Mary W. Barrett - New Jersey Law Blog

Practical ADR for Practical Associations

Mary W. Barrett — Wed, 09 Feb 2011 08:19:24 -0500

The below article is a re-print of an article which was previously published in the June 2010 issue of Community Trends Magazine.

The scenarios are predictable and common. Faced with a request for alternate dispute resolution (“ADR”), the association’s property manager digs up the ADR policy to find it is full of legal terms and confusing procedures. Often times, the ADR committee members do not know how to start or what is expected, and the property manager can spend hours preparing the ADR committee (the members of which will likely change before the next hearing). A call goes out to the Association’s legal counsel to guide them through the process. Scared of the procedures, both sides “lawyer up” and might as well be in litigation. In all of these cases, ADR is an annoying, time-wasting, costly enterprise for the Association and, too often, a disappointment for the homeowner involved because it elevates the dispute and polarizes the parties. It is time for community associations to implement practical ADR. If they do, they will find the ADR process much less painful, both financially and emotionally.

What is Practical ADR?
Practical ADR is a policy of dispute resolution that is easy, economical, and efficient. It is a common sense way to address disputes. It empowers the parties to participate in finding solutions to an issue instead of battling it out to find an ultimate winner. Practical ADR in community associations means do-it-yourself mediation.

There are two basic types of ADR. Mediation is a process in which a neutral third party, with no power to impose a decision, helps disputing parties to reach an agreement. (See Black’s Law Dictionary.) Arbitration, on the other hand, is a process which also uses a neutral third party but this third party, an arbitrator, has the power to render a decision after a hearing. (Id.) Both mediation and arbitration can be used for any type of dispute: from the very complex to the most basic. But simple mediation best meets the needs of community associations by providing a quick and easy process that focuses, not on establishing who is right and wrong, but on how to resolve differences. Ultimately, this is what the law requires.

New Jersey Law Requires ADR
The law in New Jersey is simple. Community associations are required to “provide a fair and efficient procedure for the resolution of disputes between individual unit owners and the association, and between unit owners, which shall be readily available as an alternative to litigation.” N.J.S.A. 45:22A-44(c); N.J.A.C. 5:26-8.2(c). The New Jersey Condominium Act (“Condo Act”) has a similar requirement. (See, N.J.S.A. 46:8B-14(k).) The Condo Act also prohibits board members from serving as a mediator or arbitrator by stating: “A person other than an officer of the association, a member of the governing board or a unit owner involved in the dispute shall be made available to resolve the dispute.” N.J.S.A. 46:8B-14(k). This prohibition constitutes a basic aspect of fundamental fairness and should be adhered to by all community associations, not just condominiums.

Because New Jersey law does not require any specific procedure for ADR, community associations should simply ensure they provide a fair process which also meets the requirements of the association’s governing documents.

The Association’s Governing Documents May Have Specific ADR Requirements.
The governing documents for most community associations do not address ADR except to say that it must be provided. In recent years, certain sponsors have been more specific with regard to ADR policies. These sponsors, and their lawyers, may believe highly detailed ADR policies help community associations or protect homeowners; more often than not, they are a burden that increase costs to all and help nobody. When the bylaws are very specific, practical ADR may not be possible without an amendment. Fortunately, homeowners are likely to see the benefit of a well written practical ADR policy.

Implementing Practical ADR
The first step in implementing practical ADR is to make a fresh start: with your attorney’s approval, toss out your association’s existing ADR policy. The second step is to review the association’s governing documents to determine what specific processes are absolutely required, if any. The third step is to develop a fundamentally fair policy utilizing simple mediation that adheres to the association’s obligations under the law and the governing documents.

Dos and Don’ts of Practical ADR
DO understand what the law and the association’s governing documents require. The ADR policy must be formed around those basic requirements. Use these as a framework.

DON’T adopt a policy you do not understand and cannot reasonably follow.

DO have a clear, simple, written policy. The ADR policy should describe notice and scheduling requirements, the hearing process, and what happens when the hearing is completed. If, after an ADR hearing, you find the process is deficient in some way, revise the policy.

