LAKEWOOD, NJ – A Lakewood religious school has prevailed in a protracted legal dispute with the township over its property tax status, with a state tax court ruling that the property’s tax sale certificate must be set aside and its exemption recognized.
The ruling caps a six-year battle between Yeshiva Shvilay Hatalmud Inc. and the Township of Lakewood over whether the school’s property qualified for a tax-exempt designation.
The dispute, which began in 2018, stemmed from the township’s initial denial of the yeshiva’s request for tax exemption, prompting the school to file annual complaints through 2023.
Key Points
- Yeshiva Shvilay Hatalmud won recognition of tax-exempt status for its property in Lakewood.
- The court voided a tax sale certificate issued by the township in 2023, citing precedent that liens cannot exist where no taxes are owed.
- The school is seeking refund of more than $110,000 in payments made from 2018 through 2021.
Court affirms exemption and voids tax sale
Tax Court Judge Cimino ruled that the 2023 tax sale certificate sold by the township for unpaid 2022 taxes was invalid because the property was, and remains, tax-exempt. The ruling cited prior case law, including Brinkley v. Western World Inc. and Hudson County Park Comm’n v. Jacobson, which establish that tax liens on exempt property are void from inception.
Lakewood officials had previously sold a certificate for the unpaid 2022 taxes, valued at more than $69,000, which included interest and penalties through part of 2024. The township intended to apply a portion of a refund owed to the yeshiva to redeem the certificate.
Refund dispute remains
According to filings, Yeshiva Shvilay Hatalmud paid more than $110,000 in taxes, interest, and penalties covering the years 2018 through 2021. The school is seeking repayment of those amounts, arguing the property should have been recognized as exempt throughout the period in question.
The court noted that Lakewood did not oppose the yeshiva’s motion or provide a detailed accounting disputing the payment records. A worksheet prepared by the township confirmed the total amount paid, supporting the yeshiva’s claim.
Legal precedent supports ruling
In referencing Brinkley and Hudson County Park Comm’n, the court reaffirmed that once property is deemed exempt, any associated tax liens or certificates lose validity. Both prior rulings underscore that municipalities cannot enforce liens on tax-exempt properties, and any certificates issued under such circumstances are void ab initio—invalid from the outset.
The decision directs that the municipality refund the certificate purchaser under state law, N.J.S.A. 54:5-43, and return the funds collected from the yeshiva during the disputed years.
Township silent as case concludes
Despite being given multiple opportunities, the Township of Lakewood did not file opposition papers or request further adjournments before the court rendered its decision. The certificate holder also failed to respond to the court’s order to show cause.
With no challenges filed, Judge Cimino granted the relief sought by Yeshiva Shvilay Hatalmud, marking the end of a multi-year legal dispute that tested the limits of municipal authority in tax-exempt property enforcement.