Several experts in the field have opined that these types of window wall systems will generally fail within 5 to 15 years.  This is in stark contrast to concrete and steel buildings which have a 50+ year life span. Moreover, buildings with window walls require significant amounts of maintenance to ensure that they function as they should. Even if the system doesn't fail, Associations must hire engineers and other contractors to keep up with the maintenance of these systems.  Not surprisingly, these window wall systems are often cheaper and faster to install than a typical concrete or steel wall system.  This makes a window wall an enticing choice for a developer looking to maximize their bottom line.
 

For buildings with window wall systems only on the top most floors, the cost of replacement could be hundreds of thousands of dollars.  Buildings comprised entirely of these systems could be facing tens of millions of dollars worth of repairs.  For the Board Members of affected Associations, there are generally only two options: special assess the owners for the cost of the repairs, or file a lawsuit against the developer and contractors in an effort to have them pay for the repairs.  Stark & Stark has been very successful in recovering from developers and subcontractors the money that their clients need to repair or replace their own window wall systems.  Moreover, we can guide the Association through the complicated process of choosing experts, navigating insurance issues and fielding and responding to unit owner complaints which occur in virtually every lawsuit.  We have also counseled our clients on how to hire the right experts to ensure that the window wall systems are maintained in an effective, but cost efficient manner.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Mark Wiechnik at 609-895-7249 or by email at mwiechnik@stark-stark.com

In materials given to Shore Club buyers, the neighboring building was depicted as a 12 story high rise.  However, when it was built, the neighboring AquaBlu, ended up being 32 stories tall.  Ultimately, the jury awarded each unit owner 20 percent of what they paid for their units, presumably the increased value of a unit with a view of the skyline.  Under the New Jersey Consumer Fraud Act, that amount could be trebled, making the total judgment just under $4 million.

This case is an example of how the consumer protection statutes in New Jersey operate, and that if you purchase a townhome or condominium unit and rely upon certain information provided by the Developer and that information proves to be untrue, then you may have recourse in the court system.

This decision, while insulting to builders, is potentially a disaster for condominiums and homeowners associations that depend upon the developer or sponsor's insurance policies to pay for the damage caused by shoddy construction. In many cases, developers create a separate company for each development they build. These companies typically have no assets, employees, bank accounts or income, which leaves insurance policies as the only potential source of recovery for most associations. The court's finding makes it much more difficult to recover from these policies, and could leave an association with huge damages no way to pay for the costly repairs that they must undertake. Ironically, in this instance not only does the insolvent builder misrepresent the quality of the construction, it further hurts its customers and associations by building in such a manner that it jeopardizes insurance coverage which is the only means by which the association could be reimbursed for its damages.

A court of appeals in California, however, recently prevented a Developer from doing just that.  The association in Villa Vicenza Homeowners Association v. Nobel Court Development, LLC filed suit against the Developer, for failing to provide a sufficient reserve fund and for failing to repair various construction defects.  The Developer then filed a motion to compel arbitration of the claims under the provisions of the master deed that it had drafted.  The trial court denied that motion and the appellate division affirmed that decision.  In doing so, the court found that although arbitration agreements are generally enforceable (and to some degree encouraged), this was not an "agreement" because the association did not exist at the time the terms were contemplated and drafted and never had an opportunity to negotiate any of the terms of the association governing documents.  The court found that although governing documents are enforceable generally against unit owners prohibiting or encouraging certain conduct, treating the governing documents "as a contract such that they are sufficient to waive the right to trial by jury does not comport with the importance of the right waived."   Meaning that enforcing such an agreement in which the unit owners have little or no say whatsoever is not permissible when you are enforcing a term with such importance as waiving the right to a jury trial. This term was clearly meant to severely limit the rights of the association for the sole benefit of the Developer, and thus the court would not enforce the term against the association.  The Association was free to continue it suit against the Developer.