DON’T let the lawyers litigate during ADR. While a homeowner should be entitled to have a lawyer at his side during the ADR hearing, and the Association may want to do the same, the lawyers should allow the parties to mediate the dispute.

DO keep the association’s lawyers informed. While an association’s lawyers should always be kept informed about disputes, the lawyers need not be involved in every single ADR hearing.
Disputes involving serious legal issues like housing discrimination, handicapped parking or access, violent or criminal acts, and threats of litigation should always be vetted by legal counsel before moving to ADR.

DO consider using the board members as a valuable first step in resolving disputes. While the Condominium Act does limit the participation of officers and board members in the dispute resolution process, the board can serve an important role. Often a disgruntled homeowner will just want to vent or simply does not understand a policy; spending 15 minutes with the board may lead to resolution of the dispute. Such a meeting will not discharge the Association’s obligation to provide ADR, however, so if a meeting with the board does not resolve the problem, ADR will still have to be offered.

DON’T put the homeowners on trial. Using a process with a finder of fact, such as an arbitrator or ADR panel inevitably leads to a mini trial. When a “verdict” is at stake, the focus is on “winning” and not resolving the dispute.

DO focus on resolving the dispute through simple mediation. Each party can present a position and support for that position. The neutral mediator can talk to the parties separately and together and try to find common ground or areas of compromise. If the dispute cannot be resolved after a fair and efficient procedure, the parties simply go their separate ways–sometimes the dispute fades away and sometimes it moves to litigation–but the obligation for ADR will have been properly discharged.

DON’T assume you need a professional mediator; dispute resolution is a fact of life and something we all do every day. Professional mediators are an extremely valuable asset in many situations but they are not necessary for most community association ADR hearings.

DO set time limits and enforce them. Practical ADR for a community association, unless very complicated, should rarely take more than an hour.

DO start implementing practical ADR for your practical association now.

Recent Amendments to the Predatory Towing Prevention Act

Mary W. Barrett — Thu, 18 Mar 2010 08:02:42 -0500

If your New Jersey community association tows vehicles from its private parking areas and roadways, it should be complying with the Predatory Towing Prevention Act (“Act”). Signed into law in October 2007, the Act primarily increases oversight of tow companies but also regulates a private property owner in towing vehicles from the premises without the vehicle owner’s permission. A community association is included in the definition of private property owner and must comply with the Act.

Many of the provisions of the Act as originally enacted were particularly problematic to community associations. The Act was amended in 2009; several changes benefit community associations. Following are the main things you should know before you tow vehicles from privately-owned community association property:

1) The tow company must have a towing contract with the community association.

2) The tow company must be in compliance with the Act

3) Signs must be posted. If you are towing from unassigned parking spaces or other common property these signs must be at least 36 x 36 inches in size, must be conspicuously posted at all vehicle entrances to the property, and must include the following information:

the purpose for which parking is authorized and time during which parking is permitted,
that unauthorized parking is prohibited and unauthorized vehicles will be towed at the owner’s expense,
the name, address, and telephone number of the tow company,
the charges for the towing and storage of vehicles,
the address of the facility where towed vehicles can be redeemed and the time during which vehicles can be redeemed, and
contact information for the Department of Community Affairs.
The signage requirement is simplified if a residential community association is enforcing parking in assigned spaces as long as the parking spaces are clearly marked as assigned and the community association has specifically documented approval authorizing removal of a particular vehicle. The simplified sign required in this case must be posted in a conspicuous place at all vehicular entrances and state that unauthorized parking in an assigned space is prohibited and unauthorized vehicles will be towed at the owner’s expense, and provide a telephone number enabling vehicle owners to immediately obtain information on towed vehicles. The size of the sign is not specified in the Act except that it must be easily seen by the public.
No sign is required if the vehicle to be towed is blocking access to a driveway or garage entrance.
Vehicles must be towed to a secure storage facility located within a reasonable distance from the community association.
A property manager or board member does not need to be present when towing occurs (although the tow company may have its own requirements).

While the Act has been relaxed slightly with regard to community associations, there are still important legal requirements that must be carefully followed. To ensure your community association is in compliance with the Act, you should consult with your legal counsel.

