NJ Supreme Court Rules Counties Can’t Charge Extra Title Fees for E-Filing

In New Jersey Land Title Association v. Dana Rone (A-82-18/082620) (Decided February 4, 2020), the Supreme Court of New Jersey held that county clerks and registers may not charge a convenience fee for electronic filing of documents concerning real property. The court did not issue a plenary opinion, but rather affirmed the judgment of the Appellate Division for the reasons expressed in the lower court’s opinion.

NJ Supreme Court Rules Counties Can’t Charge Extra Title Fees for E-Filing

Facts of New Jersey Land Title Association v. Rone

The Essex County Register of Deeds and Mortgages (Essex Register) is responsible for recording and preserving documents affecting real property in Essex County and began accepting electronically filed documents in 2006. The Essex Register incurs costs to accept electronic filing — costs for the maintenance of the document management system as well as additional personnel and equipment expenses to approve, review, record, verify, and issue receipts for electronically filed documents.

When the Essex Register began accepting documents electronically, it did not charge a separate or additional fee for such a filing. In 2016, however, the Essex County Board of Freeholders passed an ordinance allowing the Essex Register to charge a $3.00 convenience fee to offset the cost of electronic receipt transactions.

The New Jersey Land Title Association (Association) filed a complaint in lieu of prerogative writs against the Essex Register seeking two forms of relief: (1) to enjoin the Essex Register from charging the convenience fee; and (2) to compel the Essex Register to disgorge and return all wrongfully charged convenience fees. The trial court held that the convenience fee was authorized by the Government Electronic Payment Acceptance Act (GEPAA) and related regulations. The court also reasoned that the convenience fee was consistent with the rules regarding electronically-submitted documents affecting real property. The Association appealed.

Appellate Division’s Decision in New Jersey Land Title Association v. Rone

The Appellate Division reversed. “The Legislature has prescribed the fees a county register or clerk may charge for the filing of documents, and a convenience fee is not one of the legislatively authorized fees,” the court held. “Accordingly, we hold that a county register or clerk cannot impose such a fee.”

In reaching its decision, the Appellate Division concluded that N.J.S.A. 46:26-1 and N.J.S.A. 22A:4-4 set forth the only authorized fees. Accordingly, that a fee not listed in N.J.S.A. 22A:4-4.1 can’t be charged, and that neither the county nor the register can authorize a new fee for these services. The Appellate Division explained:

[T]he Legislature has explicitly addressed both the fees to be charged to the public and the source of funding from which registers of deeds are to draw if they seek to upgrade or modernize their services. Accordingly, the Legislature has comprehensively preempted the field of filing fees for documents affecting real property. The fees in N.J.S.A. 22A:4-4.1 are, therefore, the comprehensive fees authorized by the Legislature for county registers and clerks to perform their services as the county recording officer. If a fee is not listed in N.J.S.A. 22A:4-4.1, it cannot be charged. 

The Appellate Division rejected the Essex Register’s argument that the GEPAA, which authorizes local government units to impose processing fees for payments made via credit card or other electronic fund transfers, could justify the fee. “The Essex Register is charging the $3 convenience fee to offset the cost of maintaining a web-based system to accept electronically-filed documents,” the court wrote. “The $3 fee is not being used to offset processing charges or discount fees for the use of a card payment system or electronic funds transfer system.” The appeals court also concluded that N.J.A.C. 15:3-9.1 to -9.3, which mandates that all county recorders accept documents electronically, could not serve as the basis for the fee, citing that “the only additional fees that can be collected [under these regulations] are processing fees related to accepting electronic payment.”  

Finally, the Appellate Division rejected the argument that the Essex Register is entitled to collect the fee under the doctrine of quantum meruit.  “[T]he Legislature has established a uniform schedule of fees to be charged by county registers or clerks for the filing of documents affecting real property,” the court explained. “Accordingly, a filer would not reasonably expect to have to make a payment beyond those statutory fees.”  

Finally, the court stated that county registers should seek financial relief from the Legislature and not the courts. “If county registers or clerks believe their offices are incurring costs that are not covered by the fees set forth in Title 22A, their recourse is to petition the Legislature to provide some means to address those costs, by allowing the collection of an additional fee or in some other manner,” it noted.

NJ Supreme Court’s Decision in New Jersey Land Title Association v. Rone

The New Jersey Supreme Court affirmed in a per curium opinion. “The judgment of the Superior Court, Appellate Division is affirmed substantially for the reasons expressed in Judge Gilson’s opinion,” the court wrote.

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