Becker & Poliakoff Wins Multi-Million Dollar Jury Verdict In Landmark Construction Case

June 5, 2017, 9:43 am

≫ Next: Article 3

$

0

0

FOR IMMEDIATE RELEASE
Media Contacts:
Kris Conesa or Andi Phillips
Roar Media
kconesa@roarmedia.com or aphillips@roarmedia.com
(305) 975-5934 or (305) 401-5098

Jury Finds Subsidiary of National Developer Hovnanian Enterprises Inc. Liable for Breach of Contract and Violation of the New Jersey Consumer Fraud Act 

MORRISTOWN, NJ & FORT LAUDERDALE, Fla. – June 5, 2017– Becker & Poliakoff secured a landmark $9 million-plus jury verdict Thursday against a subsidiary of Hovnanian Enterprises, Inc. (NYSE: HOV). The award includes punitive (treble) damages for violation of the New Jersey Consumer Fraud Act and also entitles the plaintiff to recover attorneys’ fees, costs and prejudgment interest. The jury found that Hovnanian Enterprises used the subsidiary as an instrument to commit a fraud or injustice on purchasers of condominium units. The ultimate recovery against all parties, including the project architect and geotechnical engineer, could exceed $20 million.

After a six-week trial in New Jersey Superior Court (Docket No. HUD-L-2560-13), the jury agreed that Hovnanian, after learning that the condominium building was being improperly constructed with plywood flooring in violation of the building code, chose to nevertheless continue construction. Hovnanian then sought to reclassify the building type. The jury agreed with the plaintiff’s position that the reclassification was never approved by governmental authorities. The units were then sold without disclosing the code violations or the lack of approval to the buyers. The claim arose out of construction problems with the six-story, 132-unit residential and commercial building in Port Imperial, West New York, NJ.

Matthew Meyers, a Shareholder in Becker & Poliakoff’s Morristown office, represented the homeowners and initiated the suit against Hovnanian. “Hovnanian knew that the use of combustible materials in the flooring was in violation of the building code, and instead of fixing the mistake, attempted to change the building’s classification. They then sold units knowing that the change in classification had never been approved. They continued to arrogantly defend their conduct at trial but the jury would have none of it. Hopefully, after this verdict, Hovnanian will get the message.”

“A key point making this landmark case particularly unique is that the parent company, Hovnanian Enterprises, was found to have used its shell subsidiary to perpetrate an injustice on the condominium unit buyers,” said Becker & Poliakoff shareholder John Cottle, who was first chair/lead trial counsel in the case representing the homeowners. “This is a rare instance in which the ‘corporate veil’ was pierced, and we expect the result of this will be that Hovnanian Enterprises will ultimately be held responsible for the judgment.”

In addition to Cottle, the Becker & Poliakoff trial team from Florida included: Perry M. Adair, Miami managing shareholder and a board-certified construction law attorney; and Sanjay Kurian, a shareholder and board-certified construction law attorney. The New Jersey team included Vincenzo Mogavero, a shareholder and litigation Chair and Martin Cabalar, in addition to Mr. Meyers. 

About Becker & Poliakoff
Becker & Poliakoff, with headquarters in Fort Lauderdale, Fla., is a multi-practice commercial law firm with attorneys, lobbyists and other professionals at offices across the United States. More information is available at www.bplegal.com.

---

Article 3

July 14, 2017, 8:47 am

≫ Next: Q&A: Unsightly Neighboring Property

≪ Previous: Becker & Poliakoff Wins Multi-Million Dollar Jury Verdict In Landmark Construction Case

$

0

0

Q&A: Handling Requests for Emotional Support Animals

Q:

I live in a 40-unit condo building, which has a NO PET AMENDMENT from 1980. A woman recently purchased a unit and has been seen with a dog that barks all the time. She signed all the disclosure forms that stated “no pets” and had given the Board a note from a nurse practitioner that the dog is an emotional support animal. What can we do?

A:

The Federal Fair Housing Act (42 U.S.C. §§3601-3619) and the regulations promulgated thereunder require “housing providers,” including entities such as condominium associations in New Jersey, to make “reasonable accommodations” to disabled persons in rules, policies, practices or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling. New Jersey’s Law Against Discrimination (N.J.S.A.10:5-1 et seq.) similarly requires accommodation of the disabled.  Decisions of federal and state courts in interpreting the Federal Fair Housing Law and New Jersey’s Law Against Discrimination have held that in certain instances housing providers, such as a condominium, must accommodate those with a legitimate physical or emotional disability requiring the support or assistance of an animal.

Notwithstanding, simply providing a note from a nurse practitioner stating that “the dog is an emotional support animal,” does not provide the governing body of a condominium the reasonable opportunity to establish that the resident suffers from a disability defined by law; and, further, requires the physical assistance or emotional support of a dog to reasonably accommodate their disability. Thus, in this instance, it likely would not be unreasonable for the association to request additional information to allow its governing body to evaluate the reasonableness of the request.

For example, the association may reasonably request that the resident provide a certification of a Physician or other qualified Treating Professional certifying: (a) the disability or handicap suffered (b) said disability or handicap meets the standards set forth by the Federal Fair Housing Act; (c) to the major life activities substantially limited by the disability or handicap; (d) whether treatment is available for the disability or handicap; (e) to the description of the accommodation requested; (f) as to whether the accommodation requested alleviates or mitigates the disability or handicap; and, (g) as to whether any alternative accommodations exist. If, upon receipt of such additional information, the association concludes that the resident is disabled under the law and that the physical assistance or emotional support of the identified animal is reasonably necessary to accommodate the disability, then approval of the accommodation is required by law.

Where an accommodation is required by law, the resident is still required to maintain the animal in accordance with existing rules and regulations; which often include, among other requirements, that residents permit no activity that creates a nuisance or annoyance to other residents. Such rules require the resident to take all actions necessary to prevent the animal from making noise that may unreasonably annoy or disturb the peace of neighboring residents.

Keep in mind that where an accommodation is required to be made by law, the animal is not considered a “pet.” Rather, it is an animal that the resident has claimed is required under the law for the physical assistance or emotional support for the disability that the resident is afflicted with. Therefore, the governing board of a community association should seek the advice of legal counsel before denying the request of a resident for a physical assistance or emotional support animal. The association’s legal counsel is best suited to advise and assist the governing board with implementation of appropriate procedures should the board receive such a request.  

Q&A: Unsightly Neighboring Property

July 21, 2017, 1:12 pm

≫ Next: Q&A: Scheduling of Annual Meetings

≪ Previous: Article 3

$

0

0

BY: J. DAVID RAMSEY 

Q. We want to clean up the property next door to our association. The association does not own the property. It's less money to just have it cleaned up compared to getting the current owner to clean it up. We would have permission from the owner. As a board can we approve or do we need to advise all the owners for their input?

A.  There are several variables that need to be resolved to know whether spending the Association’s money is appropriate and lawful in this case.  First, while you state that the adjoining property needs to be “cleaned up,” you do not indicate whether this is a matter of cleaning brush, or whether there might be old cars there, perhaps an old barrel that held an unknown substance, etc.  If there is any chance that there is something like old vehicles, in connection with which you do not know who holds the title, or any materials that might constitute a “hazardous substance” under federal or state law, we would recommend against becoming involved in any way, since the possibility of serious liability is much too great.