Prohibitions Against Solar Collectors May Be Prohibited in Your Community

Mary W. Barrett — Wed, 06 Jan 2010 08:06:48 -0500

It is common knowledge that exterior modifications in a community association must be approved by the board of trustees. Right? Well, except for certain satellite dish antennas which, by federal law, can be installed on exclusive use areas without pre-approval (Over the Air Reception Devices, (OTARD), 47 C.F.R. Section 1.4000), and United States flags and certain signs of troop support (such as yellow ribbons) all of which may be displayed as long as there is no threat to public safety, necessary maintenance activities can be performed and the property rights of others are not impaired (Planned Real Estate Development Full Disclosure Act (PREDFDA), N.J.S.A. 45:22A-48.1 This New Jersey law also states that flags can be prohibited if they are displayed in a manner inconsistent with the federal flag Code or other laws or guidelines. ). There is another notable exception to that “common knowledge”: solar collectors. Effective August 2007, New Jersey law prohibits a community association from adopting or enforcing any “restriction, covenant, bylaw, rule or regulation prohibiting the installation of solar collectors on certain roofs of dwelling units” (PREDFDA, N.J.S.A. 45:22A-48.2). The law only applies to the roofs of single family dwelling units which are not designated common elements and the roofs of certain types of townhouse units where repair is unit owner’s responsibility. Associations still under developer control are exempt from the law.

While an association may not prohibit the installation of solar collectors on such roofs, it may adopt rules to regulate their installation and maintenance. However, an association is limited to the following installation rules:

The qualifications, certification and insurance requirements of personnel or contractors who may install the solar collectors;
The location where solar collectors may be placed on roofs;
The concealment of solar collectors’ supportive structures, fixtures and piping; and
The color harmonization of solar collectors with the colors of structures or landscaping in the development; and
The aggregate size or coverage or total number of solar collectors

Lest an association attempt to indirectly prevent solar collectors by strict rules, the law clearly prohibits rules in which the effectiveness of the solar collectors are significantly reduced or the cost of installing them is significantly increased. An association may not adopt or enforce any rule which would “increase the solar collectors’ installation or maintenance costs by an amount which is estimated to be greater than 10 percent of the total cost of the initial installation of the solar collectors, including the costs of labor and equipment.” Additionally, none of the rules regulating installation and maintenance of a solar collector on the roofs may inhibit the solar collectors from functioning at their “intended maximum efficiency.”

It is important to understand that not all unit owners may be entitled under this law to install solar collectors. And, while the law does limit rules restricting installations where permitted, an association can and should implement policies for solar collector installation and maintenance. Consulting with the association’s legal counsel is necessary to ensure that policies conform to the law. No matter where you stand on solar collectors, having policies in place will help ensure that your community maintains consistent aesthetic standards.

The Importance of Payment for Common Expenses and Maintenance Fees in Community Associations

Mary W. Barrett — Thu, 17 Jul 2008 08:06:57 -0500

Times are tough all over and those who live in community associations are no exception. When money is tight, some association members make paying their maintenance fees a low priority. This can be a big mistake because, if ignored, a small amount of delinquent maintenance fees can expand into an unexpectedly large debt.


Each member of a community association is responsible for paying his or her share of the common expenses. Common expenses are things like snow removal, swimming pool maintenance, and lawn care. When a member does not pay his share, the other members must pay more to subsidize the delinquent member. In the same way, when the association must pay its legal counsel to collect those delinquent maintenance fees, the other members must pay more to subsidize that cost, as well. Fortunately, the governing documents of most condominium associations, as well as New Jersey law, permit the association to pass on those costs to the person responsible: the delinquent member.


