New Jersey’s Uniform Fraudulent Transfer Act (UFTA) allows a creditor to seek property, even after a debtor has transferred it to another, if inadequate consideration is given or the transfer is made to defraud the creditor. See N.J.S.A. §25:2-20 et seq. Under UFTA, a creditor may move to challenge a transfer made with actual intent to hinder, delay or defraud within the applicable period of repose, which is four years from the date of the transfer or one year from its discovery, whichever is later. See N.J.S.A. §25:2-31(a).
Recently, the Appellate Division confronted a case in which a creditor challenged a debtor’s transfer of real property to his sister for no consideration five years after the debtor executed the deed but three years after the deed was recorded. See Nationwide Registry & Sec. v. Melhem (N.J. Super. Ct. App. Div. Mar. 11, 2016). In the case, the Appellate Division held that the debtor did not transfer the property under the UFTA until the deed was recorded. This decision provides another example of New Jersey’s version of UFTA, which gives creditors greater rights as to the period of repose when compared with other states.