Assuming that the issue is limited to cleaning up overgrown vegetation and the association has written permission from the owner to undertake the cleanup that details exactly what the owner is agreeing to allow the association to do, you need to ask two additional questions.  First, do the governing documents permit the Association to expend money for this purpose?  Typically there are two places to look for an answer to this question.  One would be in a provision that refers to the budget and the purpose of the expenses the association can include in the budget.  Secondly, there is usually a section of the bylaws setting forth the duties, powers and authority of the board.  In some instances these are stated permissibly, in other words suggesting that the board has, at a minimum, these powers.  Other times the section of the bylaws is stated in such a manner so as to limit the powers of the board.

Finally, there also needs to be a determination by the board that this is truly an association matter.  Is this to help a small portion of all the unit owners, but does not impact the vast majority of owners?  Is there a board member that is impacted and that is why the board is considering this action?  How much money would actually be spent?  If the amount is relatively nominal given the scope of the association’s budget and it is for the general benefit of the association that suggests one direction, but if it benefits few owners or it were to particularly benefit a member of the board, it suggests a different answer.

There are enough complexities in this issue that we would urge the board to consult with legal counsel before taking action.

Q&A: Scheduling of Annual Meetings

July 31, 2017, 3:58 pm

≫ Next: Benefits of the Municipal Services Act

≪ Previous: Q&A: Unsightly Neighboring Property

$

0

0

By: J. DAVID RAMSEY

Q. We're not prepared for our annual meeting which is in August. We'd like to reschedule for September. Can we do that or should we just have an unprepared annual meeting in August to just say we had one?

A. While we would normally not advise a board to ignore the requirements of the governing documents, assuming there is no ulterior motive for delaying the annual meeting – for instance, the board desires to obtain bids on a large contract and award it before new members who are opposed to the contract might be elected to the board – then our usual advice in this situation would be to schedule the meeting on the earliest date that you know you would be prepared to have the meeting.  Most  bylaws contain an agenda for the annual meeting.  The board’s preparation for the meeting need not include anything not listed on the bylaws agenda.  Also keep in mind that if there are matters beyond the agenda, for instance, the preparation of, and vote on, an amendment to your governing documents, a special meeting of the members may be scheduled for that and it need not be undertaken at the annual meeting.

While bylaws often contain language that requires the annual meeting to be on a specific day of a particular month, there is little relief an owner can seek for delaying the meeting by a reasonably short period of time.  It may also be that since August is a peak vacation month, it may be difficult to obtain a quorum for the meeting.  Under some state statutes an owner dissatisfied that the annual meeting is not being held consistent with the requirements of the bylaws may go to court and obtain an order requiring the annual meeting to be held on a specific date; but it is unlikely that a court would schedule it earlier than you are planning and, typically, under statutes that provide for this, there is no penalty to the board or the association for failing to have held the meeting earlier. 

Benefits of the Municipal Services Act

August 4, 2017, 3:04 pm

≫ Next: New Legislation to Enhance Owner Participation in Community Association Elections

≪ Previous: Q&A: Scheduling of Annual Meetings

$

0

0

Many communities are either not receiving the benefits of the Municipal Services Act or are being substantially shortchanged by the municipality in reimbursements due

BY: MARTIN C. CABALAR

New Jersey’s Municipal Services Act (the “Act”), N.J.S.A. 40:67-23.2 – 23.8, requires that every municipality provide “qualified private communities” with certain municipal services on its roads or streets or reimburse those communities for such services.  The purpose of the Act is to eliminate double payment for services (such as snow and ice removal, lighting of the roads and streets and collection or disposal of garbage, recyclables and leaves) by residents who pay for them through both their property taxes and association common expenses.  The vast majority of condominiums, as well as other community associations in the State of New Jersey, meet the requirements of a “qualified private community,” as defined in the Act.

If the municipality chooses to perform the designated services, it must do so in the same fashion as it does throughout the municipality.  However, if the municipality selects the reimbursement option under the Act, the municipality enters into a written agreement with the Association to reimburse it annually for the municipality’s actual cost (not that of the Association’s) to obtain the covered services.  While these costs may be significantly less than the Association’s cost to hire private contractors, as is often the case, many municipalities reimburse communities amounts which do not reflect the true full costs to the municipality.  For example, costs associated with the services should include and take into consideration direct and indirect costs such as: labor (straight and overtime), supervisory and administrative personnel, employee benefits, materials, fuel and oil, vehicles and equipment, and the housing of vehicles and equipment and maintenance of same.   Moreover, in some circumstances, a community may be entitled to greater reimbursements when taking into consideration certain “difficulty” factors, such as the steepness of the roads. 

Those communities that do not currently have an agreement in place with the municipality may be entitled to significant monetary sums for the prior years the municipality failed to either provide services or reimburse the community for same.  For newer developments, it is important to keep in mind that it is not necessary that the roads meet municipal standards/specification or that they be accepted by the municipality for dedication for the Act to apply.  In such circumstances, the municipality still has a duty to reimburse the community. 

Despite the enactment of the Act in 1993, many communities are either not receiving the benefits of the Act or are being substantially shortchanged in the municipality’s calculation of the costs for such services.  For this reason, it is important that communities have counsel who specialize in common interest communities, such as those at Becker & Poliakoff, LLP, to carefully negotiate with a municipality in order to assure they receive the maximum amount to which they are entitled.  

New Legislation to Enhance Owner Participation in Community Association Elections

August 17, 2017, 2:54 pm

≫ Next: Q&A: Mandatory Evacuation During a Hurricane?

≪ Previous: Benefits of the Municipal Services Act

$

0

0

BY: J. DAVID RAMSEY

On Thursday, July 13, Governor Christie signed legislation to enhance owner participation in community association elections. The CAI Legislative Action Committee, with Community Association Practice Chair, Dave Ramsey, leading the effort, worked side-by-side with Senator Gordon, the primary sponsor of the bill, to ensure that the final version of the law would be balanced and not impose undue burdens on community associations while making the election process democratic where it currently isn’t. Only through an eleventh-month effort and the willingness of Senator Gordon to listen to, and accommodate, CAI’s concerns was this able to occur.

A few important features of the new law:

• Although the law is effectively immediately, the implementation of portions of the bill that may require associations to modify some procedural aspects of their election process are delayed until October 1, 2017 to give associations an adequate opportunity to prepare.
• Subject to certain exceptions, in those few associations where the owners are not members of the association, effectively immediately, they are.
• Starting with elections occurring after October 1, Unit owners in good standing will have the right to nominate themselves or other owners in good standing. Bylaws requiring nomination by a Nominating Committee or requiring the signing of a petition by other owners will no longer be required, though Nominating Committees may continue to nominate owners for election to the board – but not exclusively.
• Certain time periods are statutorily imposed, including notices seeking nominees for the board must be sent to all owners not less than 30 days before the notice of the election meeting is sent.
• Notice of the election meeting must go out 14 or more days before the meeting but not more than 60 days before (this impacts many associations that previously had a minimum time notice period of 10 days).
• Board members’ names must be listed alphabetically on all ballots.
• Electronic voting in board elections is statutorily authorized and electronic notice of meetings is also authorized if permitted under the bylaws.
• In a provision unrelated to elections, governing boards may amend bylaws without a vote of the owners in two methods: First, it may amend the bylaws to be consistent with federal, state or local law. Second, it may propose an amendment to the bylaws together with a ballot to reject the amendment and if not more than 10% of the owners’ vote, within 30 days, to reject the bylaws amendment, it becomes enacted.

