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Woodlake at King’s Grant v. Coudriet and Mesy

Posted on Author By Francis J. McGovern, Jr., Esquire

fmcgovern@theassociationlawyers.com

Woodlake at King’s Grant Condominium Association, Inc. v. Coudriet and Mesy.  What it Means and What Associations Should Do Going Forward

It’s common knowledge that Burlington County Chancery Judge Karen L. Suter has not been receptive to Associations’ applications for appointment of rent receivers.  This has been true even when a unit is abandoned, vacant and worth less than the balance of the mortgage.  Nevertheless, we believe that Judge Suter and New Jersey’s other Chancery Judges will, in the proper circumstances, continue to grant Associations’ applications for appointment of rent receivers.

In Woodlake at King’s Grant v. Coudriet and Mesy (decided April 1, 2014), New Jersey’s Appellate Division reviewed two of Judge Suter’s decisions denying Woodlake’s motions for appointment of rent receivers where the units were abandoned, vacant and apparently worth less than the balance of the mortgage.  The Appellate Division upheld Judge Suter’s denials.

We did not participate in the Woodlake case.  However, we do not believe that Judge Suter has anything against associations nor do we believe that the Woodlake decision should inhibit Chancery Judges from granting Association’s future rent receiver applications.

In Woodlake the Appellate Court noted that “The Association has not demonstrated that defendants have an affirmative obligation to rent their respective units…”; “[the Association has not demonstrated]…any authority…to rent those units to new tenants”; “Nor have we been presented with any indication that defendants misappropriated rents”; “[The Association has not provided] any other agreement between the parties [that] provide[s] for the appointment of a rent receiver” and “…the Condominium Act does not expressly authorize such relief…”.  However, nothing in that laundry list is determinative of whether or not a rent receiver should be appointed on an Association’s application when a unit is vacant and abandoned.  At issue is the Court’s power, not the association’s power.  Chancery courts have the inherent power to prevent waste, mitigate fire risk, mitigate vandalism risk and prevent squatting.

The decision is left to the broad discretion of the Chancery Judge.  Arguably, the County Chancery Judge has the broadest powers of any judge in the judicial system (the late Judge Alexander Lehrer once said “Mr. McGovern, in this courtroom, I am king.”  He then offered to trace the history of the Chancery Court’s equitable powers back to the kings of England).  Chancery Judges have the power to grant equitable relief – a power broader and more flexible than Law Division Judges.

Chancery Judges ask themselves: “Does this seem right?”, “If I deny the requested relief, will the applicant be irreparably harmed?”, “If I grant the requested relief will another party or, worse yet, someone who has not had the opportunity to be heard, suffer greater harm than the applicant?”

Beyond the laundry list noted above, the Woodlake Appellate Court discussed rent receivers in the context of cases involving banks attempting to have rent receivers appointed against mortgagors.  Early in my legal career I represented banks and was involved in a number of hotly contested cases involving a bank’s right to rents.

The Woodlake Appellate Court did not plumb the distinctions between rent receiver applications in the bank-mortgagor context and rent receiver applications in the association-abandoned unit context.  In the bank-mortgagor context, typically the bank has lent money to the mortgagor to purchase the property (perhaps an apartment building, office building etc.).  If the mortgagor defaults, the bank attempts to collect the rents via a rent receiver so that its loan may be repaid.

Courts look at such relief as extraordinary for a number of reasons, for example: the right to collect rents and proceeds generally follows ownership and possession rather than lienholder status, appointing a rent receiver may put the mortgagor out of business if the mortgagor’s business is real estate investment and appointing a rent receiver may put the mortgagor out of an operating business if the mortgagor’s business is a (or the only) tenant in the financed real estate.  Courts also consider whether the lender is “adequately protected” by the value of the property.  Judges ask: Is there an “equity cushion” such that the value of the property exceeds the mortgage sufficiently to protect the bank’s loan amount plus amounts, such as taxes, insurance, security etc., that the bank may have to continue to advance.

The reasons judges are cautious in appointing rent receivers in the bank-mortgagor context do not however apply in the association-debtor context where the unit has been abandoned and is vacant.  In the association-debtor context, where the unit has been abandoned and is vacant, waste/fire/vandalism/squatters and possible impacts on third parties are the primary concerns – the debtor has already walked away from the unit.

