March 2025 CT

COMMUNITY WEALTH... from page 22.

talization through the restoration of vacant and abandoned property to create or preserve affordable housing.” Noble as the legislature’s intentions may have been, the CWPP has caused serious concern among many in govern ment and the private sector who are familiar with the fore closure process. Sheriff’s sales have seen an onslaught of “Nonprofit Community Development Corporations,” many of which satisfy the minimal requirements of the CWPP, but whose actual motives are less clear. The concerns are so great that, as of this writing, two counties (Ocean and Atlantic) have stopped applying this section of the CWPP entirely. Regardless of whether “Nonprofit Community Develop ment Corporations” truly exist for “community revitaliza tion,” the CWPP has at least two significant implications for community associations. The first is financial. Community associations often record liens against properties when the owners are delinquent. When a property is sold at sheriff’s sale and the sale price exceeds the upset price, the differ ence between the sale price and the upset price is held by the state as “surplus funds.” Associations that recorded

fair market value. This is a simplistic illustration, but count less similar circumstances have unfolded across the state since the CWPP went into effect in January 2024. The legislative goal behind this section of the CWPP is to allow qualifying “Nonprofit Community Development Corporations” to acquire foreclosed properties at a reduced price, so that they can either permit the former owners to

continue living there, or lease or sell the property subject to affordable housing restrictions. To qual ify, a corporation must be a tax-exempt nonprofit entity under Section 501(c)(3) of

“...the CWPP has at least two significant implications for community associations.”

the Internal Revenue Code, and its IRS filings must indicate that the mission of the corporation includes “community revi

CONTINUES ON PAGE 26

24

MARCH 2025