Among other prohibitions, the FHA prohibits discrimination in housing based on disability.  One type of action specifically prohibited by the FHA is the refusal of housing providers or community associations to permit reasonable modifications – i.e., a structural alteration – of an existing premises, occupied or to be occupied by a person with a disability, when the modification may be necessary to afford the person with full enjoyment of the premises.  The Joint Statement explains who qualifies as a person with disabilities under the FHA and what information may be requested regarding a disability.  The Joint Statement also discusses the difference between a “reasonable modification” and a “reasonable accommodation” and gives specific examples of what constitutes a “reasonable modification”, which include widening doorways to allow for wheelchair accessibility, installing grab bars in bathrooms or installing a ramp to provide access to a public or common area, such as a clubhouse.  Further, although housing providers or associations are required by the FHA to permit these modifications upon notice and a proper request, in most circumstances, the person requesting a modification is responsible for payment of any costs involved.

If you would like to discuss this legislation or how it affects your community association in more detail, please contact Jonathan H. Katz at (609) 219-7448 or via e-mail at jkatz@stark-stark.com

As specified in the text of the legislation, the obligation to remove snow and ice is imposed upon a person “who owns or controls a parking area which is open to the public or to which the public is invited ... ”.  Although it is arguable as to whether the parking areas in a private community association would be considered “open to the public”, and thus fall under the requirements and potential penalties associated with this law, the prudent approach for all community associations with handicapped parking spaces on common property is to comply with these new requirements.  In addition, associations should consider incorporating these requirements into any contracts regarding snow removal services.

If you would like to discuss this legislation or how it affects your community associations in more detail, please contact Jonathan H. Katz at (609) 219-7448 or via e-mail at jkatz@stark-stark.com.  

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.

– 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.

While automatic fire suppression systems have been required by state law in residential buildings of six stories or higher since 1989, older condominium and co-op buildings have been exempt from these requirements.  That is until the DCA’s recent proposed amendments to the New Jersey’s State Fire Prevention Code, specifically, N.J.A.C. 5:70-4.17, which would require older high-rises – both residential and commercial – to be retrofitted to include fire suppression systems.  The DCA indicated that the change was prompted as a result of the special hazard and life-safety issues that high-rises represent in rescue and firefighting operations.  The proposed amendments have been submitted by the DCA and are now subject to a sixty day comment period.  If enacted, condominium and co-op buildings would have up to four years to install an approved fire suppression system. 
   
Should the proposed amendments be enacted, condominium and co-ops throughout the State may be on the hook for significant expenses in order to retrofit these older building to comply with the new law.  While experts estimate the cost for putting fire suppression systems into new construction averages between $1.00 to $2.50 per square foot, adding a fire suppression system to an older building is more difficult and much more expensive.  Some estimates range between $5.00 to $7.00 per square foot, which could cost upwards of $25,000 per building.  Such costs would, of course, be bourn by the unit owners, which may find themselves paying a special assessment, especially if the association’s reserves are not sufficient to foot the retrofitting bill.

We will continue to monitor this proposal and provide timely updates as to its progress.  If you would like to discuss this proposal or how it affects your condominium or co-op in greater detail, please contact David J. Byrne or Jonathan H. Katz.

As specified in the text of the legislation, homeowners associations may not prohibit members from installing solar collectors so long as such collectors are placed on the roof of a single family unit or townhouse unit that is not designated as a common element or common property in the association’s governing documents.  In addition, the association may adopt reasonable rules and regulations to oversee the installation and maintenance of solar collectors with regard to: (1) the qualifications, certification and insurance requirements of individuals or contractors who install such solar collectors; and (2) the location, color, supportive structures and size of the solar collectors that may be placed on the roof.  Further, the association cannot adopt any rule or restriction that would significantly increase the costs of the initial installation of the solar collectors or that would inhibit the solar collectors from functioning at their intended maximum efficiency.