A number of other parties also voiced concerns about the new law, including the Department of Community Affairs and the New Jersey Builders Association. While a number of language clarifications from each of those parties were accepted, through the efforts of the Legislative Action Committee provisions that were overly burdensome or had negative impacts on community associations were successfully fended off. While there were numerous association election bills posted in the Senate and Assembly this year, most of which would have imposed significant burdens on associations were therefore unacceptable to CAI, only this bill reached the Senate and Assembly floors for a vote, and passed each house unanimously.

Look forward to a future article by Dave Ramsey in Community Trends providing additional details about this bill and a CAI program in late August in which he will provide information concerning important exceptions to the law and tips on how to take advantage of certain beneficial provisions in it.

Q&A: Mandatory Evacuation During a Hurricane?

September 19, 2017, 2:16 pm

≫ Next: Q&A: Enforcement of Violations

≪ Previous: New Legislation to Enhance Owner Participation in Community Association Elections

$

0

0

BY: J. DAVID RAMSEY

Q.  Can we order our residents to evacuate our association in cases of things like hurricanes? Does a state emergency order play a role? If the state orders a mandatory evacuation can we fine residents who remain?

A.  Generally, if the State or local authorities have not issued an evacuation order, the answer is no.  Unless your governing documents had an unusual provision granting the board the authority to issue an evacuation order, absent a government order of evacuation, the board would not have the authority to issue such an order.  Typically, the powers of a board are far greater with respect to the use of the common elements as opposed to the use of the units.  A board cannot unilaterally tell an owner that he or she must leave their own home, when the governmental entity hasn’t made that determination.  If the State has issued a mandatory evacuation order and your governing document require an owner to comply with all law, then it might be possible to fine an owner for failing to evacuate. If, though, an owner didn’t evacuate and it did not cause the association or fellow owners any harm, it would appear to be an overreaction to a situation where the association’s efforts might be better targeted towards recovering from the hurricane, rather than seeking to fine owners who failed to evacuate.

Q&A: Enforcement of Violations

September 21, 2017, 7:50 am

≫ Next: Does Your Homeowners Association Have Adult Only Swims

≪ Previous: Q&A: Mandatory Evacuation During a Hurricane?

$

0

0

BY: J. DAVID RAMSEY

Q. One resident constantly complains about another resident who is in violation of a HOA rule. As a board we are aware of the violation but allow the situation because of the personal situation involved. We have communicated to the complaining resident we do not wish to discuss why we allow this violation. Do we have to provide an answer?

A.  Very often, seemingly small changes in the facts of a matter can make a significant difference in the correct legal advice.  For instance, your question indicates that a resident is complaining about a violation of a “rule.”  It makes a difference whether the rule is a restriction contained in your HOA’s declaration, or a rule that the governing board adopted.  Generally, the board has a higher duty to enforce the declaration’s restrictions, then it does in connection with its own rules, with respect to which it has greater flexibility. 

Further, you indicate that board would prefer not to aggressively pursue the rule violation because of a personal situation impacting the owner against whom a violation is alleged and you prefer not to divulge the reason for the board’s inaction to the complaining owner.  The nature of the personal situation may be meaningful in providing an answer to your inquiry.  For example, assuming, hypothetically, the rule in question involves a restriction against creating excessive noise, but the resident making the noise needs to have temporary medical equipment that is the cause of the noise.  Depending on all the facts, it may be that the person causing the noise is entitled to an accommodation under the Federal Fair Housing Act.  In such a case the board would be obligated to allow an accommodation in the enforcement of the restriction if it is “reasonable” to do so.  Further, the law concerning making accommodations to people who are disabled prohibits the disclosure of confidential information concerning the disability – although it doesn’t prohibit the board from stating that it is obligated to make an accommodation because there is a claim of disability, without providing details. 

Another example might be that the HOA has a restriction against conducting any business from a home.  Perhaps the owner is out of work and is a professional who can’t afford to rent an office. Therefore, the owner opens her business from her home.  As a result, that owner starts seeing clients from her home and has a secretary working from the house.  In that case, there is no law that protects that activity and the board has a duty to take reasonable action to enforce the restrictions.  In order to avoid a costly legal dispute with the owner conducting the business, the board may lawfully provide the offending owner with a reasonably short period of time – say, for instance, 30 days – thereby giving that owner an opportunity to earn some income but also require that she find another location for his or her business. 

While the board may be empathetic to an owner facing personal difficulties, it still has a duty to enforce the restrictions contained in a declaration.  The law doesn’t mandate that a board show no humanity to their fellow residents by temporarily allowing a violation, particularly if the violation is technical in nature and does not cause any harm to the welfare of the other residents.  Ultimately, however, the board has the duty to enforce the use restrictions, particularly where another owner is validly complaining about a violation and no law protects the violating owner.  Because these situations can be nuanced and the correct answer depends on an analysis of all of the facts, we urge you to discuss this with an attorney who specializes in community association law.

---

Does Your Homeowners Association Have Adult Only Swims

October 6, 2017, 9:04 am

≫ Next: Did the New Jersey Supreme Court Reduce the Time for a Common Interest Community to Assert Construction Defect Claims?

≪ Previous: Q&A: Enforcement of Violations

$

0

0

Did you know that adult only swims in homeowner associations can be discriminatory?

The Federal Fair Housing Act [the “Act”] prohibits policies that discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services, or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.  “Familial status” under the Act, is defined as one or more individuals under the age of 18 being domiciled with a parent or any another person having legal custody.  Hence, the issue concerns status and not age. As such, any policy that intentionally  discriminates against families with children or a policy although neutral on its face, has a discriminatory impact, is prohibited. Courts have found that rules that limit children's access to common amenities, based solely on the fact that the children are under 18, violate the Act. An adult only swim may be found to be facially discriminatory because it treats  children and families with children differently and less favorably than households composed of adults only.  Hence, a blanket adult only policy, based upon the desire to enjoy the pool with peace and tranquility, may be found to be discriminatory.

#condominium
#FHA
#discriminatory
#familial status
#adultonlyswim
#homeownerassociation
#BeckerandPoliakoff

Did the New Jersey Supreme Court Reduce the Time for a Common Interest Community to Assert Construction Defect Claims?

October 12, 2017, 7:01 am

≫ Next: Q&A: Access to Financial Documents

≪ Previous: Does Your Homeowners Association Have Adult Only Swims

$

0

0

BY: MARTIN C. CABALAR

On September 14, 2017 the New Jersey Supreme Court issued a long anticipated decision in the matter of The Palisades at Fort Lee Condominium Association, Inc., v. 100 Old Palisade, LLC (“Palisades”). The decision may have an immediate impact on recently constructed condominiums, or those to be constructed in the future, that have construction deficiencies. While innately fact-driven and evidence specific,[1]Palisades held that the six-year statute of limitations on a condominium association’s direct claims against a developer’s contractors and design professionals for construction defects begins to run upon the latter of six-years from: (a) substantial completion of the contractor’s work, or (b) when the “owner” knows, or should have known through the exercise of reasonable diligence, of the existence of a claim. 

