New Jersey Superior Court Rules on Surplus Funds Affecting Homeowner's Associations
In this case Hopewell Township claimed entitlement to all surplus funds above the mortgaged amount arguing that under current New Jersey Law the owner of the affordable unit would be “personally obligated to pay the administrative entity responsible for assuring affordability any surplus funds,” should the property be foreclosed upon. However, the Brandon Farms Condominium Association argued that the New Jersey Condominium Act, which provides homeowner associations the right to collect on any liens, takes priority over the statute cited by Hopewell Township. Brandon Farms also argued that it would be impractical to expect an association to provide a myriad of services to its members if it has no means of collecting assessments to fund the costs of services.
Despite the Township’s claim to the entire surplus, Judge Shuster found that Brandon Farms was entitled to have their liens satisfied using surplus funds, and that only after the Association collected on their liens would any remaining monies go to the Township.
and if after all claims were satisfied,and still a surplus remained,would it then belong to Mr. Lima?
No. The intent of the rule that the Township was arguing was to ensure that affordable homeowners do not make a windfall by purposely going to a foreclosure. So, chances are Mr. Lima would not receive any funds as by rule, they would go to the Township.