Generally, the Fair Housing Act (“FHA”) provides that it is unlawful “[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of ... familial status ....” 42 U.S.C. § 3604(a). The FHA further precludes representing “to any person because of ... familial status, ... that any dwelling is not available for ... rental when such dwelling is in fact so available.” 42 U.S.C. § 3604(d). However, the FHA provides an exception for discrimination on the basis of familial status for housing “for older persons.” 42 U.S.C. § 3607(b)(1). This gives municipalities and groups of older citizens to create over 55 communities which provide tax revenue, without expenses such as schools.

The Act defines “housing for older persons” in part as housing "intended and operated for occupancy by persons 55 years of age or older" and (i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older; (ii) the housing facility or community publishes and adheres to policies and procedures that demonstrate the intent required under this subparagraph; and (iii) the housing facility or community complies with rules issued by the Secretary for verification of occupancy. As long as the Association demonstrates intent to provide housing for older persons, establishes regulations related to that intent and enacts a plan to enforce the rules, the Association will maintain its status and whatever benefits were conferred upon it as a result of this status. (See also 24 C.F.R. 100.304 through 100.308). 

Over 55 communities must be vigilant not only in surveying their unit owners, but also in enforcing the provisions of the master declaration or applicable restrictive covenants, otherwise, the Association runs the risk of losing its designation as an over 55 community, exposing it to litigation risk for discrimination as well as potentially losing any tax benefits were conferred upon the community.

The fees collected by associations across the country offset some of the operating expenses of the association without directly affecting all of the unit owners by raising monthly association fees. Banning these fees would have had a detrimental effect on the bottom line of many associations, forcing them to raise monthly maintenance fees in order to offset the difference. Raising fees would make units harder to market and sell, and ultimately further damage the real estate market and the overall health of associations nationwide. However, after bringing this detrimental effect of the new regulation to the attention of the FHFA, the rule was specifically altered to exempt homeowner associations that use the proceeds to benefit the community it serves. For now, it appears that the transfer fees charged by associations are safe.

Unfortunately, many associations are presently unaware of these protections even though the MSA was enacted over 17 years ago.  For example, unit owners in a condominium in Dover, New Jersey are presently attempting, through a petition to the mayor of Dover, to obtain a reimbursement of nearly $800 per month for trash removal service.  The Township of Dover claims that it would provide curbside garbage pickup, but the owners of the 69 unit building argue that 69 garbage cans in front of the building twice per week would be a logistical and health nightmare.  This situation shows that both associations and many municipalities are unaware of the requirements of the MSA, the rights that it affords to homeowners and the municipalities responsibilities thereunder. Associations and homeowners in this situation should be fully aware of their rights under the MSA and have the option of suing the town to force the municipality to either provide services or a reimbursement.

The court found that from a contractual standpoint, such an agreement could never be enforceable.  The developer created the association after the governing documents were drafted, and also controlled the association until the unit owners were elected to the board.  Given the fact that the Association did not exist at the time the "contract" was made, and that the developer was essentially contracting with itself, the court refused to enforce the arbitration clause.  The association's lawsuit was permitted to continue to recover damages to the association for various construction defects and deficiencies. 

The Association notified both its general liability carrier as well as its directors and officers carrier ("D&O") of the claim.  The liability carrier accepted defense of the Association but the D&O carrier denied defense and indemnity, claiming that the policy contained a "property damage" exclusion.  After a trial and verdict in favor of the Association, the Association filed a declaratory judgment action against the D&O carrier.  The Association argued that the claim is a breach of fiduciary duty, which should result in coverage, regardless of whether or not that breach resulted in some property damage.  Further, the Association argued that nearly every claim against the Association would in some way involve property damage, as maintenance and repair of the common property is the main purpose of the Association. 
 

The 11th Circuit disagreed.  The court stated that the language contained in the exclusion that excluded all coverage for any loss arising out of damage to any property, precluded coverage under this policy because the breaches of the Association's fiduciary duty ultimately caused property damage.  Further, the court rejected the Association's argument that coverage under the D&O policy was illusory, because it would cover claims that did not arise out of property damage, however, limited.  For example, the court referenced claim of slander of title, breach of the covenants, or restraint of trade, that may be covered under a D&O policy as those claims do not arise out of property damage.  As such, the Association's claims against its D&O carrier were dismissed.

