Community Associations
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In late January, a group of condominium associations and owners filed suit against the Village of Piedmont, charging that Piedmont had violated their civil rights and failed to provide equal protection under the law as a result of unfair taxes and assessments. The owners allege that Piedmont has taxed them for services they have not received – such as trash collection and snow removal – and that they are required to pay for such services as part of their monthly common condominium charges. So what are these owners and associations seeking in damages? $85 million...
In most states, municipalities provide certain municipal services – such as snow removal, trash collection, recycling and street lighting – to residents of traditional single family homes, but do not offer these same services to residents of condominiums or other common interest communities. Yet, owners in these communities pay the same property taxes as single family homeowners in addition to their respective common expense assessments, essentially requiring that owners in community associations pay twice to receive basic municipal services, such as a weekly trash pick-up or the plowing of their streets following a snow storm.
Unlike New York, New Jersey addressed this issue of double taxation by enacting the Municipal Services Act, N.J.S.A. 40:67-23.2 to -23.8, which was the first legislation in the country to address municipal services equalization for common interest communities. Pursuant to this Act, every municipality in New Jersey is required to either provide certain services to each qualified private community within its borders or reimburse the association for these services, including snow removal, trash collection and recycling. The purpose of the Act is to require “that a municipality enact ordinances to provide the same services along the roads and streets of a qualified private community as it provides to other residents along its public roads and streets” and to eliminate “double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.”
While not unique, New Jersey is one of only a few states that provide for such benefits to its residents. New York has not yet followed suit, but the Piedmont lawsuit may begin to change people’s opinions about how condominium associations are taxed and receive municipal services. Only time will tell how New York will address the issue of municipal services equalization and the problem double taxation of common interest communities. It is possible that the elected representatives in these states will enact legislation similar to that of New Jersey’s Municipal Services Act, which provides at least some relief to community association members. Until then, owners in these communities continue to pay the same property taxes as single family homeowners on top of their respective common expense assessments, essentially paying double for their municipal services.
If you would like to discuss this issue or how it affects your association in greater detail, please contact Jonathan H. Katz at (609) 219-7448 or via e-mail at jkatz@stark-stark.com.
Written by Jonathan H. Katz on February 12th, 2008 with comments disabled.
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It seems impossible to watch the news or read the paper these days without hearing about the troubled real estate market, as well as the troubles Americans are having with their mortgages. According to the California-based real estate tracking company, RealtyTrac, roughly 2.2 million homes received foreclosure-related warning notices in 2007. In 2006, 1.3 million homes received those warning notices. Because of missed payments noted at the end of 2007, it is expected that the number of homes to receive foreclosure-related warning notices in 2008 will be even larger.
Evidence shows that the states hardest hit by foreclosures are Nevada, Florida, Michigan and California. In 2007, New Jersey saw 53,652 foreclosure filings, up 34% from 2006. New Jersey's foreclosure rate for 2007 was 0.9% (or, less than one property in foreclosure for every 100 properties in New Jersey). In contrast, the foreclosure rate in 2007 for Nevada was 3.4% and for Florida it was approximately 2%. Historically, and fairly obviously, the number of defaults in association and cooperative fees increase as well during times of increased mortgage defaults.
In turn, it is even more imperative that associations and cooperatives act aggressively to ensure payments, early in any deficiency. For associations, it is essential that liens be recorded early to ensure protection in the event of an owner's bankruptcy and to secure a better position in the face of any mortgage foreclosure.
Written by David J. Byrne on February 6th, 2008 with comments disabled.
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There are basic laws that governs condominiums (“condos”) and cooperatives (“co-ops”) in New York. Condos are governed by the New York Condominium Act, Article 9-B, Real Property Law (the “Condominium Act”). Co-ops are governed by the Business Corporation Law. There are always new issues that arise requiring new laws that impact residents of New York condos and co-ops.
