Renovations And Reckonings: Navigating Unjust Enrichment In Property Disputes

• Published date: 19 March 2024
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Real Estate and Construction, Tax, Charges, Mortgages, Indemnities, Financial Services, Arbitration & Dispute Resolution, Real Estate, Tax Authorities
• Law Firm: Riker Danzig LLP
• Author: Mr Michael O'Donnell, Kevin Hakansson, Thomas J. Persico and Kori Pruett

Introduction

In February 2024, the New Jersey Appellate Division affirmed a trial court's decision on a motion to dismiss rejecting a property owner's unjust enrichment claims. The claims related to costly improvements made while the trial court's order vacating final judgment in a tax foreclosure was on appeal. The decision was reversed, vesting title in the tax certificate holder. This decision reminds us that under the doctrine of unjust enrichment, there must be an expectation of compensation from the party against whom relief is sought. Adar Aleph, LLC v. TDJP Props., LLC, No. A-1727-22, 2024 N.J. Super. Unpub. LEXIS 245 (Super. Ct. App. Div. Feb. 16, 2024).

Background

Adar Aleph ("Adar") owned property in Barnegat, New Jersey. After he failed to pay his taxes, Barnegat Township sold a tax sale certificate on Adar's property to TDJP Properties ("TDJP"). TDJP eventually moved forward with a foreclosure action on the property, on which Adar defaulted. After failing to redeem the tax sale certificate, judgment for...