It is important to note that this legislation does not affect the rights and responsibilities of condominium owners and boards pursuant to the New Jersey Condominium Act.  In fact, because the roof of most if not all condominiums are designated as common elements or common property, the decision to install solar collectors on the roof of a condominium would have to be made solely by the condominium association’s board in its discretion.  Any attempt by an individual unit owner in a condominium to install solar collectors on common elements would be violative of the Condominium Act and, most likely, that association’s governing documents.

If you would like to discuss this legislation or how it affects community associations in more detail, please contact David J. Byrne or Jonathan H. Katz.

Earlier this year, Bill 070073 was introduced in the Philadelphia City Council, which, if enacted, would provide a tax credit for owners of condominiums and co-ops who do not currently receive regular city trash collection, recycling and bulk item collection services.  The proposed legislation, sponsored by City Councilmen Jim Kenney and Frank DiCicco, has been gaining support lately as a result of the previous efforts of the City Council and despite the opposition of Mayor John Street, who has refused to comply with a previous Court ruling that required the City to provide no-cost refuse collection services to community associations.

Bill 070073 attempts to remedy the inequities suffered by members of community associations who typically pay the same local taxes as non-association homeowners even though community association members are often denied typical municipal services such as trash  collection and recycling.  This Bill seeks to eliminate the double taxation problem by reimbursing tax payers in community associations for trash hauling expenses, which are normally privately funded by assessments paid by unit owners to their respective association.  The legislation is expected to move forward for a vote before the city counsel in the coming months.  The full text of this proposed legislation can be found here.

We will continue to monitor this proposed legislation and provide timely updates as to its progress.  If you would like to discuss this legislation or how it affects cooperatives in more detail, please contact David J. Byrne or Jonathan H. Katz.

On Thursday, July 26, 2007, the New Jersey Supreme Court issued its much awaited and highly anticipated decision in Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association.  In overturning the Appellate Division’s decision and reinstating the decision of the Trial Court, the Supreme Court found that community associations could lawfully impose reasonable restrictions on its members – such as restricting the posting of political signs or allowing access to a community newsletter – and that such restrictions do not violate the New Jersey Constitution’s protections regarding freedom of expression and equal protection.

At issue in Twin Rivers was the question of whether the New Jersey Constitution’s speech and assembly clauses should be applied to limit the authority of homeowners’ associations to promulgate certain community-wide restrictions and, if so, under what circumstances.  In the lower court’s decision, Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association, 383 N.J. Super. 22 (App. Div. 2006), the Appellate Division found that because community associations have supplanted certain responsibilities once undertaken by towns and municipalities, the individual members’ state constitutional rights to free speech outweigh the restrictions imposed by homeowners associations, even though such property is private rather than public. 

In the Supreme Court’s decision, authored by Justice John E. Wallace, Jr., the Court determined that even in light of New Jersey’s broad interpretation of its constitutional free speech provisions, the “nature, purposes, and primary use of Twin Rivers property is for private purposes and does not favor a finding that the Association’s rules and regulations violated plaintiffs’ constitutional rights.”  Moreover, the Court found that “plaintiffs’ expressional activities are not unreasonably restricted” by the Association’s rules and regulations.  Finally, the Court held that “the minor restrictions on plaintiffs’ expressional activities are not unreasonable or oppressive, and the Association is not acting as a municipality.”

You can read the Supreme Court’s decision in Twin Rivers here.

If you would like to discuss the Twin Rivers opinion and how it affects condominium associations in more detail, please contact David J. Byrne or Jonathan H. Katz.

Unlike a condominium or homeowners associations where units are owned in fee simple, in a cooperative, legal title to the property is vested in a cooperative entity and individuals purchase shares of stock in the corporation, which carry the right to occupy a unit within the cooperative pursuant to a proprietary lease.  In New York, it has long been the law that, absent discrimination or bad faith, a board can reject an applicant for any reason or no reason at all.  See Weisner v. 791 Park Avenue Corp., 6 N.Y.2d 426 (1959).  Similarly, in New Jersey, the Cooperative Recording Act, N.J.S.A. 46:8D-6(l), acknowledges and authorizes a similar approval process so long as the consent to transfer is not unreasonably withheld or would constitute discrimination under federal or state law.