One bill in New York that has many residents, board members and managers concerned is the “Fair and Prompt Disclosure Act”, also known as Intro 119. This bill would require co-ops to provide specific reasons for the rejection of any potential purchaser. This bill is at the City Council level and is the same as the bill in Albany under consideration, AO1000. Bill AO1000 requires co-ops to provide a prospective purchaser with a written statement of reasons when withholding consent to purchase and voids any agreement inconsistent with such requirement. Those who support these bills contend that there is a problem spreading throughout NY relating to discrimination. Those who oppose the bill rely upon the current laws already in place that prohibit discrimination. For more information pertaining to this bill, please view the blog posted by Jonathan H. Katz, Esquire of Stark & Stark entitled “Shining a Light on the Co-Op Approval Process” posted on July 10, 2007 here.
Another bill, Bill A3677, has been referred to the judiciary to amend the real property law, in relation to requiring hearings before placing liens on condominium units. This bill would require boards of managers of condominiums to provide a unit owner with an opportunity to be heard prior to placing a lien on such person`s condominium unit. Currently, condominium owners who withhold payment on common charges because the board of managers has failed to repair problems, which fall under the board`s responsibility, face having liens placed on their property. A condo owner with a lien on his or her condo is unable to sell his/her property and is in jeopardy of damaging his/her credit rating and ability to obtain loans. This bill seeks to protect New York State`s many condo owners from unreasonable financial hardship by requiring that boards of managers provide unit owners with an opportunity to be heard.
Another bill in Albany that relates to condos an co-ops in New York is A00475. The bill would require the licensing of building managers of multiple dwellings. It will also prohibit owners from operating without a licensed manager. Managers would be required to take building management courses with minimum a number of hours of classroom work conducted or approved by department of buildings. The bill provides criteria for determining competency to receive a license, how to apply for a license and the revocation and suspension of a license. It addresses judicial review of department of building’s decision to grant, refuse or renew and revoke a manager’s license.
While some legislation is enacted to protect owners and/or residents, Bill A6155 expands the authority of the board of managers. This bill will allows a board of directors or board of managers to take appropriate action against an objectionable tenant who fails to comply with the by-laws or rules and regulations of the condominium or homeowners association. Failing to comply to the by-laws or rules and regulations of a condominium or homeowners association in a proper case would be grounds to bring a summary dispossess proceeding against the tenant of a non-occupying unit owner, giving the board of directors or board of managers another avenue of appropriate action.
There are many local, state and federal bills in consideration. It is imperative for owners, managers and board members to closely monitor court decisions and legislation affecting co-ops and condos. We will continue to monitor pending legislation and provide timely updates as to the progress of same. If you would like to discuss any of the above referenced issues or how they affects your condo or co-op in greater detail, please contact Robyn Nolan Howlett, Esquire at rhowlett@stark-stark.com.
Written by Robyn Nolan Howlett on December 13th, 2007 with comments disabled.
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Every Who down in Who-ville liked Christmas a lot... but the Grinch, who lived just north of Who-ville, did NOT! The Grinch hated Christmas! The whole Christmas season! Oh, please don’t ask why, no one quite knows the reason. It could be, perhaps, that his shoes were too tight. Or maybe his head wasn’t screwed on just right. But I think that the best reason of all may have been that his heart was two sizes too small...
– Dr. Seuss – “How the Grinch Stole Christmas”
With apologies to Dr. Seuss, and with the holiday season fast approaching, many community association boards find themselves in the unenviable position of having to balance enforcing their rules and consider the safety of their residents while trying not to come off looking like Ebenezer Scrooge (before the visits from the ghosts of Christmas past, present and future, of course). While an association of single-family homes may be less concerned about restrictions than a high-rise condominium or townhouse association, here are some obvious – but often overlooked – rules to think about when it comes to regulating holiday decorations:
(1) Be Reasonable and Consistent – Unless your Governing Documents require it and there is a compelling reason to do so, do not prohibit residents from decorating the exteriors of their homes for the holidays. Associations should adopt uniform rules and communicate these rules to the residents so everyone is on the same page as to what they can and cannot display. Further, if your association does ban holiday decorations, it is essential to be consistent and ban all decorations and displays.