An association member will be given many opportunities to address his delinquent maintenance fees before significant legal costs begin to accrue. The association will first send out reminder letters to the member. After a certain point, if the debt is not paid, the account will be referred to the association’s legal counsel. The attorney will typically send out a collection letter. The amount due in the collection letter will include the total debt plus a small amount of legal fees to review the file, calculate the amounts due, and prepare the letter. If, after 30 days, the member has not paid the account or made arrangements to pay it, further action must be taken such as recording a lien against the unit and filing collection litigation. Each time the association’s legal counsel must perform work to collect the delinquent maintenance fees, the association will charge these fees to the member’s account. Legal fees will continue to accrue against the member’s account until the matter is resolved and all amounts due are paid. Thus, while a member may believe his maintenance fees total only a couple thousand dollars, the legal fees may eventually equal or exceed that amount. The association’s board of directors has an obligation to the association and all of the members who pay their fees each month to see that as much of this amount is recouped as possible.


Accordingly, it is extremely important for an association member to ensure his maintenance fees are paid when due and that if he becomes delinquent that he makes repayment a priority.

Predatory Towing Act

Mary W. Barrett — Mon, 02 Jun 2008 08:32:38 -0500

When a parking war erupted last year between two adjacent restaurants in northern New Jersey, the battle resulted in a law which affects the rights of community associations to tow vehicles from their premises. In October 2007, Governor Corzine signed a new bill into law called the “Predatory Towing Prevention Act” (“Towing Act”) which primarily increases oversight of tow companies. While a law regulating tow companies may not seem relevant to your community association, if you want to tow vehicles from private property areas, it does have implications which could affect your ability to do so.

As expected, the Towing Act mainly regulates what tow companies must do and not do. One provision, however, directly addresses what a private property owner must do before removing a vehicle from its premises without the vehicle owner’s permission. A property owner may only cause removal of a motor vehicle parked on the property if certain signage is posted, the storage facility is a reasonable distance from the property, and the tow company complies with the Towing Act. The Towing Act further requires a tow company to obtain written authorization from the property owner for the tow.

The signage requirement of the Towing Act is burdensome and may be aesthetically undesirable. Signs which are at least 36 inches high and 36 inches wide must be installed “in a conspicuous place at all vehicular entrances to the property which can easily be seen by the public”. The signs must state the following:

The purpose for which parking is authorized and the times during which it is permitted.
That unauthorized parking is prohibited and unauthorized vehicles will be towed at the vehicle owner’s expense.
The name, address, and telephone number of the towing company that will perform the towing.
The charges for the towing and storage.
The street address of the storage facility where towed cars can be redeemed and the times during which the vehicles may be redeemed.

If the required signs are not posted, a property owner may still tow vehicles parked (a) on a lot on which a single family home is located, (b) on a lot on which an owner occupied multi-unit structure of not more than six units is located, or (c) in front of any driveway where the motor vehicle is blocking access to that driveway. While legal arguments could be made that the first two exceptions should exempt many associations from the signage requirements, it is likely a tow company would still require compliance before removing vehicles.

A community association also must provide written authorization and have a representative present in order to get a vehicle towed. The Towing Act requires that a tow company obtain written authorization from the property owner (or its agent) and that the property owner (or agent) be present at the time the vehicle is towed to verify the alleged violation. A general written authorization is permissible for towing done outside of the property owner’s normal business hours or to remove a vehicle which blocks a fire hydrant or entrance to the property. Vehicles must be removed to a storage facility which is a reasonable distance from the property.

The Towing Act does not address the many obvious differences between community associations and a busy mall or restaurant parking lot. Community associations will often have very different reasons for towing vehicles than a retail center. A community association may tow a vehicle if the owner’s membership rights have been suspended for delinquency in the payment of maintenance fees or if a vehicle violates the rules in some way. Community associations also have more opportunities for communicating directly with vehicle owners than businesses serving a transient population and can give unit owners advance written notice of any actions or rules changes. Unit owners, as members of the community association, have the obligation to know and comply with the rules. Despite these differences, the Towing Act as currently written appears to apply to community association and it is not clear how it will ultimately be enforced.

What is clear is that the Towing Act is scheduled to go into effect in October 2008. If your community association uses towing services to remove vehicles from its private property, you will want to discuss the Towing Act with your towing company and ensure that the proper signage is posted. You should also be aware that there may be regulations established by the local municipality which apply to the removal of vehicles from private property. With any vehicle towing policy, legal counsel should always be consulted first to establish proper procedures.