Waste/fire/vandalism/squatter issues weigh heavily in favor of granting an association’s request for appointment of a rent receiver.  However the “possible impact on third parties” prong could still be problematic.  In Woodlake the mortgage company was apparently not a party to the suit or on notice of the rent receiver motion.  Further, it also seemed that the mortgage company may have been proceeding expeditiously with its foreclosure and was close to completing the foreclosure process.  Although speculation, these two facts alone appear sufficient to support Judge Suter’s denial of the rent receiver application and the Appellate Division’s affirmation of Judge Suter’s decision.

Judge Suter, having been New Jersey’s Chief of Banking and Insurance Operations from 1998 to 2000 and Commissioner of New Jersey’s Department of Banking and Insurance from 2000 to 2001 is aware of the fact that banks, via their security instruments, often take an interest in rents and proceeds.  Therefore, she may feel that, even though the association is a junior lien holder and cannot foreclose the bank’s interest, in the context of a rent receiver motion, the bank is entitled to be a party to the action or, at a minimum, is entitled to have notice of the rent receiver application. Further, Judge Suter may also feel that, in cases where bank foreclosure is imminent, the administrative detriment to the bank of putting a tenant in the unit outweighs the brief benefit to the association.

In any case, we feel that Woodlake did not contribute meaningfully to the body of case law addressing rent receiver applications.  Rather, it reaffirmed the power that Judge Suter and the other Chancery Judges already had and have exercised regularly throughout the recent economic slump.  Whether or not a rent receiver is appointed with respect to an abandoned and vacant association unit depends on the facts.

It appears that, going forward, the bank should be put on notice of any association rent receiver application and that an Association should think twice before applying for a rent receiver where a bank is diligently pursuing its foreclosure action and completion of the foreclosure is imminent.  Associations should still however look to rent receiver applications as a valuable collection tool and not forget that banks may also be liable as mortgagees in possession.

When is it too late to request ADR?

Posted on Author By The Association Lawyers

 

Alternative Dispute Resolution – commonly referred to as “ADR” – has been an especially hot topic for community associations since the New Jersey Appellate Division’s 2012 decision in Bell Tower Condominium Association, Inc. v. Haffert. In that case, the Court held that “housing-related disputes” under the Condominium Act include disputes over the validity of special assessments for repairs and improvements to the common elements. Many commentators subsequently suggested that this holding meant that all disputes between an association and a homeowner must be submitted to ADR. Not so. The Appellate Division recently provided additional guidance on ADR in a March 25, 2014 unpublished opinion, Townsquare Village Homeowners Association, Inc. v. Walton. In that case, this firm successfully argued that the right to ADR has been waived once a person has participated in a trial on the underlying issues.

In Townsquare Village, the association obtained a judgment for unpaid monthly assessments after participating in a one-day trial with the homeowners. After winning at trial, the association filed an application for an award of attorneys’ fees with the trial court. In opposition to the application for attorneys’ fees, the homeowners filed a motion demanding that the judgment for monthly assessments be vacated, and that the matter be submitted to ADR as required under the Condominium Act (and the Planned Real Estate Development Full Disclosure Act Regulations). When the homeowners’ motion was denied, they appealed the matter to the Appellate Division.

On behalf of the association, this firm argued that the homeowners waived whatever right they had to participate in ADR when they elected to participate in a trial. The Appellate Division agreed – even though a judgment for attorneys’ fees had not yet been awarded in the case – and held that the underlying merits of the case had already been decided by the trial court, which was also in the best position to make a ruling on attorneys’ fees. Therefore, the association was no longer required to participate in ADR regarding the matter.

The Townsquare Village case clearly demonstrates that the expansiveness of the ADR mandate for associations may be more limited than many commentators previously thought.

Interest vs Late Fees

Posted on Author By Francis J. McGovern, Jr., Esquire

“Interest” and “late fees” are different things.  Governing documents may provide for interest and/or late fees.  Judges are sensitive to the difference.  Judges will not allow interest if only late fees are authorized in the governing documents and judges will not allow late fees if only interest is authorized by the governing documents.

Judges essentially conclude that “late fees” only accrue on late payments while “interest” is charged on a continuing balance.  Many management companies are not set up to accrue interest; nevertheless, posting late fees (if not authorized by the governing documents) is improper.

Late fee postings are particularly troubling when late fees are compounded because of a single missed or late payment.  These “late fees” should really be interest on the continuing balance.

He’s Not The Man He Used To Be

Posted on Author By Francis J. McGovern, Jr., Esquire

What can you do when your neighbor has mental problems that may be a danger to himself or the community?

