When a legal issue arises, eventually the issue is resolved, either through a settlement or through a court ruling. A notice of settlement is an official document that confirms that a settlement has been reached. But in some instances, a notice of settlement can refer to a pending class action case or a notice that a homeowner is planning to sell or mortgage a property.
TL;DR (Too Long; Didn't Read)
A notice of settlement is typically a notice of legal action being settled or taken, although it can come in various forms depending on the jurisdiction.
Notice of Settlement
There are different types of notices of settlement, varying based on the jurisdiction where they’re being filed and the type of case. A notice of conditional settlement lets the courts know a case has been settled – or will be settled after certain conditions have been met. Notices of settlement are also issued in class action lawsuits, where mailings are sent to all parties who may have an interest in the case.
In New Jersey, notices of settlement are issued before a buyer can take a mortgage on a house. This is designed to keep multiple people from taking a loan on the same property at the same time. The notice of settlement in this case establishes precedence for the first person who files it.
Notice of Conditional Settlement
When thinking of notices of settlement, legal authorities typically think of the notice of settlement of entire case that is issued in many states. This notice can have two types: conditional and unconditional. A conditional settlement means that the case can be dismissed after certain conditions have been met, while an unconditional settlement closes the case.
You’ll need to follow specific timelines and laws when it comes to filing notices of settlement. In California, for instance, the notice must be filed within 45 days if the settlement was unconditional, and conditional settlements will include a date, input by the filer, as to when the request for dismissal will be officially filed after conditions are met. The notice can’t be filed by someone who is a party in the lawsuit.
Class Action Lawsuit Notifications
At some point, you’ve likely received paperwork in the mail letting you know about a class action lawsuit that may affect you. That letter typically will have the words notice of settlement somewhere on it. The court is required by law to direct that this notice be issued to every person who may have an interest in the settlement.
In this case, a notice of settlement will typically tell you about the proposed settlement, as well as offer direction on where you can find detailed terms and conditions. There will also be details of hearing times to allow you to show up if you choose. You have the right to object to the proposed settlement, and the notice of settlement will let you know how to do so.
Notice of Settlement NJ
There is another use of this type of legal paperwork. A notice of settlement in NJ refers to a document that is filed to let people know that an owner is going to either sell or mortgage a property. This is designed to keep someone from taking a mortgage on a property that already has a mortgage on it, but the deed simply hasn’t been recorded yet.
If you’re either buying or selling a home in New Jersey, your lender will require you to file a notice of settlement with NJ authorities before the loan can close. Once that notice has been filed, it will establish that lender’s place as having the intention to begin loan proceedings. Therefore, the notice of settlement allows a lender to take priority over any requests that come in afterward.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.