The proposed legislation, which was introduced by City Councilman Hiram Monserrate (D - Queens) in February of 2006, but which has languished in committee for over a year, has been gaining support and momentum lately.  Known as Intro 119 – “The Fair and Prompt Co-op Disclosure Law”, or more commonly referred to as the “Written Rejection Bill”, would require that co-op boards provide rejected applicants with a written explanation – signed by an officer of the co-op – detailing each individual reason as to why such applicant was rejected.  The statement must also include the number of applications received and the number of applications rejected in the previous three years prior to this decision.  If a co-op board fails to provide such a written explanation, it can be held liable to the applicant for fines, punitive damages and attorneys’ fees.  The full text of this proposed legislation can be found here.

While opponents of the legislation argue that it is unfair, intrusive and too far-reaching, its supporters argue that it will force co-op boards to openly cite legitimate reasons for any rejection and will help root out discrimination, ultimately shining a brighter light onto the inner workings of New York City’s most powerful co-op boards, which were only required to begin disclosing sale prices in 2006.  The legislation is expected to move forward for a vote before the counsel in the coming months.

We will continue to monitor this proposed legislation and provide timely updates as to its progress.  If you would like to discuss this legislation or how it affects cooperatives in more detail, please contact David J. Byrne or Jonathan H. Katz.

On June 21, 2007, this bill – which had previously passed in the Assembly – easily passed in the Senate by a vote of 36-0.  The legislation would permit a condominium association – if authorized by its master deed or by-laws – to levy and collect a capital contribution, membership fee or other charge upon the sale or transfer of a unit for the purpose of defraying the association’s common expenses.  As amended by the Senate, the legislation now allows for the collection of such a fee by an association not to exceed nine (9) times the amount of the most recent monthly common expense assessment for that unit – reduced from the original proposal of eighteen (18) times.  You can view the most recent version of this legislation here.

The legislation would also settle the dispute caused by the Appellate Division’s decision in Micheve, L.L.C. v. Wyndham Place at Freehold Condo. Ass’n, 381 N.J. Super. 148 (App. Div. 2005), which invalidated a condominium working capital contribution authorized solely by the condominium’s board-enacted resolution.  More importantly, however, the legislation would authorize condominium associations who do not have provisions for working capital or membership fees in their master deed and by-laws to validly enact such amendments requiring new buyers to pay such a fee upon the purchase of their units.

Stark & Stark will continue to monitor this legislation and provide updates as to its progress.  If you would like to discuss this legislation or how it affects your association in more detail, please contact David J. Byrne or Jonathan H. Katz.

Port Liberte Homeowners Association, Inc. v. Sordoni Construction Company
N.J. Super. (App. Div. 2007) (A-2138-04)

In a case of first impression, the New Jersey Appellate Division has determined that a condominium association has standing to sustain claims for both fraud and consumer fraud against third-party contractors and manufacturers even though the fraudulent misrepresentations and omissions by these third-parties were made to the developer and occurred prior to the creation and construction of the association.  J. Randy Sawyer, Esquire, a shareholder in Stark & Stark’s Construction Litigation Group, successfully argued this matter as amicus curiae on behalf of the Community Associations Institute along with counsel for the homeowners’ association.  You can read Randy’s detailed discussion of the Port Liberte decision here. 

Briefly stated, the facts of Port Liberte are as follows: the Port Liberte Homeowners Association, Inc. (hereinafter “Port Liberte”) brought numerous claims against both the contractors who were involved in the construction of Port Liberte’s buildings and common elements as well as the manufacturers of the materials used in this construction, specifically, the Exterior Insulation and Finish System (“EIFS”).  As part of its complaint, Port Liberte asserted fraud and consumer fraud claims against the contractors and manufacturers, alleging that these defendants made certain fraudulent misrepresentations to Port Liberte prior to construction of the association’s buildings, albeit when Port Liberte was still controlled by the original developer.  In its decision, the Appellate Division found that because a “condominium association is the intended beneficiary of a developer’s actions ... [third parties are] on constructive notice that representations made to, and omissions withheld from, the developer will be deemed as if they are made to, or withheld from, the association, once the association assumes control of the condominium.”  The Court found that to hold otherwise would create an unjust result, which is “contrary to the legislative scheme permitting a condominium homeowners association to institute a suit to recover damages to the common elements.”