Many mental disorders witnessed by community members are those associated with old age. However, cases involving people with other types of mental disorders do arise. Many mental disorders do not become severe immediately and may be severe one day and not the next. If you observe odd behavior, you should document the behavior with its date and time. Any such documentation should be kept confidential. As a preemptive measure, unless the behavior is so odd as to dictate other action, you may ask your neighbor if there is any thing wrong and whether there is any one who may be contacted for assistance now or in the future (i.e. a family member, friend or doctor). If a contact person is determined while his disorder is only mild, this contact person may be of great assistance if the disorder progresses or an emergency arises.

With luck, in many cases, a family member or friend will be available to care for the your neighbor. Unless the circumstances are emergent, the family member or friend should be contacted, advised of the his condition and requested to address the problem. Intervention by a family member or friend will hopefully end your involvement.

If the problem is emergent however, (he leaves gas on without flame being lit, leaves iron

on unattended, starts fires by careless smoking, leaves running water such that it floods areas, inappropriately approaches, threatens or attacks other neighbors) emergency services personnel should be immediately summoned. Summoning the police, fire department or rescue squad will serve two functions, first these people should be able to remove the immediate danger. Second, the call generates a report that will be an important part of the record of your neighbor’s behavior should injunction, guardianship or commitment proceedings become necessary. You should speak to the responding officer and request that the report carefully detail the person’s behavior. You may also attempt to obtain a copy of the report.

Unless the emergency services personnel take your neighbor into custody, they are limited in what they can do to prevent future problems. Regardless, once the emergency is resolved, the resident’s family or friends should be contacted to address the problem. Unfortunately, in many cases, there are no known friends or family or they are spread across the country and unable or unwilling to address the problem. You are then left addressing your neighbor’s disorder and his future danger to himself and the community. This danger is greatly increased if you live in any type of high density housing (i.e. apartment building, condominium, town home etc.). If you live in high density housing and the community has a manager, superintendent or board of trustees, they should be notified, in writing, of the situation. They should assist you in addressing the problem if not completely address the problem themselves.

If there are no known friends or family or they are unable or unwilling to address the problem, the County Department of Social Services, Adult Protective Services should be contacted, informed of the incidents and provided with copies of any reports regarding your neighbor’s behavior. The Adult Protective Service works to prevent neglect, abuse and exploitation of vulnerable adults. Adult Protective Services will likely respond by sending a case worker out to visit your neighbor and evaluate his condition. Again, you may request that Adult Protective Services provide you with a copy of their written report. However, confidentially concerns will likely prevent them from providing you with one.

After the case worker evaluates you neighbor, recommendations will be made. To the extent they are able, the case worker will likely attempt to help him live safely on his own. However, in severe cases, guardianship and/or commitment proceedings may be brought. For a guardian to be appointed to manage your neighbor’s affairs, it must be shown that he is wholly incapable of managing his own affairs. For him to be committed to a psychiatric facility, it must be shown that he is mentally ill (current, substantial disturbance of thought, mood, perception or orientation which significantly impairs judgment, capacity to control behavior or capacity to recognize reality) and that he is dangerous to himself or others or property and is unwilling to be admitted voluntarily.

Adult Protective Services would likely participate in a guardianship or commitment proceeding. However, your documentation of events will be valuable in meeting the high burden for showing that a guardian must be appointed or that he must be committed. Beyond the high burden in guardianship and commitment proceedings, there may not be any one willing to serve as guardian (you might be recruited). Additionally, guardianship and commitment proceedings may be expensive and time consuming. Criminal complaints may also be an option if your neighbor’s activities involve criminal activity. Complaints for injunctive relief (issuance of a court order requiring that your neighbor do or not do something may also be filed. If an injunction is violated, an application may be made to the court to have your neighbor arrested for violation of the court’s order. Again, however, an action for injunctive relief could be expensive and time consuming.

To summarize, in addressing a mentally disturbed neighbor, you should:

  1. Attempt to obtain contact information prior to his becoming fully incapacitated.
  2. If an emergency arises, contact emergency services to remove the source of the emergency.
  3. Prepare a written record of the events associated with the particular resident.
  4. Follow up by contacting the County Adult Protective Service. 5.) Assist the Adult Protective Service case worker in remedying the problem on a long term basis.

Below are numbers for the Adult Protective Services in each county.