Remarkably, the Palisades use of the term “owner” was not exclusive to the condominium association, but included the original owner of the property – i.e. the developer. In other words, the Court posited that causes of action accrue when someone in the chain of ownership, including the developer, first knows or reasonably should know of a defect and the party responsible therefore, even if transition to unit owner control had not yet occurred. Thus, although Palisades was decided on its peculiar facts, the decision opens  the possibility that direct claims by a condominium association against a developer’s contractors and design professionals could expire long before transition of control to the unit owners. 

It is not realistic to suggest that a developer would initiate an action against itself, or its contractors and design professionals, prior to transitioning control to the unit owners. Yet, in certain circumstances, this is precisely what Palisades requires to preserve the association’s claims against the developer’s contractors and design professionals. Many reading this may say, “So what, the developer is responsible and will still have to pay for the construction defects.” While it is true that the condominium association would likely still have various viable claims against its developer in such circumstances, the developer is likely a single purpose entity with little to no asserts. It is also likely that the developer failed to reserve significant funds to address warranty and other related construction defect claims. 

In light of Palisades, if your association is currently experiencing problems due to potential construction or design defects it is suggested that you seek the advice of counsel immediately. Though the developer may ultimately still be responsible, to the extent that you may also have direct claims against the developer’s contractors and design professionals, you may need to initiate litigation sooner rather than later. 

---

[1] The full opinion can be downloaded at: http://njlaw.rutgers.edu/collections/courts/supreme/a-101-15.opn.html. 

Generally, in New Jersey, a condominium association has six years from the date the developer transfers control to the owners to bring a claim against the developer for deficiencies in the design and construction of the common elements. While Palisades does not appear to change this well-settled law, the Supreme Court has called into question years of trial and appellate decisions that held that the same tolling applied to claims by a condominium association against a developer’s contractors and design professionals. 

Q&A: Access to Financial Documents

November 1, 2017, 11:30 am

≫ Next: Hudson County Court Distinguishes Controversial Palisades Decision

≪ Previous: Did the New Jersey Supreme Court Reduce the Time for a Common Interest Community to Assert Construction Defect Claims?

$

0

0

BY: MARTIN C. CABALAR

Q: How often do HOAs need to provide financial reports that include a balance sheet, receipts for work contacted and bank statements to the contributing members?

A: It is not readily apparent from the question whether the reader is asking on behalf of a condominium association, or a homeowner’s association, as many use the term “HOA” interchangeably. Here, however, the answer is the same for both.

The New Jersey Condominium Act (“Condominium Act”) requires condominium associations to maintain accounting records, “in accordance with generally accepted accounting principles [GAAP], open to inspection at reasonable times by unit owners.” According to the Condominium Act, such records include “(i) a record of all receipts and expenditures and (ii) an account for each unit setting forth any shares of common expenses or other charges due, the due dates thereof, the present balance due, and any interest in common surplus.” Thus, all those records required to be kept in accordance with GAAP, should be made available for inspection by any member upon request. New Jersey case law has also found that the right of access set forth in the Condominium Act applies to other types of associations, such as cooperative and homeowners associations.

Importantly, the Condominium Act only requires that documents kept in accordance with GAAP be open to inspectionupon reasonable notice. Thus, there is no requirement under the law to provide financial reports to members of an association, unless your governing documents specifically require that you do so. For example, many Bylaws require community associations to conduct an annual audit and distribute same to its members. If your Bylaws do not have such a requirement, then documents such as balance sheets, receipts for work and bank statements need only be open to inspection.

Finally, while the Condominium Act is silent as to whether owners have a right to make copies, and New Jersey case law has not resolved this precise issue, the New Jersey Department of Community Affairs takes the position that the right of inspection includes the right to copies of those documents. Thus, we recommend that you allow members to make copies of financial records that are required to be open to inspection. And, unless your Bylaws provide otherwise, the association may charge the cost for the copying. 

Hudson County Court Distinguishes Controversial Palisades Decision

December 12, 2017, 8:54 am

≫ Next: Q&A: Charging for Copies of Financial Documents

≪ Previous: Q&A: Access to Financial Documents

$

0

0

On December 7, 2017, a Hudson County Superior Court Judge, in the matter of Grandview II at Riverwalk Port Imperial Condominium Association, Inc. v. K. Hovnanian at Port Imperial Urban Renewal III, LLC, et al, Docket No. HUD-L-2839-14 ("Grandview II"), denied summary judgment to an architect retained by the developer who argued that the statute of limitations barred the association's claims pursuant to the Supreme Court's controversial decision in the matter of The Palisades at Fort Lee Condominium Association, Inc., v. 100 Old Palisade, LLC (“Palisades”)[1] because the developer knew of the defects more than six-years prior to the lawsuit being filed. In denying summary judgment, the Court specifically held that Palisades (1) was factually distinguishable from a project such at Grandview II that was originally developed as a condominium with the intent to transition the operational control to an association in the future and (2) did not modify the long standing rule that claims by a condominium association against the developer, its design professionals and subcontractors do not accrue until transition. Citing Terrace Condominium Association, Inc. v. Midlantic National Bank, 268 N.J. Super. 488, 503 (Law Div. 1993). 

Becker & Poliakoff represents the plaintiff condominium association in Grandview II and argued in opposition to the motion for summary judgment, among other things, that Palisades was not only factually distinguishable, but that it did not long standing New Jersey case law holding that such claims do not accrue, at the earliest, until transition of control by the developer. Fortunately for common interest communities throughout New Jersey the Court agreed that "no claim could be brought by the association until the transition occurred. That is until at least seventy-five percent of the units were sold to require the transition from owner to association control." 

As recognized by the Court, the statute of limitations is a rule of equity and as such equitable considerations must control the Court. There is an inherent conflict of interest in the argument put forth by the architect in Grandview II that a cause of action for construction defects by a condominium association accrues when anyone in the chain of ownership, including the developer, first knows or reasonably should know of a defect, even if transition to unit owner control had not yet occurred. While such may be equitable in the unique circumstances presented by Palisades, where the building was constructed as an apartment complex and subsequently transitioned to a condominium, it is not realistic to suggest that a developer would initiate an action against itself, or its contractors and design professionals, prior to transitioning control to the unit owners in the normal condominium context. 

While we believe the decision by the Hudson County Superior Court is correct and well-reasoned, it certainly will not bring an end to design professionals and subcontractors attempting to dismiss a condominium association's construction defect claims as being barred by the applicable statute of limitations based on the decision in Palisades and the developer alleged knowledge of defects. The Palisades decision, while innately fact driven, is nonetheless a decision by the Supreme Court. Thus, defendants may still attempt to argue that Palisades is not distinguishable and as a decision of the Supreme Court is the applicable controlling law. While we believe that argument to be incorrect for the very reasons argued to and set forth by the Court in Grandview II, if your association is currently experiencing problems due to potential construction or design defects it is suggested that you seek the advice of counsel immediately to best protect your interests.

---

[1]The full opinion in Palisadescan be downloaded at: http://njlaw.rutgers.edu/collections/courts/supreme/a-101-15.opn.html. 