So practically speaking, what does the Port Liberte decision mean for community associations in New Jersey?  This decision – which determines essentially that an association “stands in the shoes” of the original developer and can bring claims against third parties for misrepresentations made to the developer – has wide-reaching implications for condominium and homeowners associations going through transition.  Transition can be described as the transfer of control and responsibilities from the developer to the unit owners, which includes the governance of the association, the acceptance of the common property, and the accounting of funds.  The result of the decision in Port Liberte is that associations now must be more diligent than ever in proceeding with this transition process in order to protect the rights of the association and the individuals who live in and make up the association.  As part of this process, each association should be engaging in a thorough review of the plans, specifications, books and records of the association as well as any contracts or agreements entered into by the developer on behalf of the association.  This review should be undertaken with the assistance of the association’s professionals – engineers, accountants and counsel – to determine if there are any issues and potential claims against either the developer or third-parties for the construction and representations made thereto.  If these documents have not been turned over to the association by the developer, the association has a right under the New Jersey Condominium Act and the Planned Real Estate Development Full Disclosure Act (“PREDFDA”) to request such turnover from the developer.  Moreover, prior to entering into any transition agreement or releasing the developer or any third-parties from liability for goods and services provided during the construction, marketing and sale of the association’s units, it is essential that the association consult with counsel to ensure that the association is protecting the rights of the association and complying with its fiduciary duty with regard to the health and welfare of the association.  Overall, this decision is an enormous victory for condominium and homeowner associations throughout New Jersey, reaffirms the Legislature’s mandate to protect consumers from unconscionable practices and further demonstrates that New Jersey has one of the strongest consumer protection laws in the nation.

If you would like to discuss the Port Liberte opinion and how it affects condominium associations in more detail, please contact David J. Byrne or Jonathan H. Katz.

Actually, 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.

So how is a condo-hotel different from a regular condominium?  Generally, while each condominium unit in a condo-hotel is owned individually, these units are rented out by the hotel developer/operator like a normal hotel, and the owners share facilities and common areas with not only other unit owners, but also with hotel guests.  Moreover, in addition to such facilities and services provided in normal condominiums, condo-hotel owners and guests may also share spa and gym services, front desk services and food services.  One question that arises is who has control over these facilities and services – the unit owners or the developer/operator?  The answer depends on the condominium’s governing documents and separate property/maintenance agreements.  Owners in condo-hotels often agree to give up certain rights to make decisions, including the right to decorate and maintain their individual units, in order to comply with uniform standards, especially those participating in the hotel’s rental program.

For some, these condo-hotels are second homes or vacation getaways.  For others, they are seen as investments with the lure of returns from rentals and appreciation.  The sales pitch is simple – own a little piece of paradise without the hassle of finding renters or fixing a clogged toilet.  However, there are potential pitfalls for the unaware purchasers of these units.  Occupancy is seen as the most troubling factor; namely, how good is your investment if the occupancy rate is at or below 50%?  One condo-hotel in Las Vegas opened in June 2006 to little-to-no fanfare and, unfortunately, has been unable to live up to owners’ expectations for rental revenue, with units going vacant for significant periods.  Additionally, the new construction and emergence of a substantial number of condo-hotel units has created a potential glut of available units on the market.  Another factor to be wary of is the additional fees that may go along with ownership of a condo-hotel unit.  Aside from general monthly maintenance fees, unit owners may also be saddled with maid service/cleaning fees, rental/management fees and furniture replacement funds.  Only time will tell, but for now, that little piece of paradise may come with a higher then expected price tag.
        
If you would like to discuss the contents of this blog and how it affects condominium associations in more detail, please contact one of the attorneys in Stark & Stark’s Community Associations Group.               

This week's New Jersey Legal Update is presented by Jonathan Katz, member of Stark & Stark’s Community Associations Group.

