[HISTORY: Adopted by the Municipal Council of the Borough of Hawthorne 5-7-1997 by Ord. No. 1666 (Ch. 104 of the 1989 Code). Amendments noted where applicable.]
GENERAL REFERENCES
Fire Department and fire prevention — See Ch. 25.
Pursuant to the authorization of N.J.S.A. 17:36-8 et seq., there is hereby adopted an ordinance to ensure the payment of taxes, assessments or other municipal liens due and payable on real property in the Borough of Hawthorne when said property is covered by fire insurance in excess of $2,500 and is damaged or destroyed by fire and to ensure that, if demolition is required, the costs of demolition have been paid or escrowed.
This chapter shall apply to any fire insurance policy issued or renewed after the adoption of this chapter and after the filing of this chapter with the State Commissioner of Insurance.
A. 
The payment to a claimant by any fire insurance company authorized to issue fire insurance policies in this state of any claim in excess of $2,500 for fire damages on any real property located within the Borough of Hawthorne is hereby prohibited until:
(1) 
Such time as all taxes and assessments or charges due and payable appearing on an official certificate of search for Borough liens pursuant to N.J.S.A. 54:5-12 dated subsequent to the fire shall have been paid either by the owner of such real property or by the insurance company pursuant to the provisions of this chapter; or
(2) 
The Borough submits to the insurance company a certified copy of a resolution adopted pursuant to the provisions of § 239-5 of this chapter.
(3) 
In addition, prior to payment, the insured is required to submit an official certificate executed by the Borough of Hawthorne that demolition is not required or the costs of demolition have been paid.
B. 
If the demolition has not yet occurred on the date of receipt by the Borough 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 then pay the anticipated costs of demolition to the Borough which shall hold the funds in an interest-bearing escrow account until the demolition occurs or the actual costs of demolition are determined and paid.
The official certificate of search may from time to time be altered by the bonded official responsible for preparing such certificates in order to correct any errors or omissions or to add any Borough liens or related charges due and payable subsequent to the preparation of the official certificate.
If it is satisfied that the claim for fire damages is to be used to restore or improve the fire-damaged property, the governing body of the Borough may submit to the insurance company a certified copy of a resolution by which it has entered into an agreement with the owner of any fire-damaged property to accept payment in full of all delinquent taxes, assessments or other municipal liens or charges in installments pursuant to N.J.S.A. 54:-19 or for redemption of the tax sale lien by installment payments pursuant to Article 7 of Chapter 5 of Title 54 of the Revised Statutes.
Unless a resolution is received in accordance with this chapter by an insurance company writing fire policies in the Borough of Hawthorne, such insurance company is hereby authorized and required, prior to payment of any claims for fire damages in excess of $2,500 to pay to the Borough of Hawthorne the amount of the liens appearing in the official certificate, or in any alteration thereof pursuant to this chapter, 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 the 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 withhold 75% of the full amount of the lien or charge being contested, 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.
Except as provided in the case of appeals under this chapter, nothing in this chapter shall be construed to obligate the insurance company for any liens not appearing on the official certificate or in any certified changes therein submitted to the insurance company by the bonded official.
The Borough's 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 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 a named insured, in which event the claim of the mortgagee to file process shall be paramount to the municipal lien only to the extent of the amount due and payable to the mortgagee under the mortgage contract.
Upon its adoption, this chapter and any subsequent amendment thereof shall be filed with the New Jersey State Commissioner of Insurance as required by law.