Associations are feeling the effects of the recession just like everyone else, and most Associations have at least a few owners who have not paid their dues in several months.  Amazingly enough, some owners have failed to pay their regular dues, but continue to accept rent from tenants who are living in the unit.  The Florida law permits homeowner associations to formally notify renters that their payments should be paid directly to the association, not to a landlord who has failed to pay the organization.  If the tenant is ordered to make a payment to the association, it counts as rent credit. The tenant pays the remaining balance to the landlord and can not be evicted for failure to pay rent. 
 

The process isn't as simple and straightforward in New Jersey, but nonetheless, lawyers in Stark & Stark have successfully argued to the court the inherent unfairness of a unit owner who refuses to pay his maintenance fees, but continues to collect rent from a tenant.  In many of these situations, the court has appointed a "rent receiver", typically the property management company, to accept the rent from the tenant each month, pay the outstanding associations fees, and give any balance of those fees to the unit owner/landlord.  This benefits not only the Association, but the tenant as well, who arguably should not be evicted or foreclosed upon when they are complying with the terms of their lease agreement.  Stark & Stark's New York clients have the benefit of a New York statute which permits the Association to collect rent from tenants, however, if the tenants do not pay, the statute does not give the Association the right to sue the tenant directly, which all but eliminates the Association's ability to enforce the statute.

Recently, a lawsuit related to second hand smoke claims in a condominium setting was decided in Massachusetts.  In Burrage v. DeAngelo, et al., a condominium unit owner sued her neighbor, the condominium association and her real estate agent for causing or allowing a hazardous or noxious activity, namely smoking in an adjacent unit.  All but the agent settled with her before trial.  At trial, the Plaintiff claimed that her real estate agent knew that her neighbor was a smoker, but failed to disclose that to her before closing.  The second hand smoke allegedly exacerbated her asthma, causing her significant personal injuries.  The jury found in favor of the agent in less than an hour, and awarded the Plaintiff nothing.  Obviously, real estate brokers and agents must disclose known hazards such as toxic waste sites, flood or fire danger or local industry that may be considered dangerous.  The question here was whether the agent should have disclosed smoking as a hazard, given that the Plaintiff could have easily determined during any of the visits to the home that either the prior owners or a neighbor was a smoker.  In fact, the Plaintiff specifically asked the realtor about the smoke smell during one of the visits.  The jury here chose not to add another layer of disclosure to already burdened Realtors, and instead charged the Plaintiff with discovering this "hazard" on her own.  It is unknown at this time if the Plaintiff plans on appealing the decision.
 

In Manhattan, two unit owners sued their neighbor for creating a "nuisance" in their luxury Tribeca condominium.  The suit alleges that even though the condominium bylaws permit smoking in the units, "objectionable odors" are prohibited.  Further, the smoking has caused health problems for both unit owners and their young daughter.  Recently, a Manhattan Civil Court Judge permitted the suit to go forward, denying a motion to dismiss by the smoker.
 

In British Colombia, Canada, a smoker moved in below two non-smoking unit owners.  The non-smoking owners, claiming that their health was being affected, appealed to their condominium association to adopt a no-smoking policy.  The association refused, claiming that smoking didn't violate the bylaws, and thus it had no authority to respond to the complaint and force the smoker to stop.   The unit-owners in response are taking a novel approach. They claim that their sensitivity to smoke is a "disability" and the fact that the association failed to accommodate their disability violates Canada's Human Rights Statutes.  The matter is set for a hearing in the next several months and if the non-smokers are victorious, it could force every condominium in Canada to become a non-smoking building, for fear of future litigation.  This will not only preclude smokers from buying condominiums, but will severely impact the Association's ability to sell units, as their pool from which to attract potential buyers would be significantly reduced. 
 