Atlantic County: 888-426-9243

Bergen County: 201-368-4300

Burlington County: 609-261-1000 x249 or x356

Camden County: 609-225-8146

Cape May County: 609-886-6200

Cumberland County: 609-825-6810 x219

Essex County: 201-678-9700

Gloucester County: 609-256-2250

Hudson County: 201-915-7280

Hunterdon County: 908-788-1300

Mercer County: 609-989-6488

Middlesex County: 732-745-3635

Monmouth County: 908-531-9191

Morris County: 201-326-7282

Ocean County: 908-929-2091

Passaic County: 201-881-3216

Salem County: 609-229-3200

Somerset County: 732-418-3400

Sussex County: 973-383-3600

Union County: 908-355-4949

Warren County: 908-475-4744

A Guide To Attorney Fees

Posted on Author By Francis J. McGovern, Jr., Esquire

The most common arrangements for retaining attorneys are hourly, retainer, task based, contingent fee or mixed-contingent. An attorney’s ‘out-of-pocket’ expenses must be paid in addition to the attorney’s fee. These expenses can be minimal or very large. Examples of large expenses include expert fees, transcript fees and/or copying fees. The client must determine whether the attorney will advance these expenses or require the client to pay as they go. Most attorneys will require the client to pay as they go. This method not only avoids having the attorney advance the funds, it makes the client keenly aware of the expenses.

In an hourly fee arrangement the attorney is paid at an hourly rate for the time spent working on the case. The client should be provided with detailed bills showing how the attorney spent the time. Advantages of an hourly fee arrangement include: the client determines the level of effort invested and, if a case is resolved quickly, the client may pay a much lower attorney fee than the client would have been paid if the Attorney had to be paid thirty percent or more of the recovery (as would happen with a contingent fee arrangement). The disadvantage of an hourly fee arrangement is that budgeting may be more difficult and the client bears the entire risk of losing the case. If the case is lost, the client gets no recovery and must still pay the attorney fees and disbursements.

Retainer agreements provide an annual fee for a group of specified services. Retainer agreements provide ease in budgeting. With a retainer agreement, the attorney assumes the risk that the effort demanded by the Association will be greater than the retainer quoted. Because of this almost open ended risk; retainer agreements may include a ‘risk premium’. This would be a cushion between what the attorney thinks it will actually cost in terms of time to complete the tasks versus a somewhat higher retainer bid figure. Association’s that throw off other legal work (i.e. litigation, collections etc.) may be able to negotiate a lower retainer without a risk premium if the other legal work is given to the retainer attorney. Association’s seeking to avoid paying a ‘risk premium’ and mature associations who wish to closely direct attorney effort generally choose an hourly fee agreement.

With a task based arrangement, the attorney has a fixed fee schedule for set tasks or a case. For example, a certain charge for preparation of the complaint, another charge for preparation of the summons etc. This arrangement is similar to an hourly arrangement but allows the client to monitor and budget expenditures on a per task basis. Where the hourly rate structure places the risk of attorney inefficiency on the client, the fixed fee structure places inefficiency risk on the attorney.

In a contingent arrangement, the attorney is not paid unless the attorney obtains a recovery. The advantage of this is that the client does not have to pay fees up front, other than expenses. The client avoids ‘throwing good money after bad’ and the risk of losing the case is shared with the attorney. Disadvantages of this type of arrangement are that the attorney may receive a wind fall – if a case settles and is paid just after being turned over to the attorney, the attorney is still entitled to the agreed upon percentage of the recovery. Further, if the attorney does not see a prospect of significant recovery, the attorney may not pursue the matter as aggressively as the client may like.

With a hybrid or mixed-contingency fee structure (used in litigation), the attorney may work at a significantly reduced hourly rate in exchange for the chance of recovering a percentage of any award. This arrangement distributes the risk of loss between the client and the attorney and provides incentive for efficiency and for a positive result between the client and the attorney.

Regardless of the fee relationship, in the end, the client-attorney relationship should be viewed as a continuing one that may have to be modified over the course of the representation. This will depend on various variables such as the amount in controversy, how complicated or routine the work is and how much money the client has to spend on attorney fees.

In the past, many Associations have retained counsel on an annual ‘retainer’ basis because of ease in budgeting. However, because of the substantial demands of today’s community associations, many law firms and associations are moving from retainer agreements to hourly or task based agreements.