Q&A: Charging for Copies of Financial Documents

December 19, 2017, 6:43 am

≫ Next: Q&A: Board Member Confidentiality Agreements

≪ Previous: Hudson County Court Distinguishes Controversial Palisades Decision

$

0

0

BY: MARTIN C. CABALAR

Question:       

Is there a limit how much we can charge to pull, provide and copy requested paperwork? Can we make a profit?

Answer:

Yes, there is a limit to the amount a condominium association can charge its residents to provide copies of records the association is required to keep open to inspection by its owners. In New Jersey, the charge cannot exceed an amount reasonably related to the association’s copying cost, which may include any additional administrative expense incurred. Therefore, unless your governing documents provide otherwise, the association may charge the cost for copying.

It is important to keep in mind that the New Jersey Condominium Act provides that associations shall be responsible for “the maintenance of accounting records in accordance with generally accepted accounting principles open to inspection by unit owners at reasonable times.” N.J.S.A. 46:8B-14(g) (emphasis added). The accounting records required to be open to inspection by unit owners include (1) a record of all receipts and expenditures and (2) an account for each unit setting forth any shares of common expenses or other charges due, the due dates thereof, the present balance due and any interest in common surplus. Thus, while the association may charge a fee reasonably related to the association’s copying cost to provide copies, the association must grant access to inspect the financial records required to be kept open to inspection without charge to the unit owners. Even if another party, such as the Association’s managing agent or accountant, charges the association a production fee, the association cannot charge the owner a fee to merely inspect these records.

Finally, while the Condominium Act is silent as to whether owners have a right to make copies, and New Jersey case law has not resolved this precise issue, the New Jersey Department of Community Affairs takes the position that the right of inspection includes the right to copies of those documents. Thus, we recommend that you allow members to make copies of financial records that are required to be open to inspection.

Q&A: Board Member Confidentiality Agreements

January 9, 2018, 6:54 am

≫ Next: Q&A: Handling a Homeowner Request to Review Counsel’s Invoices

≪ Previous: Q&A: Charging for Copies of Financial Documents

$

0

0

By: Martin C. Cabalar

Q:     Can board members adopt a policy requiring all members of the Board to execute a confidentiality agreement?  

A:       While there is no New Jersey case law directly on point, the likely answer is that with respect to material that is confidential, the governing board of a common interest community may adopt a policy requiring that the right of a director or trustee to access confidential material will be conditioned upon the board member's execution of a confidentiality agreement.

The New Jersey Condominium Act and New Jersey Planned Real Estate Development Full Disclosure Act (PREDFDA), despite having vigorous open meeting requirements, recognize that certain discussions should be held in confidence. Specifically, the governing board, in the exercise of its powers and duties, may exclude or restrict attendance at those meetings, or those portion(s) of meetings, dealing with: (1) any matter, the disclosure of which, would constitute an unwarranted invasion of individual privacy; (2) any pending or anticipated litigation or contract negotiations; (3) any matters falling within the attorney-client privilege, to the extent that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer; or (4) any matter involving the employment, promotion, discipline or dismissal of a specific officer or employee of the association. SeeN.J.SA. 46:8B-13 and N.J.S.A45:22A-46(a). It is very likely that the reason for such provisions in the Condominium Act and PREDFDA are in recognition of the fact that to act within the best interest of the association (i.e. maintain a duty of loyalty) requires members of the governing board to exclude and restrict attendance at certain meetings in order to maintain the required fiduciary level of confidentiality. Thus, a governing board would be justified in denying a board member access to such confidential information or materials where that board member refused to sign a confidentiality agreement with respect thereto.

In fact, the Appellate Division in one New Jersey case did not appear to take issue with the association requiring its members to sign confidentiality agreements in order to obtain a list of all members of the association.  Instead, the court held that a one thousand dollar liquidated damages clause in the confidentiality agreement was unreasonable and invalid, but did not otherwise appear to take issue with the confidentiality agreement or the board’s requirement that members sign same. SeeComm. for a Better Twin Rivers v. Twin Rivers Homeowners' Ass'n, 383 N.J. Super.22, 60 (App. Div. 2006) rev'd on other grounds, 192 N.J. 344 (2007). Likewise, in a corporations cases from Delaware, the court there has held that the access to materials as a director may be conditioned on the execution of a confidentiality agreement. Seee.g.Hollinger Int'l, Inc. v. Black, 844 A.2d 1022, 1092 (Del. Ch. 2004); Stroud v. Grace, 606 A.2d 75, 89-90 (Del. 1992).

In light of the aforementioned legal precedent, where a member refuses to sign a reasonable confidentiality agreement but continues to demand access to confidential information, the board of a common interest community would likely be justified in seeking a judgment declaring that the member’s access to materials be conditioned on his or her execution of a confidentiality agreement.  In addition, while the board likely cannot remove the member from the board, as most governing documents require a vote of the unit owners, the board may also be justified in calling upon the unit owners for a vote to remove the obstinate board member.

Q&A: Handling a Homeowner Request to Review Counsel’s Invoices

February 20, 2018, 5:42 pm

≫ Next: Becker’s Brand Evolution - A Message to Clients & Friends

≪ Previous: Q&A: Board Member Confidentiality Agreements

$

0

0

BY: MARTIN C. CABALAR

Q:        A resident is demanding copies of attorney invoices, but aren’t these subject to the attorney-client privilege? 

A:        The simple answer is: it depends. While “it depends” is not the most satisfyingly complete answer, owners generally have a right to see our invoices. However, when an invoice pertains to or contains attorney-client privileged information, your counsel should review them and redact any part of the privileged narrative.  Examples of attorney-client privileged information that would have to be redacted include entries related to individual privacy, pending or anticipated litigation, contract negotiations, the employment, promotion, discipline or dismissal of a specific officer or employee of the association, or any other matters falling within the attorney-client privilege, to the extent that confidentiality is require in order for the attorney to exercise his ethical duties as a lawyer.

Generally, we would advise our community associations to inform an owner requesting access to the association’s counsel’s invoices that if they wish to review the content of legal invoices, rather than just the amounts billed, they must first be reviewed by counsel, so that any entries which are protected by the attorney-client privilege can be redacted. While that work is not a significant undertaking, the association should not make the determination as to what is or what is not subject to the attorney client privilege or attempt to undertake the redaction on their own without the advice of counsel. An entry as innocent as “discussed contract negotiations with the Board and landscaping contractor” may be an attorney-client protected communication.

The cost to review and redact the invoices should be charged to the requesting unit owner and not as a common expense to all unit owners. While owners may argue that you are attempting to prevent them from seeing the invoices, this is not the case at all. Owners are permitted to see the amount of each invoice, but they are not permitted to review narrative entries which contain attorney-client privileged communications.

Finally, while an owner may argue that they “pay our bill” or that they are our client and therefore have the right to see the narrative entries on our invoices, the individual unit owners are not our clients. Yes, the unit owners pay the common expenses fees, which fund the association’s legal expense, but our client is the corporate entity which acts through its governing board.  

If your governing board receives a request to review the association’s attorney’s invoices, we recommend that you first consult with and seek the advice of your counsel before providing copies to a unit owner.

---

Becker’s Brand Evolution - A Message to Clients & Friends

March 6, 2018, 9:44 am

≫ Next: Q&A: Amendments to the New Jersey Public Recreational Bathing Code and the Effects on Your Community Association

≪ Previous: Q&A: Handling a Homeowner Request to Review Counsel’s Invoices

$

0

0

 BY: MARTIN C. CABALAR

We’re Becker & Better Than Ever...