However, this hardly settles the issue of whether condominium associations in New Jersey can be held liable for unit owners participation in a legal activity in the privacy of their own home.  In the absence of a ban on smoking altogether, a condo association has a duty to protect the safety and welfare of its unit owners and to act in best interests of those owners.  It is an open question if that power extends to prohibiting lawful activities that take place within the four walls of a unit.  The Association may only have to provide alternative dispute resolution to the two owners in order to comply with the New Jersey Condominium Act and the Planned Real Estate Development Full Disclosure Act (PREDFDA), but no New Jersey court has decided this issue as of the date of this article.

Assemblyman Peter Biondi introduced a bill in January 2010 in which he stated that with the quasi governmental powers provided to associations should come standards of "fairness and due process."  The bill provides that associations should be held to similar standards of transparency and fairness.

As to the bidding requirements, Assemblyman Biondi is proposing to enact rules which would force associations to:
 

1. Obtain three quotes for any contract for services or materials whenever the amount payable by the association is over $10,000 in any 12 month period.
2. Use sealed bids with required specifications , to be opened only a publicly announced meeting for any contract that exceeds $25,000.
3. Award all contracts to the vendor that provided the lowest quote or bid, unless the board determines, for good cause, that accepting the bid would be detrimental to the best interests of the residents. 

Interestingly, any association with fewer than 30 units can, by resolution, waive any of these provisions. 

 

Although community associations are similar in many ways to government, the last thing any association wants to do is model itself after any level of government.  Government agencies are often marred by corruption, red tape, cost overruns and unnecessary levels of bureaucracy; things that most associations in New Jersey try to avoid.  On its face, obtaining three bids sounds like a reasonable and prudent business practice.  However, Board members are entirely capable of determining how many bids to obtain for a particular project or service, and obtaining three is hardly a panacea for problems that result from hiring the wrong contractor.  Moreover, obtaining three quotes may be impossible, for example, for an association that pursuant to the master deed must hire a property management company within 5 miles of the association, and only 2 fit that description.

 

However, when you get to section 3, the real problem is revealed.  Forcing associations to hire the cheapest vendor guarantees problems.  The old axiom, "you get what you pay for" has proven true over and over again.  Think about how well this formula has worked for the government.  The least expensive contractor has given us shoddily built schools, bridges and government buildings.  Why should associations model this behavior?  In fact, some governments have completely scrapped this program.  New York City and Camden both ended their lowest bidder programs (allowing for consideration of experience, completeness of the quotation, references, etc.) with shocking results: construction quality got better. 

 

If an individual association wants to enact such a rule, it is obviously free to do so, but the mechanism to prevent problems is already in place.  First, the governing documents of many associations require the approval of 2/3 of the homeowners to approve assessments related to work in a certain dollar amount.  Second, the system of goverenence itself ensures that if the Board makes a habit of hiring the first contractor to provide a bid, or is hiring friends and relatives who do shoddy work, then the unit owners have the right to vote them out of office during the next election.  Like most legislation, this proposed law is likely a reaction to one or two troublesome boards who made poor decisions, prompting an Assemblyman to react in such a way that will saddle all associations with unnecessary requirements which are likely to cause more problems than they cure.

As for dealing with conflicts of interest, Assemblyman Biondi is proposing that:

1. No member of the board or management can have an interest in any business which is in conflict with the proper discharge of their duties, including having a direct interest in any contracts for work or materials used by the association or any fees paid to a broker, architect, etc.;
2. No board members or managers can use their position to obtain any unwarranted privileges for any person;
3. No board members or managers can act in his or her capacity in any matter in which he or she, a related person, or any other person residing in his or her household or the household of a related person, or any business organization in which any of such persons has an interest, has a direct or indirect financial or personal involvement that might reasonably be expected to impair the objectivity or independence of judgment of the board member, employee or property manager.
    

