New Jersey's "Gap Coverage"-Notice of Settlement
Posted on Aug. 30, 2012

In that awkward dance between counsel negotiating how to cover the gap between closing and recording for the “New York” or “Table” style closing, New Jersey provides an elegant solution—the Notice of Settlement.

The Notice of Settlement gives notice of an impending sale, conveyance or mortgage.  Once the notice is recorded, the statute provides that any person claiming an interest that arises during the time that the notice is effective is deemed to have acquired that interest with knowledge of the impending sale or mortgage and that person’s interest shall be subject to the interest created by the conveyance or mortgage for which notice was given (provided that the deed or mortgage is recorded while the notice is effective).  Typically, the notice is filed several weeks before the intended closing and is effective for a period of sixty days after recording, with the option to extend for one additional period of sixty days.

Recently re-enacted as N.J.S. § 46:26A-11, the statute provides a form of notice and instructions for execution:

The notice of settlement shall be signed by a party to the settlement or a party’s authorized representative and shall state the names of the parties to the settlement and a description of the real property.  If the notice is executed by anyone other than an attorney at law of this State, the execution shall be acknowledged or proved in the manner of acknowledgment or proof of deeds.

N.J.S. § 46:26A-11(b).

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jimAttorney James W. Peters

Jim has handled retail, distribution center, warehouse, storage facility and fuel center transactions from the eastern seaboard to the Pacific Coast and beyond.

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