You can download the New Jersey Legal Update Podcast # 59 here. (5.13 MB)

Technorati Tags: New Jersey : Podcast :  Community Associations : Finderne Heights

In a case of first impression in New Jersey, the Appellate Division has determined that mediation – or Alternate Dispute Resolution (“ADR”) – is not a prerequisite to litigation and may be bypassed under compelling circumstances such as the immediate threat to the safety of others or an immediate and substantial threat to property. In addition, the Court agreed that the Association had a statutory right to bring an action for injunctive relief against Defendants, and that condominium tenants – as opposed to unit owners – are not covered by the plain language of the Condominium Act. The decision, approved for publication on January 23, 2007, was a victory for the Finderne Heights Condominium Association, which was represented by David J. Byrne and Jonathan H. Katz.

The facts are as follows. In order to prohibit a tenant from continuing a pattern of harassing and violent behavior towards her neighbors and Association employees, the Association sought, by way of Court Order, to compel this tenant to comply with the Association’s governing documents and to enjoin her from any further acts of harassment, trespassing or defacement of Association property. The Trial Court dismissed the Association’s Complaint, finding that the Association failed to comply with N.J.S.A. 46:8B-14(k) by first submitting the matter to either mediation or dispute resolution. The Association then appealed the Trial Court’s dismissal of its Complaint, arguing that the Association had a statutory right to bring an action for injunctive relief and further, under the circumstances presented here, that there the Association has no duty to first submit its claims to ADR.

The Appellate Division’s decision held that “so long as the unit owner and Association have a legitimate basis under the by-laws, the deed, or related covenants to file suit, same may be filed pursuant to N.J.S.A. 46:8B-16(b) without first resorting to alternative dispute resolution.” While still espousing the benefits of mediation, which may provide a quicker and perhaps more efficient method of resolution to disputes between unit owners rather than litigation, the Court upheld the Association’s right to bypass ADR, especially in the event – as was the case here – that there was a threat to the safety of others.

The Appellate Division’s decision in Finderne Heights Condominium Association v. Rabinowitz can be found here.

If you would like to discuss the Finderne opinion and how it affects condominium associations in more detail, please contact David J. Byrne or Jonathan H. Katz.

On Thursday, January 4, 2007, the New Jersey Supreme Court heard oral argument on the matter of Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association. The Supreme Court’s forthcoming opinion – which is not expected for several months – may prove to be the one of the most influential decisions involving community associations in over a decade.

At issue in Twin Rivers is the question of whether the New Jersey Constitution’s speech and assembly clauses should be applied to limit the authority of homeowners’ associations and, if so, under what circumstances. In the decision on appeal, Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association, 383 N.J. Super. 22 (App. Div. 2006), which was authored by Judge Kestin, the Appellate Division found that community associations have supplanted certain responsibilities once undertaken by towns and municipalities and that state constitutional rights to free speech outweigh certain restrictions imposed by homeowners associations, even though such property is private rather than public.

The argument before the Justices of the Supreme Court was both fascinating and even heated at times, sprinkled with moments of levity. The Twin Rivers Homeowners’ Association argued that the Appellate Division’s decision to apply a constitutional standard was too expansive and advocated instead the use of the “business judgment rule”, which was utilized by the Trial Court in its original decision. The Association asserted that Judge Kestin “blurred the distinction” between a public entity, such as a township or municipality, and a private entity, such as a homeowners’ association, arguing that the state Constitution can only apply to public entities. Committee for a Better Twin Rivers – the group of residents who challenged the Association’s rules and regulations – argued that the Court should embrace the Appellate Division’s decision, stating that here the Association effectively stifled the residents’ freedoms of speech and assembly and created a “bubble of no-speech zones”.

During the argument, Chief Justice James R. Zazzali went so far as to call the Appellate Division’s decision “creative,” and focused on whether the Association should be considered the functional equivalent of a town or municipality. Justice Barry T. Albin commented that the Appellate Division’s decision appeared to require submission of even the most trivial issues – such as the posting of political signs or access to a community newsletter or meeting room – to be heard by a Superior Court Judge, which would open the floodgates for increased amounts of litigation. But perhaps the most vocal advocate for the Association’s position was Justice Roberto A. Rivera-Soto, who called the Committee’s various challenges of the Association’s rules “petty, not consitutional.”

