b. In an action brought pursuant to subsection a. of R.S. 54:5-86, in order to preserve any equity that may exist in the property being foreclosed, the owner, or the owner's heirs, shall have the right to demand, by written request to the Superior Court before the date that the final judgment is entered, that the holder of the tax sale certificate foreclose the right to redeem that certificate in the same manner as a mortgage through a judicial sale as in the manner of the foreclosure of a mortgage of the property through the office of the county sheriff or, in the alternative, through an Internet auction of the property through the office of the county sheriff. The final judgment shall provide for a writ of execution to the sheriff of the county in which the property is located and the holding of either a judicial sale or an Internet auction. In the event that the owner or the owner's heirs do not demand a judicial sale or an Internet auction, the owner of the tax sale certificate may proceed under subsection a. of this section and foreclose without a judicial sale or an Internet auction, and the owner and the owner's heirs shall have no claim against the holder of the tax sale certificate for any equity in the property. The amount received through the judicial sale or the Internet auction, as appropriate, shall be conclusively presumed to be the fair market value of the property. In the event that no one bids on the property through the judicial sale or the Internet auction, and the owner of the tax sale certificate obtains fee title from the sheriff, it shall be conclusively presumed that there is no equity in the property. In the event that the sheriff has not established an Internet auction, the owner or the owner's heirs shall only be entitled to a judicial sale as in the manner of the foreclosure of a mortgage.The sheriff of the county shall deposit with the clerk of the Superior Court any surplus funds derived from the judicial sale or the Internet auction, as appropriate, after the holder of the tax sale certificate has been paid the redemption moneys, allowable costs, and attorney's fees as set forth by the court in the final judgment of foreclosure. The sheriff shall deduct the costs to the office of the county sheriff of holding the judicial sale or the Internet auction, as appropriate, which shall have been withheld by the sheriff from those funds. The process set forth in this section shall be the exclusive method through which the owner, or the owner's heirs, may assert a claim to any surplus funds by motion to the Superior Court.
Application for, and distribution of, surplus moneys held by the clerk of the court shall be made in accordance with N.J.S. 2A:50-37 and the applicable Rules of Court.
Notwithstanding the provisions of N.J.S. 2A:50-64, interest shall continue to accrue on the tax sale certificate pursuant to R.S. 54:4-67 through the date of actual payment.
As used in this section, "surplus funds" shall mean and include any funds derived from the judicial sale as in the manner of the foreclosure of a mortgage or the Internet auction through the office of the county sheriff of a property pursuant to this section, after the holder of the tax sale certificate has been fully redeemed, and paid moneys due and owing to the holder of the tax sale certificate. The redemption amount shall also include any costs charged by the sheriff to the holder of the tax sale certificate to conduct the judicial sale as in the manner of the foreclosure of a mortgage or the Internet auction.