Show Me The Money – Collecting From Debtors

Posted on Author By Francis J. McGovern, Jr., Esquire

Chances are your Association doesn’t have spare money lying around.  Chances are your Association has five or more “regular debtors” – the ones who are on the arrearage list year-in and year-out.  Chances are that, since the recent recession, 10% of your budget and/or 10% of your homes are in arrears. Chances also are that some debtors have abandoned their units and the Board has had to deal with frozen pipes, mold, vandalism or all three.

Our job is to get non-payers out, get vacant units occupied and get cash flowing.  We do this in one or more of the following ways.  Unless you want to increase the bad debt expense line item in your budget year after year, you should be pursuing one or more of these methods:

  • Payment Plans/Settlement Agreements.
  • Amnesty Programs.
  • Membership Privilege Suspension (Pools and Parking Too!)
  • Money Judgment Lawsuits.
  • Bank Account Levies.
  • Wage Executions.
  • Rent Levies.
  • Lien Filing.
  • Foreclosure Lawsuits.
  • Receivers in Aid of Execution.
  • Rent Receivership.
  • Rent Sharing Agreements.
  • Mortgagee In Possession Lawsuits.
  • Quit Claim Deeds.
  • Sheriff’s Sales Based on Foreclosure or Money Judgment Suits.

We give presentations, throughout New Jersey, on various collection techniques, including those listed above.  Please contact us if you would like to schedule a free collection presentation for your New Jersey Home Owners Association, Condominium Association or Co-Op.

Lipstick On A Pig

Posted on Author By Francis J. McGovern, Jr., Esquire

Putting lipstick on a pig makes the animal no less a pig.  Cladding the lobby in marble and installing fancy fixtures makes an old building no younger.  Converting old buildings, especially high rise buildings, to condominiums raises unique due diligence, developer-transition, construction defect, financing and litigation issues.  Although the refinished lobby may look great there is much more there than meets the eye.

What due diligence process has the converting developer/sponsor gone through in acquiring the building?  Has the unit owner-controlled board obtained the developer/sponsor’s due diligence documentation?  Was there/is there a fuel storage tank on the property?  Was there/is there asbestos on the property?  Was there/is there lead paint on the property?

What about the water supply – where does it come from?  Is there a water tank on the property?  Is the water supply plumbing system serviceable?  What about sanitary plumbing?  What about airshafts and other conduit?  Has the elevator been maintained, renovated or replaced?  What about the fire suppression and fire/smoke alarm systems?  How old is the roof?  What is the roof made of?

What’s under that fancy new façade and how long will the fancy new façade last?  Is there a parking deck?  Does the parking deck comport with what was described in the public offering statement?  Is the building subject to other contracts – billboards, cell phone towers, laundry rooms?  What are their terms?  Who gets the money?  Has there been any “pre-payment” to the developer/sponsor?

How old are the windows? Who owns the windows?  If the unit owners own the windows, is the Association being stuck with a water infiltration problem anyway?  How old is the HVAC equipment?  Are there detailed maintenance records?  How old is the boiler system?  What about the electrical system?

Is the Association inheriting a staff such as maintenance employees, managers, black seal building engineers etc.?  Do any of these employees live on site?  Are there employee leases in place?  Are there employment agreements in place?  Are the employees unionized?  Are the staff members adequately experienced and trained?  Are they loyal to the association rather than the developer?

The questions go on and on.  The point is that, although purchasers may be dazzled by cosmetic enhancements, unit-owner board members must not be.  Especially in the condominium conversion context, the unit-owner board members must hire the right professionals to evaluate the Associations position from the physical to the financial to the personnel standpoints.  We assist unit owner board members in forming the professional teams necessary to evaluate the Association’s position and, where necessary, we litigate on behalf of Associations to compel the developer/sponsor to make things right.

Crime Pays

Posted on Author By Francis J. McGovern, Jr., Esquire

Crime pays and crime in community, condominium and co-op associations can pay handsomely – hundreds of thousands of dollars, if not more.  Board members must take steps to minimize the opportunity to steal.   The ultimate responsibility for safekeeping an Association’s money lies with the board members; not a single board member, not the manager, the Attorney General, the County Prosecutor or even the Association’s auditor.

As a board member, ask yourself:  “Who has check signing authority?”, “Who opens the bank statements?”, “Is there a credit card?”, “Who reviews the credit card statement?”, “When was the last time we reviewed our financial controls with the auditor?”, “What does our crime policy and related insurance cover?” etc.

Crime happens in community, condominium and co-op associations, there is no bulletproof solution but board members must do what they can to prevent it.