The Supreme Court will now be left to determine whether the Appellate Division’s decision ultimately went too far and was too expansive, leaving community associations without clear and defined parameters as to the ability to enforce their rules and regulations, as well as to uphold the rights and responsibilities of their members.

The webcast of the argument before the Supreme Court can be found here.

Stark & Stark will continue to monitor this significant case and provide timely updates. If you would like to discuss the Twin Rivers opinion and how it affects condominium associations in more detail, please contact one of the attorneys in Stark & Stark’s Community Associations Group.

Technorati Tags: New Jersey : Condo : Community Association

On July 24, 2006, President George W. Bush signed into law H.R. 42 "The Freedom to Display the American Flag Act of 2005".  H.R. 42 prohibits community associations from adopting or enforcing a policy or agreement that "would restrict or prevent a member of the association from displaying the flag of the United States on residential property within the association with respect to which such member has a separate ownership interest or a right to exclusive possession or use."  The law does provides certain prohibitions, namely; (1) flags must be displayed in a manner that is consistent with any rule or custom pertaining to the proper display or use of the flag, including the Federal Flag Code, 4 U.S.C. ' 1 et seq.; and (2) community associations may place reasonable time, place and manner restrictions on such display of the flag necessary to "protect a substantial interest" of the association.

Although this new law bolsters the ability of many individuals throughout the country to overcome their respective associations' restrictive rules and regulations pertaining to displaying the American flag, this provision only enhances the protections already granted to community associations by New Jersey law.  In 2003, the Planned Real Estate Development Full Disclosure Act ("PREDFDA"), N.J.S.A. 45:22A-48.1, was amended to add such protective provisions to those individuals residing in community associations wishing to display the American Flag or yellow ribbons or signs supporting U.S. troops.  This provision provides:

A homeowners' association formed to manage the elements of property owned in common by all members of a community, whether it be an association managing a condominium, a private community, including retirement communities, or a cooperative housing development, shall not adopt or enforce a rule or bylaw limiting or prohibiting the display of the flag of the United States of America or yellow ribbons and signs supporting United States troops.  Any such rule or bylaw adopted by a homeowners'association in violation of this section shall be null and void.

This provision goes on to allow for the removal of any such flags, ribbons or signs when such display threatens public safety, restricts necessary maintenance activities, interferes with the property rights of another or is conducted in a manner inconsistent with the proper way to display the flag or the Federal Flag Code.

If you would like to discuss how The Freedom to Display the American Flag Act of 2005 may affect your association in more detail, please contact one of the attorneys in Stark & Stark's Community Associations Group.

Technorati Tags: New Jersey : Community Association :  Flag

This bill would also settle the disputes caused by the Appellate Division’s decision in Micheve, L.L.C. v. Wyndham Place at Freehold Condo. Ass’n, 381 N.J. Super. 148 (App. Div. 2005), as discussed in a previous blog.  Decided in October 2005, Micheve invalidated a condominium working capital contribution authorized solely by the condominium’s board-enacted resolution. The Court found that such a resolution could not be enforced because it violated the provisions of the New Jersey Condominium Act requiring common expenses to be charged to all unit owners based on their proportionate interests in the common elements. Additionally, the Court’s decision called into question the validity of collecting such a capital contribution or membership fee – even if authorized by an association’s master deed or by-laws – suggesting that such a charge may also be violative of the Condominium Act.

Bill A-2822 – as proposed – would amend the Condominium Act, N.J.S.A. 46:8B-15(e), to address the Court’s concerns in Micheve, and specifically allow for an association to collect such a fee if authorized by its master deed or by-laws. The proposed language of the Bill states “[i]f authorized by the master deed or bylaws, the association may levy and collect a capital contribution, membership fee or other charge upon the initial sale or subsequent resale of a unit, for the purpose of defraying common expenses, or otherwise provided that such charge shall not exceed 18 times the amount of the most recent monthly common expense assessment for that unit.” After coming out of the Assembly’s Housing and Local Government Committee, this version of Bill A-2822 was overwhelmingly passed by the Assembly on June 22, 2006, by a vote of 68-5, and then promptly referred to the Senate Community and Urban Affairs Committee. It is expected to be voted on by the Senate and may end up before the Governor within the coming months.