Like most legislation, these may be obvious and proper rules to have.... until they are applied to the real world.  As with any law or rule, there are always unintended consequences.  If a Board Member's brother owns a painting business and can do a quality job for 15% less than the competition, shouldn't the Association be permitted to hire that person, provided the Board Member in question discloses this fact to his fellow board members?  Arguably, under section 3 of the proposed legislation, the board wouldn't even be permitted to consider hiring this contractor.  But under the existing Nonprofit Corporations Act, which applies to associations, such a contract would not be void solely due to the fact that a trustee has an interest in the contract or transaction, as long as the interest is fully disclosed to the entire board before they vote on the issue. N.J.S.A. 15A:6-7.  The proposed legislation would obviously conflict with the Nonprofit Corporations Act, causing further confusion for board members and homeowners. 
 

The legislature is trying to get boards and associations to act in a proper and more efficient manner, but the real way to accomplish this is to become active in your association.  Vote, attend meetings, provide feedback and be involved.  If the majority of unit owners are involved in the process, then the Board will be responsible for their decisions, they will consider multiple points of view and incompetent or untrustworthy board members will be voted out of office.   That way, each Association can make decisions that best fit their particular situation and are less likely to have unnecessary rules forced upon them.

In 2008 Senator Christopher Bateman sponsored a bill (S-759) that would certify Community Association Managers (anyone managing a condo, co-op or homeowners association), and would require anyone in the business of property management for common interest communities to be certified under standards created by the Department of Community Affairs consistent with already existing national standards.  The bill would not require certification, but would prohibit those without the certification from holding themselves out as being "certified" in the field of property management. The act would also require all Associations in New Jersey to hire only certified managers, and would require that the contract between the Association and the manager include the insurance, bonding and certification requirements.

 
The two year certification would require a mix of schooling and experience, and would then require that the applicant pass a written examination. Each certified manger would have to be bonded in the amount of $3,000. 

 
The requirements of the training and exam are likely to be similar to the National Board of Certification for Community Association Managers (NBC-CAM) which has created a certification for community association property managers.  This certification requires classroom study and an exam involving subjects such as governance and legal matters, budgets, reserves and assessments, risk management and insurance, maintenance, contracting and human resource management.  This certification, while obviously not a guarantee of superior service or compliance with each and every standard, at least sets a minium standard for those who enter this field. The certification also requires that managers:

• Be knowledgeable, act, and encourage clients to act in accordance with any and all federal, state, and local laws applicable to community association management and operations.
• Be knowledgeable, comply and encourage clients to comply with the applicable governing documents, policies and procedures of the Client Association(s) to the extent permitted by that Client.
• Not knowingly misrepresent materials facts, make inaccurate statements or act in any fraudulent manner while representing Client Association(s) or acting as a CMCA.
• Not provide legal advice to Client Association(s) or any of its members, or otherwise engage in the unlicenced practice of law.
• Promptly disclose to Client Association(s) any actual or potential conflicts of interest that may involve the manager.
• Refuse to accept any form of gratuity or other remuneration from individuals or companies that could be viewed as an improper inducement to influence the manager.
• Participate in continuing professional education and satisfy all requirements to maintain the certification.

Manager certification has been an issue since at least 1999 when the Assembly Local Government and Housing Committee discussed the pros and cons of such a certification, related to the proposed Uniform Common Interest Ownership Act. The current bill is presently being debated in committee, and mirrors a similar bill introduced by then Assemblyman Bateman in 2006.  The 2006 bill was abandoned before being put up to a vote of the Assembly.  However, now more than ever, this certification may be a necessary step in the field of community management.  There are new and larger associations cropping up across New Jersey, and more and more management companies being created to service these companies, some of which have no experience with condominiums, townhouses or cooperatives.  While obviously not a panacea, it would be extremely helpful to give the Board of Trustees a comfort level that the manager they wish to hire has studied specific issues and subjects that will enhance their ability to serve the community.  This is essential for volunteer, part-time Board Members who are often times unable to separate the good from the bad in the ever growing property management world.  It may also allow the quality CAPM's out there to further distinguish themselves from those who do not fully understand the full breadth of their position, or who are unable to properly service their community.