...and we have a powerful story to tell. One that captures our pioneering spirit, our passion, and our unwavering commitment to our clients and the industries and communities we serve.

We are your champion - an advocate, cheerleader and partner - breaking new ground and pushing the edge on what’s possible. 

To more fully convey this message, we are thrilled to announce the creation of our new brand. We invite you to visits our new website and share your thoughts.

EXPLORE OUR SITE

And most importantly, we thank you for your support over the years.

We remain fearlessly yours,

Your friends and colleagues at Becker

Q&A: Amendments to the New Jersey Public Recreational Bathing Code and the Effects on Your Community Association

March 26, 2018, 10:01 am

≫ Next: UPDATE: Recent Clarifications from the New Jersey Department of Health on the Amendments to the Public Recreational Bathing Code

≪ Previous: Becker’s Brand Evolution - A Message to Clients & Friends

$

0

0

BY: MARTIN C. CABALAR

Q:       Our association is considering eliminating the lifeguard at our pool. Do we need to do anything other than post “swim at your own risk” signs?

A:       Many communities throughout the State of New Jersey are giving serious consideration to eliminating the lifeguard at their pool in light of the amendments to the Public Recreational Bathing Code, N.J.A.C.8:26-1 (the “Code”), particularly those portions addressing the duties of lifeguards as they may result in increased costs.

As you may be aware, the amended regulations require communities with pools larger than 2,000 square feet of surface area to have at least two lifeguards on duty. In addition to other changes, which are discussed in more detail below, lifeguards are not permitted to perform any activities that would distract them or intrude upon their attention from proper observation of, or prevent immediate assistance to, persons in the water. This means that lifeguards should not be texting or looking at their cellphones, checking pool passes or performing any services with respect to testing or cleaning of the pool while on duty. While this has always been the case, the language of the amendment suggest that local municipalities may enforce these requirements more strictly. While a qualified community interest community may exempt itself from these requirements, the exemption must be a complete exemption or none at all. Meaning, if you decide to have a lifeguard, then you must comply with all requirements of the Code.

We do not recommend that you eliminate the lifeguard at your pool, despite any increased cost that may result to your community. The safety benefits of having a lifeguard are obvious, but there are other financial and liability considerations as well. The elimination of your lifeguard will certainly increase your insurance premium and may expose your community to greater risk. For example, if you currently have a vendor providing lifeguard services, you will lose the benefit of insurance coverage and other protections afforded by this vendor. In the event that a lawsuit was filed in connection with an incident at or near the pool, your vendor and its insurance carrier would likely be required to defend and indemnify your community. Whereas, if you eliminate the lifeguard provided by the vendor, the association or its insurance carrier must absorb these costs.

If you are a qualified common interest community and decide to eliminate the lifeguard at your pool, the Public Recreational Bathing Code requires that you post a sign at least three feet by four feet in size, prominently displayed at every entrance to each swimming area, stating: (a) “No lifeguard on duty,” (b) “Persons under the age of 16 must be accompanied by an adult,” and (c) “No swimming alone.” This sign must include the hours the pool is open and all information on the sign must be easily readable with contrasting colors. At mobile home parks or retirement communities, the sign must also state: “This pool is closed when the owner or operator is not on the premises.” There are also additional signage requirements for a “Health Club” registered with the Director of the Division of Consumer Affairs pursuant to N.J.S.A. 56:8-39.

Given the insurance and legal implications, we highly recommend that your consult with your attorney and insurance agent prior to making any decision to eliminate your lifeguard. 

Here are some other important amendments to the Code that will affect everything from preseason pool opening procedures to pool inspections and maintenance:

• Twenty-one (21) days before the pool is set to open, the owner/operator must submit the Checklist for Public Recreational Bathing Facilities to the local health authority for approval to open. An initial water sample must be obtained prior to opening the pool and sampling must be done at least once every week thereafter;

• 5-year bonding and grounding certificates must be provided annually before the pool opens; 

• A full spine board must be kept poolside;

• Pools must have at least one throw line which reaches the other side of the pool;

• All life-guarded pools must have an automated external defibrillator (AED); 

• All pools with a depth great than five (5) feet, a diving area, or greater than 2,000 square feet in surface area must have elevated lifeguard platforms located at the water's edge; 

• Emergency telephone numbers of the nearest rescue squad, police department, and other appropriate entities, along with the address of the pool, shall be posted in a weather-resistant display adjacent to the lifeguard station;

• While a written standard operating procedure aquatics facility plan is not a new requirement, there is some new information that must be included in the plan, including: the location of the emergency shut off switch for the suction outlets, the hours of operation of the pool, the schedule of operational activities (such as water testing), the zone of protection plan for lifeguards and a safety policy on water toys and floats. 

• Dressing rooms and bathrooms shall be provided. 

• For facilities constructed prior to November 4, 1986, dressing rooms shall not be required and bathrooms may be portable. 

• For facilities constructed prior to September 7, 2010, dressing rooms and bathrooms shall be provided within 50 feet and at least one bathroom shall be provided and it may be portable.

• For existing condominiums where all residences are within 100 feet of the swimming pool, a separate dressing room and bathroom near the pool are not required. 

• The circulation system must meet the following requirements:

• The pumps, piping, return inlets/suction outlets, filters, etc. shall be maintained to ensure the complete circulation of water throughout all parts of the swimming pool.

• The circulation system shall be operated so as to turn over the entire swimming pool water capacity at least once every six hours; and the wading pool water capacity at least once every hour. Pumps shall be operated 24 hours a day and seven days a week.  

• The facility owner may install an energy efficient two-speed pump to save energy when the pool is closed at night. If such a pump is installed, the turnover rates do not have to be met during the night when the pool is closed.

• Swimming pool water clarity shall be maintained so that the deepest portion of the pool is clearly visible from the pool’s edge.

• The pump and component parts of the circulation system, shall be operated in a safe manner that is not hazardous to the operator and maintenance personnel.

•  Mechanical seals shall be corrosion resistant and shall be maintained in good repair.

•  Direction of water flow and pump rotation shall be clearly indicated on the pumps & all visible piping.

• Strainers shall be provided on all filter systems, shall be removable, and shall be located upstream of the circulation pump(s) to remove solids, debris, hair, and lint. Water entering the pump shall first pass through the removable strainer.

• Filters shall be cleaned and maintained pursuant to the manufacturer’s instructions, so that the circulation system can provide the required water clarity.

These are only some of the changes to the Code. Thus, we highly recommend that you first consult with and seek the advice of your counsel and pool management vendor before the upcoming pool season to ensure that your community is in compliance. The New Jersey Department of Health - Public Health & Food Protection Program, has prepared a FAQ worksheet with respect to the Code amendments, which may also provide some guidance and assistance. 

UPDATE: Recent Clarifications from the New Jersey Department of Health on the Amendments to the Public Recreational Bathing Code

April 18, 2018, 7:48 am

≫ Next: Q&A: Barking Dog - Please Help!