While this legislation would not provide any greater rights to condominium associations that currently charge capital contributions or membership fees pursuant to their master deed and by-laws, it would specifically authorize by statute the issue left undecided by Micheve – namely whether capital contributions in general violate the Condominium Act. Moreover, the legislation would authorize condominium associations who do not have such provisions in their master deed and by-laws to validly enact such amendments requiring new buyers to pay certain capital contributions and membership fees upon the purchase of their units. Finally, this Bill would reenforce the Court’s decision in Micheve making it illegal for condominium associations to collect capital contributions enacted solely by Resolution.

Stark & Stark will continue to monitor this significant legislation and provide timely updates as to its progress. If you would like to discuss the contents of this blog or how it affects your association in more detail, please contact one of the attorneys in Stark & Stark’s Community Associations Group.

Pursuant to the Municipal Services Act, N.J.S.A. 40:67-23.2 to -23.8, every municipality in New Jersey is required to either provide certain services to each qualified private community within its borders or reimburse the community for these services, including the removal of snow, collection of trash or recyclables or lighting of roads and streets. The purpose of the Municipal Services Act is simple – eliminate double taxation of community association residents. As discussed more fully in one of the seminal cases interpreting the Act, Briarglen II Condo. Ass’n, Inc. v. Township of Freehold, 330 N.J. Super. 345, 353 (App. Div. 2000) – litigated by David J. Byrne, Co-Chair of Stark & Stark’s Community Associations Group – the Appellate Division determined that the legislative intent of the Act was to “help eliminate double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.”

Although the Municipal Services Act went into effect in January of 1993, many qualified associations fail to take advantage of having their municipality provide these services – or the reimbursement for them – simply because they are unaware that they are entitled to them. This means countless associations in the state – like those formerly unaware in Long Branch – may be entitled to significant reimbursements that could be used to free up other funds for capital reserves, necessary repairs, or long-overdue improvements to their communities.

In an effort to clarify the rights of the over one million New Jersey citizens who reside in various community associations governed by an association board, the New Jersey Supreme Court has recently announced that it has granted certification and will hear the Twin Rivers Homeowners’ Association’s appeal of the Appellate Division’s decision in Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association, 383 N.J. Super. 22 (App. Div. 2006). The landmark Appellate Division decision issued February 7, 2006, was previously the subject of an informative blog and podcast by David J. Byrne, Esquire, Co-Chair of the firm’s Community Associations Group.

A recent New Jersey Lawyer article speculates that the eventual Supreme Court decision may be the biggest free-speech case in the state since the Supreme Court’s 1994 decision in New Jersey Coalition Against War in the Middle East v. J.M.B. Realty Corp., 138 N.J. 326 (1994). In New Jersey Coalition, the Supreme Court ruled that private shopping malls must – subject to reasonable restrictions – provide free-speech rights to demonstrators and allow leafletting on issues of public import. In doing so, the Court observed that suburban shopping centers “have substantially displaced the downtown business districts at the centers of commercial and social activity.” In Twin Rivers, the Appellate Division went even further than the Court in New Jersey Coalition to say that community associations essentially perform public functions and have supplanted the role once played by towns and municipalities. Moreover, the Court in Twin Rivers went on to hold that state constitutional rights to free speech outweigh certain restrictions imposed by homeowners associations, even though such property is private. The Supreme Court will now be left to determine whether the Appellate Division’s decision went too far and was too expansive, ultimately leaving community associations without clear and defined parameters as to the rights of their members.

Stark & Stark will continue to monitor this significant case and provide timely updates as to its progress. If you would like to discuss the Twin Rivers decision and how it affects condominium associations in more detail, please contact one of the attorneys in Stark & Stark’s Community Associations Group.

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