PATERSON — The foreclosure didn’t seem fair to Alessandro Roberto.
The septuagenarian had owned his property at 157-161 20th Avenue in Paterson for 25 years and spent about $200,000 making improvements on a building that contained two apartments and several businesses. He was counting on the rent revenue for his retirement.
But Roberto had a lingering problem over $606 in unpaid sewer taxes dating from 2010 and 2016, and gradually his debt on those tax liens grew to $32,973 with interest and other costs over the years. In February 2022, a judge entered a final judgment that cost Roberto his property — which was worth about half a million dollars.
That judgment marked Roberto’s low point. On Thursday, the 75-year-old resident of Totowa celebrated a new high. A favorable opinion by the New Jersey Supreme Court in his property case brought tears to his eyes.
“Emotionally, I was up in the sky,” Roberto said of his feelings when his lawyer, Glenn Reiser, told him about the Supreme Court decision.
In a 5-0 ruling, the Supreme Court upheld lower court decisions that said Roberto could regain his property under an “exceptional circumstances” rule in New Jersey’s Tax Sale Law. In essence, the courts said it would be inequitable for Roberto to forfeit the substantial equity — including the $200,000 he spent on renovations — he had put into the property as a penalty for the $32,973 tax lien.
The lower courts had required him to make the payment on the tax liens, along with $12,400 for attorney fees for the investor, which operated as a limited liability corporation named 157-161 20th Avenue Realty.
In New Jersey, municipal governments maintain their property tax cash flow by selling liens on delinquent sites for the price of the unpaid taxes. Investment companies, like 20th Avenue Realty, buy the liens in a system that allows them to impose a minimum of 18% interest per year.
If the property owner doesn’t pay off the lien with interest within six months, the investors are allowed to begin foreclosure proceedings. In this case, 20th Avenue Realty bought the liens on Roberto’s property many years ago but did not start foreclosure until 2021.
First time arguing before NJ Supreme Court
Roberto credited Reiser for his legal acumen in winning the case. Reiser said he had prevailed in 11 similar tax lien cases, all of which he said involved people who had no mortgages and substantial equity in their property.
None of those other tax lien holders appealed the decisions, he said. Reiser said he never before argued a case before the state Supreme Court, and he admitted feeling a little nervous.
“I couldn’t believe I was standing in that court arguing a case before the most brilliant legal minds in New Jersey,” Reiser said. “It was surreal. But once I got started, all the nerves wore off.”
Elliot Almanza, the attorney who represented 20th Century Realty, declined to discuss the ruling. “We respect the court’s decision,” he said.
Lawyers representing the National Tax Lien Association and the New Jersey Land Title Association filed legal briefs supporting 20th Avenue Reality, arguing that the lower court decisions would undercut the ability of municipalities to generate tax revenue.
Minnesota case provides precedent on property seizure
But several lawyers told Paterson Press that the ruling on Roberto’s property likely won’t affect many other people involved in tax lien foreclosure disputes. That’s because the United States Supreme Court in 2023 made a ruling in a Minnesota case involving property seizure for unpaid taxes that now looms as precedent.
A New Jersey appellate court in December 2023 cited the Minnesota case as its basis for ruling in Roberto’s favor. Reiser said that appellate decision then prompted the New Jersey Legislature to change state law on tax lien foreclosures.
“My victory, it’s not just for me, it’s for all the other people who are in my position, or even worse,” Roberto said.
The 75-year-old said he had thought he resolved the sewer tax problem years ago when he gave a different lawyer $2,000 to pay off the debt at that time. He said he’s not sure what happened with that payment.
A retired construction handyman, Roberto still speaks with an accent revealing his Italian heritage, even though he immigrated to the United States almost 60 years ago from Serino, a small town about 32 miles outside Naples.
“I lived in the United States since Jan. 22, 1968,” he said. “That was the day that changed my life.”
Roberto said he never felt doubt about the outcome of the legal battle over his property.
“I was confident in American justice,” he said.