Legislation to Benefit Age Restricted Communities

Posted on Author By Francis J. McGovern, Jr., Esquire

There is a pending bill that may provide much needed assistance for age restricted communities that are suffering with abandoned units in their communities. The bill requires mortgage companies to maintain vacant, age-restricted units during its foreclosure process and also requires the mortgage companies to pay the ongoing monthly assessments to the Association throughout the foreclosure process.

The bill was introduced into the Assembly on June 6, 2013 as A4169 and is sponsored by Assemblyman Gregory P. McGuckin and Assemblyman David W. Wolfe. An identical bill was introduced into the Senate on May 30, 2013 and is sponsored by Senator James W. Holzapfel.

Pursuant to the bill, all mortgage companies that are foreclosing on any residential unit will be required to notify the municipality in which the unit is located within ten days of filing a mortgage foreclosure complaint (or within thirty days if the mortgage company already instituted a foreclosure action). The notice must provide the municipality with the contact information for the mortgage company’’ s representative that is responsible for receiving complaints of property maintenance and code violations.

If the unit owner abandons the unit that is being foreclosed upon and the property is found to be a nuisance or in violation of any state or local code, then the local public officer may notify the mortgage company and the mortgage company shall then be liable to abate the nuisance or correct the violation. If the mortgage company does not correct the nuisance or violation, then the municipality may do so and charge back the mortgage company for the costs incurred.

If the abandoned unit is located within an age-restricted community, then the mortgage company will be liable to pay the ongoing monthly assessments to the Association as well as maintain the property while the unit is in foreclosure. The mortgage company will be held jointly and severally liable along with the owner to pay the ongoing monthly assessments to the Association. Therefore, in the event that the monthly assessments are not paid, the Association will be able to pursue the mortgage company as well as the owner in a collection action. As a result, this bill will greatly assist age restricted communities with collecting assessments on abandoned units. However, this bill has only recently been introduced and we will continue to monitor its progress.

How Is Your Association’s Immune System?

Posted on Author By Francis J. McGovern, Jr., Esquire

Around this time each year many people get vaccinated against the common but debilitating illness, the flu. If you ask these people why they get their annual flu shot, they may respond with that common expression, “an ounce of prevention is worth a pound of cure.” Since prevention is at the forefront of so many people’s minds this time of year it is also a good time to determine whether your association is properly immunized against a common but debilitating condition affecting so many communities, the slip-and-fall or trip-and-fall personal injury lawsuit.

One of the most powerful tools an association can use to protect itself against these claims is the tort immunity afforded to community associations pursuant to N.J.S.A. 2A:62A-12. et seq. According to these statutes, as long as the necessary language is included within the Association’s bylaws, the association will not be liable in any personal injury lawsuit brought by a unit owner for bodily injury occurring on the association’s property. See, N.J.S.A. 2A:62A-13(a). However, the immunity afforded under these statutes will not apply if the association’s willful, wanton or grossly negligent conduct causes the unit owner’s injury. See, N.J.S.A. 2A:62A-13(b).

The power of this statutory immunity to insulate an association from liability was recognized by our State Judiciary as recently as September 25, 2013. In the Unpublished Decision in Marion Costa v. Shadow Lake Village Condominium Association, Inc., et al., 2013 N.J. Super. Unpub. LEXIS 2342 (App. Div. 2013) the Appellate Division of the New Jersey Superior Court affirmed the trial court’s decision to dismiss a unit owner’s claims against the association, and the association’s property manager, for injuries arising out of a slip-and-fall on the common property, because a tort immunity provision was included within that association’s bylaws. In Shadow Lake, both the Appellate Division and the trial court concluded that the circumstances leading up to the unit owner’s injuries may, at worst, be characterized as simple negligence. Fortunately for the association in Shadow Lake, the language within the association’s bylaws rendered it immune to such claims.

Although the tort immunity afforded by N.J.S.A. 2A:62A-12. et seq, is a powerful tool against personal injury claims, the overwhelming majority of bylaws implemented by developers during original construction do not include the language that is necessary to secure this protection. If that is the case in your community, tort immunity is only one simple amendment away. According to N.J.S.A. 2A:62A-14(a) tort immunity can be added to any set of bylaws by an amendment approved by a two-thirds vote of the association’s membership. Once adopted, the immunity will then apply to any actions for injuries sustained after the date the new bylaw provision becomes operative. See, N.J.S.A. 2A:62A-14(s). Please give us a call if you would like to discuss implementing tort immunity in your association.

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