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When a condo owner in arrears on assessments declares bankruptcy, a condo association often expresses concern about the effect of the bankruptcy on its ability to collect pre- and post-bankruptcy assessments.

The bankruptcy code states that fees or assessments that become due and payable after filing for bankruptcy protection are exempt from discharge. Any amounts owed prior to the filing the bankruptcy case are included in the discharge but may be reduced to liens against the property.

Under the New Jersey Condominium Act, NJSA 46:8B-21 (b), a condo association is entitled to a limited priority lien – over previously recorded liens (including mortgages) – for six months of “customary condominium assessments.” This statutory priority ensures that condo associations will be paid for some of the delinquent assessments instead of having their entire lien extinguished in foreclosure sales. Foreclosures often go hand in hand with bankruptcy.

Continue Reading Can a Condo Association Recover Past-Due Amounts After Owner Files Bankruptcy?

Community Association Board of Directors Powers:

As is well understood, Community Association Boards are elected to manage the property, affairs, and business of the Association. The Board has the power to enforce obligations of the unit owners and do what is necessary and proper for the management of the community. This includes enforcing the Association’s Governing Documents. If a violation occurs, the Board generally has the power to assess penalties.

Typical violations concern parking issues, storage of property in common areas, failure to comply with fireplace and dryer vent cleaning requirements, violation of pet restrictions, and similar issues.

Continue Reading Addressing Harassment Issues in Community Associations

A New Jersey Chancery Court was called upon to rule whether the filing of a foreclosure complaint by a condominium association prevents the association from taking other actions to enforce its rules and regulations as they would apply to the defendant in the foreclosure action.

Specifically, a condominium association had started a foreclosure action against an owner, seeking to foreclose its liens. During the pendency of the foreclosure case, the Association decided to enforce its parking revocation policy, as set forth in the association’s Governing Documents. It sought to revoke parking privileges of the owner because of the substantial arrears.

Continue Reading Does a Foreclosure Complaint Prevent a Community Association from Enforcing Rules and Regulations?

A New Jersey trial court has upheld the suspension of parking privileges against a delinquent condominium owner. In this case, the condominium association adopted a Resolution – based on authority from the governing documents – that revoked parking privileges for habitually delinquent unit owners. The unit owner involved failed to pay his common expense fees and had accrued a substantial balance. After notice and an offer of alternative dispute resolution, which was rejected by the unit owner, the Association revoked his parking privileges. Continue Reading Court Upholds Association Revocation of Parking Privileges