The connection between moldy houses and a particular physical ailment is a difficult one to make.  Mold is everywhere.  And while it is possible for some growths of mold to cause temporary damage to an allergic person, there is little if any proof that exposure to a certain type of mold will cause specific symptoms in anyone.  The effects of mold exposure differ from person to person.  In fact, the Centers for Disease Control web site states that:

Mold exposure does not always present a health problem indoors. However some people are sensitive to molds. These people may experience symptoms such as nasal stuffiness, eye irritation, wheezing, or skin irritation when exposed to molds. Some people may have more severe reactions to molds. Severe reactions may occur among workers exposed to large amounts of molds in occupational settings, such as farmers working around moldy hay. Severe reactions may include fever and shortness of breath. Immunocompromised persons and persons with chronic lung diseases like COPD are at increased risk for opportunistic infections and may develop fungal infections in their lungs.

Everyone knows that placing your hand over a flame will cause a burn.  Not even the scientists at the CDC know if the mold in your house or workplace will harm you. There are no recognized standards for the amount of mold that will cause symptoms, or the length of time you need to be exposed to certain mold to be injured.  Most people who have mold allergies stay away from hay, potpourri and indoor plants.  If they are exposed to mold they may have sneezing, coughing and breathing problems, but those go away as soon as they leave the horse stable or their grandparent's house.  These pesky facts however, have not precluded industrious lawyers and plaintiffs from filing numerous questionable "toxic mold" lawsuits.  Lawsuits based on the "I know it’s true" platform are being filed all the time, accompanied by "I'm a doctor and I'm pretty sure the Plaintiff was injured based on what they told me and that article I read last week" medical reports as proof.

Despite the fact that the CDC is unable to nail down a cause and effect relationship between mold and physical ailments, jurors around the country are asked every day to do just that.  They have become the means by which the courts differentiate the junk science from the real science.  This disturbing trend is, in part, a result of judges abdicating their responsibilities as expert witness gate keepers.  Increasingly, courts are allowing experts to testify, regardless of how they come to their conclusions, their level of mold related illness experience, or the plausibility of their conclusions.  The playoff football, "let them decide it on the field", approach is one that is leaving the final decisions to jurors, who inevitably bring their own "knowledge" to the courtroom.  Regardless of what "School House Rock" says, knowledge is not always power.  Sometimes "knowledge" isn't even accurate.  Take this example: 

Mr. Jones sues ABC Apartments for keeping his apartment too cold which, he claims, resulted in him having a runny nose, cough and that "achy feeling".  Mr. Jones produces a report from his family doctor that says "Mr. Jones told me it was cold in his apartment in November, so given the fact that his symptoms started in November, I believe that the low temperature caused his cold.  In addition, when he warmed up at his friend's house, the symptoms seemed to go away."  The doctor doesn't specify how cold is cold enough to make someone sick, nor does she account for the person sneezing in the cubicle next to Mr. Jones at work, or the fact that Mr. Jones had 3 colds before moving into ABC Apartments, or that during the 3 weeks between his first and second visit to the doctor, when he got better, Mr. Jones ate 37 oranges. 

ABC Apartments asks the judge to throw out this claim, because the Plaintiff can't show that A) it was too cold in the apartment because they can't define "too cold", B) if it was "too cold", that the temperature caused Mr. Jones to actually catch a cold, or that C) he didn't catch the cold from his cubicle-mate, or that D) the vitamin C in the oranges cleared up the cold, not the fact that he went to a warmer apartment.  The court denies ABC's request, saying that there is a sufficient basis for the report, and that ABC is free to beat up (verbally of course) the expert during cross examination and convince the jury that the doctor has no idea what she's talking about. 

This seems to be a reasonable decision, until my Mom is picked to sit on the jury.  As soon as my Mom hears that it was cold in the apartment, and that he has a cold, her mind would be made up.  As sure as the sun comes up in the morning, being cold gives you a cold.  There is no disagreement, believe me.  It doesn't matter if ABC produces the President of the Hot and Cold Association of America to testify that they took the temperature in the apartment, and its 59 degrees.  And while that might be mildly chilly, it’s definitely not cold, and besides, being mildly chilly doesn't cause any sort of illness.  There has been no such proof ever produced.  In my Mom's head, however, that Plaintiff wins 10 times out of 10.  Case closed.  The question then is, shouldn't the court have excluded this testimony to prevent my Mom from using what she "knows" to be true, even if there was no real causal connection?  Shouldn't the court know better than to allow an expert to testify that will at best confuse a jury and at worst confirm inaccurate "common knowledge".