≪ Previous: Q&A: Amendments to the New Jersey Public Recreational Bathing Code and the Effects on Your Community Association

$

0

0

BY: MARTIN C. CABALAR

In our most recent blog post, we responded to a reader considering eliminating the lifeguard at their pool. This is something that many communities have considered doing this pool season as a result of the amendments to the Public Recreational Bathing Code, N.J.A.C. 8:26-1 (the “Code”), particularly the requirement that facilities with pools larger than 2,000 square feet of surface area have at least two lifeguards on duty. Recently, the New Jersey Department of Health issued a Frequently Asked Questions (“FAQ”) clarifying that a “private nonprofit common interest community” is a “specially exempt facility” and thus exempt from the lifeguard requirements of the Code. Accordingly, so long as your community is a specially exempt facility and complies with all other requirements of the Code, there is no requirement that you have at least two lifeguards on duty if your pool has a surface area greater than 2,000 square feet. One lifeguard will continue to suffice, provided you have appropriate signage. 

If you nonetheless decide to eliminate the lifeguard at your pool, the Public Recreational Bathing Code requires that you post a sign at least three feet by four feet in size, prominently displayed at every entrance to each swimming area, stating: (a) “No lifeguard on duty,” (b) “Persons under the age of 16 must be accompanied by an adult,” and (c) “No swimming alone.” This sign must include the hours the pool is open and all information on the sign must be easily readable with contrasting colors. At mobile home parks or retirement communities, the sign must also state: “This pool is closed when the owner or operator is not on the premises.” There are also additional signage requirements for a “Health Club” registered with the Director of the Division of Consumer Affairs pursuant to N.J.S.A. 56:8-39.

Given the insurance and other legal implications, we highly recommend that you consult with your attorney and insurance agent prior to opening your pool this season, especially if you are considering making any decision to eliminate your lifeguard. 

Q&A: Barking Dog - Please Help!

May 5, 2018, 11:59 am

≫ Next: Let No Man Put Us Under

≪ Previous: UPDATE: Recent Clarifications from the New Jersey Department of Health on the Amendments to the Public Recreational Bathing Code

$

0

0

BY: MARTIN C. CABALAR

Q: Our community has a resident who leaves their unattended, large service dog on the balcony. The dog barks once or twice every time it sees anyone walk by. This goes on all day and evening. The tenant is a renter and efforts to have them keep the dog inside have failed. Please help! 

A: I assume from the question, which indicates that resident is complaining about a large "service dog," that perhaps the community does not allow pets. As the reader may be aware, decisions of federal and state courts interpreting the Federal Fair Housing Law and New Jersey’s Law Against Discrimination have held that in certain instances housing providers, such as a common interest community, must accommodate those with a legitimate physical or emotional disability requiring the support or assistance of an animal. Nonetheless, even where an accommodation is required by law, the resident is still required to maintain the animal in accordance with existing rules and regulations - which often include, among other requirements, that residents permit no activity that creates a nuisance or annoyance to other residents. Such rules require the resident to take all actions necessary to prevent the animal from making noise that may unreasonably annoy or disturb the peace of neighboring residents.

Regardless of whether or not the animal is a "service dog," if the barking exceeds the average noise level a reasonable person would expect while living in a condominium, then the resident may be in violation of restrictions in the governing documents prohibiting any acts which may be or become an annoyance or nuisance to other residents in the community. If this is the case, the Association may determine to (a) issue a letter advising the owner to keep the barking of the dog at a reasonable level so as not to cause a nuisance to other residents (b) fine the  unit owner if permitted by the governing documents and/or (c) refer the complaining unit owner and owner of the dog to mediation.

The issue of a “nuisance” is very fact sensitive. Thus, we recommend that you consult with your legal counsel prior to issuing a fine or taking any other action against a unit owner who fails to keep the barking of their dog to a reasonable level. 

Let No Man Put Us Under

May 11, 2018, 7:18 am

≫ Next: FDCPA & Debts That Can Cause Despair

≪ Previous: Q&A: Barking Dog - Please Help!

$

0

0

The New Jersey Appellate Division Upholds the Sanctity of Property Held as Tenants by the Entirety 

BY: ANGELA M. MORISCO

In a decision dated, May 8, 2018, approved for publication, the New Jersey Appellate Division held that N.J.S.A. 46:3-17.4, precludes an unsecured creditor from forcing the partition of real property owned by a debtor and a non-debtor spouse as tenants by the entirety not used a martial residence.   Raul Augustin Jimenez, et als. v. Raul Anibal Jimenez, (Superior Court, Middlesex County Docket No. L-0025-12 App. Div. May 8, 2018)

The statute cited provides, in substance, that neither spouse may “sever, alienate, or otherwise affect their interest in the tenancy by the entirety during the marriage or upon separation without the written consent of both spouses”.

The holding is important because it provides that the statute “supersedes and nullifies” existing case law that allowed such a creditor’s remedy in certain equitable circumstances.     The decision protects and preserves the interest of husband and wife in property held by the entirety over the interest of a creditor of a single spouse.

The Court did note that an exception may exist in certain circumstances.  As with any other legal matter, executing judgment creditors should consult with qualified, experienced counsel to develop and implement an effective post-judgment execution plan that is consistent with current law. 

FDCPA & Debts That Can Cause Despair

May 14, 2018, 1:01 pm

≫ Next: What’s In Your Policy...Is Your Coop or Condo Ready for NYC Smoking Rules?

≪ Previous: Let No Man Put Us Under

$

0

0

Condominium & HOA Collections & Compliance

BY:  ANGELA M. MORISCO, ESQ.

The Federal Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C.A. § 1692, et seq. applies to attorneys engaged in the collection of debt for community associations.  The language contained in demand letters is a frequent source of FDCPA litigation. Liability is often imposed based on certain words contained in or omitted from the letter.

Damages recoverable under theFDCPA include actual damages, statutory damages, court costs, reasonable attorney’s fees and can result in class action liability. 

Unlike credit card and other consumer retail debt which is generally charged off and then sent for collection, liability for homeowner association fees continues to accrue for so long as the owner has legal title to the property at issue. Hence, the collection process is ongoing. 

Courts have held that a debt collector violates the FDCPA by stating the “current balance” of a consumer’s debt if the collector fails to disclose the balance is subject to increase due to the accrual of interest or other fees. This issue has been addressed by several very recent Court of Appeals cases.

           

To avoid potential FDCPA pitfalls, attorneys engaged in community association collections are cautioned to ensure that the language contained in demand letters comports with existing, controlling caselaw.

Do your demand letters comply with the requirements of the FDCPA?

What’s In Your Policy...Is Your Coop or Condo Ready for NYC Smoking Rules?

May 21, 2018, 7:20 am

≫ Next: Vincenzo Mogavero Receives M.B.A. from Cornell University

≪ Previous: FDCPA & Debts That Can Cause Despair

$

0

0

BY:  ANGELA M. MORISCO, ESQ,

Last August, New York City enacted Local Law 147 which requires owners of class A multiple dwellings to adopt and disclose a smoking policy.  Although touted as a disclosure policy, there are several requirements that owners need to be aware of since the law takes effect this August.   Under the law, the definition of owner includes the “owner of record” of rental apartment buildings, the board of directors of a cooperative and the board of managers of a condominium.  Although the law does not dictate the contents of the policy, it requires the policy to address all indoor locations, common areas and all outdoor areas including courtyards, rooftops, balconies and patios where smoking is permitted or proscribed. Similar rules are in effect in public housing nationwide.

