If your home in Paterson, Clifton or Wayne is set for a sheriff's sale next month, who gets the first chance to buy it? Most people assume the investor with the biggest certified check. The Passaic County Sheriff's Office says that under New Jersey law since January 12, 2024, the first chance can belong to you, a relative, or a tenant who lives in the house. That buyer pays the upset price, not a bid, and puts down 3.5% instead of 20%.
This right comes from the Community Wealth Preservation Program, codified at N.J.S.A. 2A:50-64. In practice it is won or lost on paperwork long before the auctioneer opens the room. Foreclosure filings make that paperwork more urgent this year. ATTOM counted 8,269 New Jersey properties with foreclosure filings in the first half of 2026, up 21.14% from the same period a year earlier.
The right is used before the first bid
The Passaic County Sheriff's Office holds foreclosure sales every Tuesday at 2 p.m. They are open auctions. The plaintiff opens at $100 and bids rise in steps of at least $1,000. Under the statute, an eligible family member or tenant uses the right of first refusal "prior to the opening of the bidding" by paying a 3.5% deposit. Once that happens, the property never goes to auction.
The price is the original upset price in the sale notice or the final starting upset price on sale day, whichever is less. The Sheriff's Office lists the eligible parties in priority order: the named defendant first, then next of kin, then a tenant. If two or more relatives show up to use the right, the office takes the one who registered or signed in first.
The two sets of terms are very different.
| Term | General public bidder | CWPP buyer using the right of refusal |
|---|---|---|
| How price is set | Open bidding from $100, rising by at least $1,000 | Original or final upset price, whichever is lower |
| Deposit | 20% of the winning bid | 3.5% of that upset price |
| Time to pay the balance | After the 10-day redemption period, due by day 30, with interest from day 13 | 90 business days, with no interest for the first 60 |
| If financing fails | Buyer can lose the deposit | Deposit refunded if the loan fails through no fault of the buyer |
| Who qualifies | Anyone with ID and proof of funds before 2 p.m. | Named defendant, next of kin, or qualifying tenant; investment purchases excluded |
Ninety business days works out to roughly 18 weeks. That is enough time for a standard mortgage to close, which a 30-day cash deadline usually does not allow. The program also has a protection that matters for families who need a loan. If the appraisal comes in below the purchase price or the lender denies the loan, the buyer gets the deposit back and owes only the interest that accrued.
What has to be on file by sale time
The Sheriff's Office is clear that if the documents are missing at the time of sale, it will resell the property without further notice. It asks buyers to send a Bidder Pre-Registration Form by 2 p.m. the day before the sale. You can fax it to 973-881-4241 or drop it off at 77 Hamilton Street in Paterson, Monday through Friday, 8 a.m. to 4 p.m. Each party needs a different set of documents:
- The foreclosed-upon homeowner brings written consent from the plaintiff's attorney, a photo ID plus a second form of ID, a pre-approval letter for the original upset price if financing, and the 3.5% deposit by certified check, official bank check or money order.
- Next of kin need the same items plus an official document showing kinship to a defendant named on the writ, such as a document from the Passaic County Surrogate's Court or a court document.
- A tenant brings two forms of ID, a physical copy of a valid written lease, proof of no rent arrears such as bank records and a letter from the landlord, a utility bill in their name, a pre-approval if financing, and the deposit. The statute also requires a financing tenant to have lived there at least a year and to have been current on rent when the owner received the foreclosure notice.
A fourth category, a buyer who commits to living in the home for at least 84 months, gets the 3.5% deposit terms but still bids at auction. That buyer brings a photo ID and a certificate showing completion of, or enrollment in, eight hours of HUD-certified homebuyer counseling.
The consent letter depends on a hardship showing
The plaintiff's attorney consent is the item families find hardest to get. The statute limits the right of first refusal to defendants and next of kin who show the foreclosing plaintiff that the foreclosure came from circumstances outside their control. The listed reasons are financial hardship, a physical or mental illness that prevents earning an income, divorce or legal separation, the death of the defendant or the defendant's spouse or child, and predatory lending.