The New Jersey Appellate Division thinks not.  In an unpublished opinion, the court recently permitted a case to go forward where a tenant claimed to have been injured by exposure to toxic mold.  In Smith v. Northridge at Edison, the Plaintiff's doctor, relying on the Plaintiff's explanation of the facts as she believed them to be, submitted a report that said essentially because the water intrusion and mold growth occurred at the same time as her symptoms, and because her symptoms seemed to diminish when she left the apartment, she was obviously damaged by the mold in the apartment.  The doctor claimed that the temporal similarities led him to believe that her condition was caused by the "harmful conditions present in her residence."  The doctor had never visited the apartment and did no testing or investigation of the types of contaminants present in the apartment.  The trial court dismissed the plaintiff's claims, finding that the doctors lack of specificity as to the type of mold spores, the lack of objective testing on the plaintiff, and the failure to identify that it was even mold in the apartment was fatal to the doctor's ability to testify.  There was no way to tell what the plaintiff thought was mold, actually was mold, and that whatever it was that was found type of mold caused the symptoms experienced by the plaintiff.

The Appellate Division, however, found that the temporal evidence (the fact that the "mold" apparently grew around the same time as the symptoms occurred and that the symptoms subsided when she left the apartment) and the plaintiff’s positive response to treatment, was sufficient to permit the doctor to testify at trial. The matter was remanded back to the trial court for further proceedings, which means a trial will eventually be held to determine the outcome of the case.  No word whether or not my Mom has been called for jury duty.

This case is an example of the courts increasing unwillingness to dismiss marginal claims or thinly based expert opinions.  Much like the criminal justice system would rather a guilty man go free than put an innocent man behind bars, the civil courts would rather permit a marginal claim to proceed, than dismiss even a slightly meritorious claim.  Americans should have their day in court.  Recent cases on toxic mold personal injury cases are a clear example of this philosophy.  The problem is that the pendulum has swung too far in favor of allowing almost any doctor to testify as to causation of mold personal injuries, mostly based on what they have been told by their patient, and permitting jurors to ignore the science in favor of what they think they know about mold and its health effects.  Courts need to take into account the possibility of an erroneous jury decision based on facts not in evidence, and the implicit message they send to jurors when allowing a doctor to testify on matters on which they have only slightly more experience than do the jurors.  Judges need to be the gatekeepers and the Appellate Division needs to support their effort.

The dispute seems to stem from an interpretation of documents, although in the opinion of the property owner, there is no ambiguity and no resident will be asked to leave.  It seems as if in this case, as is bound to occur when a property or Association falls under multiple jurisdictions, that the various levels of government bureaucracy can not communicate sufficiently to provide a simple answer to whether or not residents are permitted to live year-round in the facility, and whether the property owner has a right to dictate otherwise.  It will be interesting to follow the results of this case, as there are many Associations across New Jersey that may or may not be incorporated, or officially recognized as a Homeowner's Association, and may not know under which agency's jurisdiction they fall under. 

If a unit fails inspection, it cannot be occupied until it passes. If it’s already occupied at the time of inspection, then the owner has 30 days from that time to make repairs or corrections. An owner of a rental may get another five days to make repairs after re-inspection within the 30-day period.  Of interest to condominium owners who rent their units, each condo unit will be considered a separate rental, which will require a separate inspection.  However, a valid inspection from the Department of Community Affairs, which inspects condominiums and multiple dwellings every 5 years to ensure compliance with the construction, housing and fire codes, will satisfy the license requirements, at least for the year that the DCA inspects the condo.  Check with your local municipal offices to see if there are similar requirements for renting your condominium unit or house.

