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We also receive questions about Unconfirmed Assessments and how they may impact a New Jersey Tax and Assessment Search. There are two methods of paying for local improvements available to all municipalities in New Jersey.  The first is through the general municipal fund, to which all taxpayers contribute. The second method employs a process of levying assessments against only those parcels that benefit from the improvement. Examples of such improvements include sewer lines, sidewalks and street lighting.

In these cases, the municipality adopts an ordinance to first execute and subsidize the improvement, then confirms said ordinance for homeowner payment. That first ordinance is recognized as an Unconfirmed Assessment, and information regarding those ordinances is detailed via an Assessment Search.

There are many steps to this process, and tracking the ordinances and their impact takes experience in working with various municipal offices.

Reporting Unconfirmed Assessments is very significant because assessment information essentially equates to an alert for future bills deemed lienable. At the closing table, an agent can handle Unconfirmed Assessments in a variety of ways. If an estimate of the cost of the improvement can be obtained, the price of the home can be adjusted, or a credit can be issued to the buyer. Additionally, an agreed amount of funds can be escrowed. If there is no method for estimating the cost of the improvement, all buyers may agree that a bill levied in the future will be negotiated with the sellers.

The property owner at the time the work is completed is responsible for payment of the assessment. This often creates confusion as some improvements may be complete but not billed for years, or – worse yet – decades. If construction on the improvement is in progress at the time of the sale, the assessment and subsequent bill become the responsibility of the new property owner.

It is important to note that missing an Unconfirmed Assessment can result in many future headaches because there is no real ability to plan – or escrow – for potential bills, which are often costly. These assessments are difficult to research since there is no universal keeper of the information. The Clerk’s office is typically the most reliable, but unless towns are actively issuing (and confirming) ordinances, many of the current employees are not aware of older ordinances, or the likelihood of similar future ordinances. In addition, some municipalities offer voluntary assessments, where an ordinance is passed for specific improvements to a specific area, but unlike a typical Unconfirmed Assessment, the property owners have an option of accepting and subsequently paying for the improvement (or rejecting and not paying ).

Individual Unconfirmed Assessments are specific to the way New Jersey municipalities do business, as this method of improvement and payment does not exist in Pennsylvania. Municipalities in Pennsylvania make improvements, but cost for such improvements are absorbed by the general municipality fund.

Check out our next blog on Confirmed Assessments!

Fred Burnett

Vice President, Operations

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