In a very important decision for Associations throughout New Jersey, on January 21, 2014, New Jersey’s Appellate Division ruled that defendants in an Association construction defect case lack standing to enforce provisions intended for unit owners’ benefit.
Porte Liberte II Condominium Association, Inc.’s governing documents required a membership vote to approve certain litigation. Without such membership approval, the Association instituted litigation alleging massive construction defects. Subsequently, the membership overwhelmingly voted to approve the litigation. Notwithstanding this, the trial court dismissed the Association’s case for failure to secure the required membership vote before instituting suit.
The Appellate Court reversed holding that defendants lacked standing to enforce governing document provisions intended to benefit the unit owners and that the subsequent affirmative membership vote ratified the Board’s conduct. In essence, the Appellate Court concluded that letting defendants “enforce the unit owners’ interests would be akin to letting the proverbial fox protect the interests of the chickens.”