(2) Set Reasonable Restrictions – It is reasonable and appropriate to require residents to regulate the time that decorations may be displayed and, sometimes more importantly, when they should be removed. It is also reasonable to regulate the time of day that lights or other features may be illuminated so as not to create an unreasonable nuisance for neighbors or additional safety issues. Avoid, if at all possible, venturing into unchartered territory of restricting religious displays, which may open up a proverbial (no pun intended) can of worms.
(3) Do Not Argue Over Aesthetics – We all know that not everyone has exquisite taste in decorating, but if the board or architectural review committee are arguing over what is tasteful and what is not, it may be time to take a closer look at your rules regarding decorations and open a dialogue with the community about what changes they would like to see.
(4) Be Mindful of Decorations on Common Elements – While it is not advisable to prohibit homeowners from decorating their own homes, it is perfectly acceptable to ban residents from decorating general common elements without association approval or that could cause damage. It is also advisable to limit homeowners from affixing decorations to limited common elements if the association is responsible for their maintenance. And again, associations that do choose to decorate common areas, such as clubhouses, entrance ways or lobbies, should avoid religious displays and be mindful to either keep such decorations general – lights and wreaths, for example – or to take extra care to give equal treatment to all religious affiliations.
Overall, it is important to make your holiday decorating rules reasonable and even-handed. Concentrate on what is most important: location, time and place, size and safety, but not content or aesthetic appeal. And just remember, as long as they are not dangerous, the ten-foot tall inflatable Santa, Rudolph or Frosty the Snowman won’t hurt anyone (and won’t be on display forever).
If you would like to discuss this issue or how it affects your association in greater detail, please contact Jonathan H. Katz at (609) 219-7448 or via e-mail at jkatz@stark-stark.com.
Written by Jonathan H. Katz on December 10th, 2007 with comments disabled.
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David J. Byrne, Shareholder and member of Stark & Stark's Community Associations Group was quoted in the article, Rambo at the Reigns: When Board Members Abuse Their Power, in the October 2007 issue of the New Jersey Cooperator.
The article discusses the ways in which power can be abused in a homeowners association, and the warning sings one can use to determine if the power given to a board member is being abused. The article also addresses ways in which residents can fight back against an abusive board member.
You can read the full article here.
Written by Stark & Stark on November 30th, 2007 with comments disabled.
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Those in the market for a new home should consider the various differences between a condominium, cooperative, or homeowners association.
Written by New Jersey Law Blog on April 11th, 2007 with comments disabled.
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Condo-hotels have been around since the 1970s, mostly on the shores of Hawaii or the ski slopes of Colorado. However, in the past five years, condo-hotels have undergone a rebirth, emerging as hot spots in the resort market, mostly in Florida, Colorado and Hawaii, but also in large metropolitan areas such Miami, Chicago and Las Vegas.
Written by Jonathan H. Katz on April 5th, 2007 with comments disabled.
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New Jersey's appellate court held that a mortgagee in possession of a condominium unit is personally liable for condominium maintenance fees that accrue during the mortgagee in possession's possession and control of the unit.
Written by David J. Byrne on March 14th, 2007 with comments disabled.
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Christopher Florio and Melissa Volet co-authored "Condo Associations' Liens Take Precedence: Decision Favors Condo Associations' Liens Over Township's Claim" for the February 12 New Jersey Law Journal.
Written by New Jersey Law Blog on February 15th, 2007 with comments disabled.
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Christopher Florio and Melissa Volet co-authored "Condo Associations' Liens Take Precedence: Decision Favors Condo Associations' Liens Over Township's Claim" for the February 12 New Jersey Law Journal.
Written by Stark & Stark on February 15th, 2007 with comments disabled.
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