The general contractor, not surprisingly, has attempted to place blame with the Township inspectors, who should have caught its inferior work during their routine inspections.  However, the general contractor knows full well that the responsibility of the Township inspectors is extremely limited, and they are surely not responsible for ensuring that the architectural plans or specifications are followed.  They are merely there to make a cursory review of the property and ensure that the work meets very minium requirements for safety.  They do not ensure quality workmanship.  That job, pursuant to the building code, is the general contractor's alone.  Their reliance on the Township inspectors is a transparent attempt to deflect the blame to someone else.  
 

The association has learned a difficult lesson that many across New Jersey have learned the hard way.  Because it chose to file a claim under the New Home Warranty Program, its fate is no longer in its own hands.  The DCA will decide on the scope of the repair, who does that repair and the cost at which the repair will be done.  The association has little, if any, input going forward.  If the association is not satisfied with the repairs suggested or eventually conducted, they are unable to appeal the decision in court.  Once a person or association files a claim under the New Home Warranty Program, they are prohibited from suing any of the parties responsible for those defects in New Jersey Superior Court.  The decision of the DCA (or the warranty company) is final and more often than not, the program favors builders and contractors over the homeowners.
 

Associations from Cape May to Bergen County, should be aware of their rights before filing a claim with the New Home Warranty Program.  In order to make a fully informed decision, the association should contact an attorney who is versed in the practice of construction in New Jersey and who knows condominium and homeowners association rules and regulations. For example, under the statute of repose in New Jersey, homeowners and condominium associations generally have 10 years from the date that construction is completed to sue the general contractor and its subcontractors for damages related to the construction.  Often times, depending on the type of damage that the association has incurred, the contractor's insurance policies can be source of recovery for the association.  This may provide a more complete recovery, a more favorable result for the association, and it will certainly provide the association more control over its destiny then they will receive by putting its fate in the hands of government officials who may not be completely interested in obtaining the most favorable result for the association. 

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 most, if not all condominiums the roofs are designated as common elements or common property.  Therefore, the decision to install solar collectors on the roof of a condominium would have to be made solely by the condominium association’s. 

As discussed in several Superior Court opinions, the New Home Warranty Program is ineffectual at best and is rarely an advisable option. Therefore, homeowners and condominium associations are often times forced to sue the developer of their property in an effort to obtain money for necessary repairs. Unfortunately, it often happens that home builders and condominium developers create a corporation or limited liability company for a specific project. The company is minimally funded, and it hires only independent subcontractors. The company is then shut down when the project is completed. A judgment against this company would be completely worthless. In other instances, if a project is not particularly profitable, the developer company may file for bankruptcy protection and whatever limited assets it has would be disbursed to the various creditors. In these situations, if the homeowner or association discovers defects in the construction after several years, there would be no source of recovery. The warranty program provides almost no assistance, and suing a defunct corporation is a waste of time. Therefore, the homeowner or association would be stuck paying for costly repairs. However, if the developer had general liability insurance in place during the project, those insurance policies could provide coverage for the construction defects. Unfortunately, in New Jersey and many other states, builders are permitted to develop land and build homes with minimal or no insurance in place.

In order to prevent these problems and protect new homeowners, the Nevada Assembly has proposed a bill that would require all licensed contractors to carry liability insurance. The bill would require all contractors to carry between $300,000 and $3 million worth of insurance, depending upon the size of the contract. According to the bill's sponsor, Majority Leader John Oceguera, this would protect homeowners from having to sue and/or negotiate with shell companies that are no longer in business, or companies that have filed for bankruptcy protection. Not surprisingly, the Associated General Contractors organization in Nevada objects to the proposed requirement, claiming that insurance is an expensive product, that it would put a significant burden on the contractors and that the cost would be passed directly to the homeowners. The bill has not yet passed, and faces strong opposition as well as a competing bill from the Nevada Senate.

In the last several years, the New Jersey legislature sought fit to require home improvement contractors to carry liability insurance, but has thus far not applied such a requirement to new home builders and developers of cooperatives and condominiums. We will continue to monitor the situation, and update our readers in the event that additional information becomes available.