the event that there are outstanding sums due and payable to the Township, all sums so payable shall be paid by the insurance company prior to the payment of any fire damages to the owner in excess of $2,500.
In addition to the foregoing, a search shall also be required on an official certificate on a form prescribed and certified by the Township that demolition of the fire-damaged property is not required or that the cost of demolition has been paid. If the demolition has not yet occurred on the date of the receipt by the Township of a request for execution of the certificate required by this section, the insured shall provide on that certificate an estimate of the anticipated costs of demolition. The insurer, on notice to the insured, shall pay the anticipated cost of demolition to the Township, which shall hold the funds in an interest-bearing account in a state or federally chartered bank, savings bank or savings and loan association in this state.
Any request, pursuant to this section, for an official certificate of search for municipal liens shall specify that the search concerns fire-damaged property.
The Township Committee may enter into an agreement with the owner of any fire-damaged property to pay in full all delinquent taxes, assessments or other liens by installments, pursuant to N.J.S.A. 54:5-19 or for the redemption of a tax sale lien by installment payments, pursuant to Article 7 of Chapter 5, Title 54 of the Revised Statutes; provided however, that the Township Committee must first be satisfied that the claim for fire damages shall be used to restore or improve the fire-damaged property. In the event of such an agreement, a certified copy of the resolution of agreement shall be forwarded to the insurance company and shall act as its authorization to make full payment on the claim to the insured person.
The Township may also adopt a resolution to allow the property owner to make arrangements to pay for the cost of demolition in installments, by contract or otherwise, in order to obtain a release of the Township's lien.
The Township claim made in accordance with the provisions of this chapter 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 this chapter only to the extent of the amount due and payable to the mortgagee under the mortgage contract. As used in this section, "institutional lender" means any state or federally chartered bank, savings bank, savings and loan association, or insurance company.
Nothing in this chapter shall be construed:
To obligate an insurance company for any amount in excess of the proceeds payable under its fire insurance policy; or
Except as provided in the case of appeals under N.J.S.A. 17:36-10 of this chapter, to obligate the insurance company for any liens not appearing on the official certificate of any certified changes submitted by the bonded official; or
To affect the authority of the Township to enforce a municipal lien under any other law of this state.
To obligate an insurance company for the payment of demolition costs or anticipated costs, as the case may be, if those costs did not appear on an official certificate or a certified change submitted by the bonded official.
Any person who violates this chapter or fails to comply with any provision thereon shall, upon conviction thereof, be subject to a fine of not more than $2,000, imprisonment for not more than 90 days or a period of community service not to exceed 90 days, or any combination thereof.