Once the policy is adopted, owners are required to provide all residents with a copy of the policy or to post it in a prominent location.  In cooperatives and condominiums, the policy must be incorporated into the by-laws. Failure to adopt and failure to disclose the policy, or to advise of material changes to the policy, will result in violations and the imposition of civil penalties.

How far should your policy extend, i.e. should smoking be banned in individual units?

What are the implications of such a ban?    How far could or should owners and boards go when implementing a smoking policy?

---

Vincenzo Mogavero Receives M.B.A. from Cornell University

May 29, 2018, 12:32 pm

≫ Next: Fear Not the Dreaded Legal Fees: Part Two

≪ Previous: What’s In Your Policy...Is Your Coop or Condo Ready for NYC Smoking Rules?

$

0

0

Vincenzo Mogavero, chair of our New Jersey and New York litigation groups, has just received his M.B.A. from Cornell University.

Vincenzo joined the New York office as a litigator in August 2011, and has continually impressed all of us with his intelligence, work ethic and leadership abilities. He quickly emerged as the leader of the NY/NJ litigation group and, in 2015, added administration of the New Jersey Construction litigation practice to his responsibilities.

Fear Not the Dreaded Legal Fees: Part Two

June 7, 2018, 9:17 am

≫ Next: Is Your Neighbor Really A Nuisance?

≪ Previous: Vincenzo Mogavero Receives M.B.A. from Cornell University

$

0

0

BY:  ANGELA M. MORISCO, ESQ.

Very often boards of condominiums and other community associations hesitate to engage in litigation against unit owners who fail to pay common expense assessments due to fear of  the legal expense. In addressing this concern, I often advise boards that likely if you do nothing, you will receive nothing.

In New Jersey legal fees are recoverable  against non-paying owners. Although many actions against delinquent owners  proceed as uncontested, some owners do appear and attempt to defeat the association’s claim to the money due and owing. Some matters may actually proceed to trial. This of course increases the expense to the association.

Well established case law in New Jersey provides that the amount due to an association should not be reduced by the legal expense incurred to recoup the fees. The Appellate Division reaffirmed this principal in a case decided this week. Significantly, the court determined  that although the fee must be reasonable and must comport with the factors set forth in the Rules of Professional Conduct, the fact that the attorney fee award requested may be substantially disproportionate to the amount the association claims to be due for monthly common expense assessments, is not determinative of whether the fee is reasonable and should be awarded.

Since unpaid common expense assessments will continue to accrue for so long as a non-paying unit owner has title, it is critical for the association to have a cost effective legal strategy in place to recover the fees.  

Is Your Neighbor Really A Nuisance?

September 26, 2018, 9:31 am

≪ Previous: Fear Not the Dreaded Legal Fees: Part Two

$

0

0

BY: MARTIN C. CABALAR

We often see complaints from community associations regarding smoking, cooking smells or noise emanating from one unit to another. This leads to the question: what, if anything, can the association do? While many communities have restrictions in the governing documents prohibiting acts which may be or become an "annoyance" or "nuisance" to other residents in the community, the issue of whether or not something is actually a nuisance is very fact sensitive. Generally, if the transmission of smoke, smell or noise exceeds the average level a reasonable person would expect while living in a condominium (or other community association), then the resident creating the condition may be in violation of the nuisance restriction. So, the real question to ask: is the smoke, smell or noise is exceeding the average level a reasonable person would expect? 

This is no easy task. The association must balance the ability of one owner to use their home, with the impact that such may have on other owners and whether such use is truly unreasonable. For example, in some instances, noise, smoking or odors may rise to the level of a nuisance because such can easily travel from one unit to the next, whether through thin walls or floors in the case of noise or under the door or through shared ventilation ducts or other openings in the case of smoke and odors. Of course, whether a particular instance would be a nuisance to other residents assumes that the impacted resident is a person with normal sensitivity to noise, smoke or odors and such does not exceed the average level that would be expected under the particular living conditions. Moreover, while we may wish that buildings were constructed in such a manner that unit-to-unit noise and odors were barely perceptible, even strict adherence to modern building codes does not assure that. Therefore, the association should consider several factors in order to objectively determine if the noise, smoke or odor is unreasonable, including but not necessarily limited to: (a) time of day, (b) continuity of the noise, smoke or odor, (c) the loudness of the noise, the amount of smoke or strength of the odor, and (d) whether the complaining owner suffers from a handicap (as that term is defined by the Federal Fair Housing Act) from which the effects of the noise, smoke or odors substantially limits the owners ability to use and enjoy a dwelling for which the association may be required to provide a reasonable accommodation.[1]

Where the association feels it can objectively determine that the noise, smoke or odor exceeds the level a reasonable person would expect while living in a condominium, then the association may alert the owner to the nuisance violation of the governing documents and recommend that all actions necessary to minimize the transmission of noise, smoke or odor from the unit into adjoining unit be taken. Those actions might include but are not limited to:

A.    Installing carpeting or padding to reduce noise;

B.     Limiting the smoking to a room or place in the unit that is least likely to cause the transmission of smoke or odor into other units and/or common areas;

C.     Sealing all opening in walls or ceilings that adjoin other units. These openings might include areas around outlets, switches, ceiling light fixtures and vents;

D.    Improving ventilation from whichever room the cooking/smoking may be occurring in to the outside. Of course, if any venting were to include venting to the exterior, the owner must contact the association with plans so it can review them to ensure that the installation will not negatively impact the common elements. While the association should be prepared to assist the owner in developing a plan to vent the smoke and odor to the outside, the owner would be responsible for these costs; and,

E.     If the smoke is from medical marijuana, the owner should consult with their doctors to determine whether an ingestible form of marijuana can be used to achieve the same results.

In addition to any suggestions the Association may make, the association would also have an obligation to offer the parties involved alternative dispute resolution.[2]

If the association’s suggestions to resolve the issue are unsuccessful, the association, if authorized by its governing documents, may elect to issue fines or take other legal action against the unit owner.[3]These actions should only be taken if the association feels that it can objectively determine that the noise, smoke or odor exceeds the level a reasonable person would expect while living in a condominium. Accordingly, we strongly recommend that you consult with your attorney before taking any action to enforce nuisance restrictions in your governing documents. 

---

[1]The Federal Fair Housing Act (42 U.S.C. §§3601-3619) and the regulations promulgated thereunder require “housing providers,” including entities such as condominium associations in New Jersey, to make “reasonable accommodations” to disabled persons in rules, policies, practices or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling. New Jersey’s Law Against Discrimination (N.J.S.A. 10:5-1 et seq.) similarly requires accommodation of the disabled. For example, if secondhand smoke worsens a resident’s medical condition, the association may be required to make a reasonable accommodation to reduce the amount of secondhand smoke.

[2]SeeN.J.S.A. 46:8B-14(k) (“As association shall provide a fair and efficient procedure for the resolution of housing-related disputes between individual unit owners and the association, and between unit owners, which shall be readily available as an alternative to litigation.”).

[3] Prior to the imposition of a fine, the association must provide written notice and offer alternative dispute resolution. N.J.S.A. 46:8B-15(f) (“A fine shall not be imposed unless the unit owner is given written notice of the action take and alleged basis for the action, and is advise of the right to participate in a dispute resolution procedure…”).