The law also works in the family's favor here. Before giving the upset price to the sheriff, the plaintiff may not contact the homeowner or relatives to ask whether they plan to use the program. After the plaintiff learns they intend to, it may not delay or postpone the sale for that reason. The right also applies only when the foreclosed-upon defendant is an individual, not a corporate entity. Homes held in an LLC fall outside it.
The Sheriff's Office accepts the consent verbally if a written follow-up comes by email or on letterhead. Plaintiff's counsel can send it ahead of the sale or it can be handed over at the sale. The attorney's contact information appears on the publication notice. Sale notices run on Fridays in the Herald & News and local weeklies for four straight weeks before the first sale date. Those four weeks are realistically the time a family has to gather the hardship documents and get the consent.
The right holds for one sale date and can be lost
The right of first refusal applies to the first sale of the property. If the sale is delayed or postponed, the family keeps the right for the new date. This interacts with adjournments. The Passaic County Sheriff's Office allows two adjournments at the debtor's request, two at the lender's, and one by agreement, each up to 30 days, unless a court orders more. A defendant adjournment costs $28, paid by money order. A family that needs more time to finish a pre-approval can use an adjournment without giving up the right.
Two rules can close it off. A financing buyer may not bid above the amount of their pre-approval. If a CWPP buyer misses the 90-business-day deadline, any later sale involving the same property, plaintiff and defendant goes ahead with no right of first or second refusal. A buyer who misses the deadline for reasons other than a failed mortgage also forfeits the deposit. A family gets one real chance at this, so the financing should be solid before the deposit check is written.
What changed after 2024, and what hasn't changed yet
The original law also gave nonprofit community development corporations a second right of refusal. On April 15, 2025, Patch reported that Senator Britnee Timberlake said sham nonprofits were abusing that provision. On August 28, 2025, Judge Patrick J. Bartels ruled in MER-C-94-24 that subsection (g), the nonprofit provision, violates the Takings Clause. The ruling is not retroactive, and the rest of N.J.S.A. 2A:50-64 still stands, including the family and tenant right in subsection (d). The Essex County Sheriff now offers the right only to defendants, next of kin and tenants. Passaic's posted CWPP instructions still describe a nonprofit route. Call the Foreclosure Division at (973) 881-4200 to confirm how the office is handling it now.
Proposed changes to the program have not passed. S2708 and A2233, introduced January 13, 2026, would revise oversight and nonprofit requirements, and both were still listed as introduced and referred to committee. S3938, the New Jersey Online Foreclosure Sale Act, would allow electronic auctions. It was introduced March 12, 2026, and was still in committee when we checked. For now, Passaic sales are still held in person on Tuesdays.
The same rules from the investor's side
For investors at 77 Hamilton Street, the program can make a listed property vanish before bidding opens. When an auction does go forward, the existing risks still apply. The New Jersey Legislature says the former owner has 10 days after the sale to redeem. Third-party buyers owe a $350 Foreclosure Intervention Fund fee. The sheriff's deed does not deliver clear title, so superior liens stay with the property. The law gives investors one advantage. Before a residential sale, the plaintiff has to disclose, if known, whether the property is vacant, tenant-occupied or owner-occupied. If it is vacant and the plaintiff has access, the plaintiff must let the winning bidder in.
Common Questions
Can I use the program if I plan to rent the house out? No. The Passaic County Sheriff's Office states that the program excludes purchases made for investment.
Do I have to pay cash? No. You may finance if a regulated lender has pre-approved you for the upset price. A financing tenant or 84-month owner-occupant also needs the HUD counseling certificate.
If the sale brings more than I owe, where does the extra money go? The Sheriff's Office sends surplus funds to the New Jersey Superior Court Trust Fund Unit. They pay junior lienholders first, and any remainder can go to the homeowner. It can take up to two months for the funds to arrive.
This post explains the process and is not legal advice. The Sheriff's Office itself recommends talking with an attorney who handles these matters.
If a sale date is already on the calendar, the four weeks of notice go quickly. BQUEST Realty works with Passaic County families in English, Spanish and Portuguese to compare a private sale, a short sale or a right-of-first-refusal purchase. We coordinate with your attorney and lender while there is still time. Request your free home valuation to find out where your equity stands before the auction.
