[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.]
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:
To obligate an insurance company for any amount in excess of the proceeds payable under its fire insurance policy;
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
To affect the authority of a municipality to enforce a municipal lien under any other law of this state.