Recent Blog Posts

    • Fate and Fortune: Unauthorized Acts of the Board Cannot Be Challenged by Non-Owner Third Parties but Can Be Retroactively Cured by the Membership In a decision that has renewed the faith of condominium law practitioners in our state’s judicial system, the New Jersey Appellate Division recently issued a strongly worded opinion in Port Liberte II Condo. Ass'n v. New Liberty Residential Urban Renewal Co. et. al., 2014 N.J. Super. LEXIS 19 (App. Div. Jan. 21, 2014) (approved for publication on January 31, 2014), that has prevented a grave injustice and allowed unit owners to control their own fates by having the power to validate unauthorized decisions of the board. In what has been exclaimed as a “big win” for condominium associations and unit owners, the Appellate Division has determined that a condominium board’s decision to file suit without taking a pre-litigation vote, required by the association’s bylaws, can be affirmed at a later time by the membership and cannot be challenged by the defendants. Designed to protect the financial interests of the unit owners, the bylaws cannot be used by defendant developers and contractors ....
    • Creative Collection Solutions: The Rewards and Challenges of Rent Receivership Every day condominium associations battle delinquencies and employ creative strategies for collecting unpaid assessments. Sometimes ambitious collection efforts are successful – sometimes not. One aggressive strategy employed by associations is the appointment of a rent receivership for a vacated or abandoned unit owned by a delinquent owner. If successful, a receivership would entitle the association to collect rent for a unit it technically does not own and apply the monies received towards the owed arrearage. While the concept sounds good in theory, it is actually quite difficult to accomplish in practice given the likely upside down mortgage on the property, the inevitable foreclosure proceedings by the bank, and the fact that abandoned units are not occupied by paying tenants. All those dissuading factors, however, did not stop one association from trying. Faced with over $30,000 of unpaid maintenance dues for two abandoned units, Woodlake at King’s Grant Condominium Association, ....
    • Cracking the Paradox: Complying with the Statute of Limitations in Construction Defect Cases In early April, a Bergen County judge dismissed a construction defect complaint filed by a mammoth 40-story condominium complex known as the Palisades, located along the Hudson River in Fort Lee, based on the statute of limitations. While dismissal for filing suit outside the statute of limitations is nothing new or surprising, the way in which the judge reached that conclusion and applied the “law” is. According to Judge Robert C. Wilson, the six-year statute of limitations begins to run upon “substantial completion,” is not subject to the discovery rule, and is not tolled until the association is created and subsequently controlled by the homeowners. Not only does this decision render the ten-year statute of repose meaningless, it unduly prejudices the rights of condominium associations whose legislatively granted six-year window to file suit can seemingly be judicially dwindled down to two years or one year or less. ....
    • Class Recourse for Individual Home Owners Suffering from Construction Defects Until now, owners of single-family homes were left to their own devices and resources in seeking redress for construction defects. Class suits were thought to be unavailable to homeowners despite their homes having been built by the same builder and suffering from the same general defects. The differences in subcontractors used, methods of construction, location of defects, time built and nature of resulting damages defeated class certification and deterred law firms from bringing class action lawsuits alleging construction defects. The economics of bringing an individual construction defect suit weighed heavily against litigation and, as a result, homeowners ended up either living with the defects or paying for repairs out of pocket. Fortunately for homeowners, a recent decision from the Appellate Division captioned D’Andrea v. Hovnanian, 2013 N.J. Super. Unpub. LEXIS 1484 (App. Div. June 18, 2013) has changed that landscape. According to the Appellate Division, the four prerequisites ....
    • Condominium Association Gets Big Win Against Developer for Consumer Fraud In late 1998 Monroe Station Associates started construction on the Belmont, a seven-story, thirty-four unit condominium building in Hoboken, New Jersey. Monroe Station served as the sponsor, developer, and general contractor of the Belmont. Prior to completing construction, Monroe Station filed a Public Offering Statement (“POS”), which stated that there were no known defects in the common elements of the Belmont building that a prospective purchaser could not determine by a reasonable inspection. Attached to the POS were certain marketing materials, which provided that the potential buyers would be getting a “Proven Developer and Construction Management Team which has overseen the building and renovation of over 400 Single Family & Condominium Homes, and over 1,000,000 Sq. Ft. of Office/Commercial/Retail Development.” ....
    • A Breakthrough in the Law Gives Similarly Situated Individual Home Owners Suffering from Construction Defects Class Recourse Until now, owners of single-family homes were left to their own devices and resources in seeking redress for construction defects. Class suits were thought to be unavailable to homeowners despite their homes having been built by the same builder and suffering from the same general defects. The differences in subcontractors used, methods of construction, location of defects, time built and nature of resulting damages defeated class certification and deterred law firms from bringing class action lawsuits alleging construction defects. The economics of bringing an individual construction defect suit weighed heavily against litigation and, as a result, homeowners ended up either living with the defects or paying for repairs out of pocket. ....
    • Are Condominium Unit Owners Unconditionally Obligated to Pay Common Expense Assessments? The short answer is – Yes! The Condominium Act specifically obligates all unit owners to pay a proportionate share of the common expenses. Even where a unit owner waives the right to use a common element or abandons the unit there is no exemption from liability for common expenses. The Condominium Act, N.J.S.A. 46:8B-1 to -38, provides in pertinent part: A unit owner, shall by acceptance of title, be conclusively presumed to have agreed to pay his proportionate share of common expenses accruing while he is the owner of a unit. . . . No unit owner may exempt himself from liability for his share of common expenses by waiver of the enjoyment of the right to use any of the common elements or abandonment of his unit or otherwise . . . [N.J.S.A. 46:8B-17.] The “or otherwise” language implies that the obligation of unit owners to pay the proportionate share of the common expense is absolute and does not yield to other considerations, such as disputes with the Association. See Holbert v. Great ....
    • Recovering Damages Under the Statute of Repose Under the statute of repose, no action to recover damages for any deficiency in the design, planning, surveying, supervision or construction of an improvement to real property may be brought more than ten (10) years after the performance of “such services and construction.” N.J.S.A. § 2A:14-1.1. Essentially, the statute of repose provides that an injury occurring more than ten years after completion of improvements to real property does not give rise to a cause of action at all. The New Jersey Supreme Court has held that the ten-year statute of repose for bringing an action against a contractor or an architect begins to run as of “substantial completion” of the real property. Russo Farms v. Vineland Bd. of Educ., 144 N.J. 84, 117 (1996). The Court defined “substantial completion” as the date when construction is sufficiently complete so that an owner can occupy or utilize the building. Therefore, generally when the architect certifies as much to the owner and a Certificate of Occupancy ....
    • How Does Equitable Tolling Affect the Running of the Statute of Limitations? The doctrine of equitable estoppel prevents a defendant from asserting the statute of limitations as a defense when the defendant has engaged in conduct that was calculated to mislead the plaintiff into believing that it was unnecessary to file suit. Thus, our courts have recognized that equitable estoppel may be appropriate where a defendant has lulled plaintiff into a false sense of security by representing that a claim will be amicably settled or resolved without the necessity for litigation. Such is the case when an association is engaged in settlement discussions with a developer and the developer promises to repair all identified defects and water intrusion issues in the community. The important caveat regarding equitable tolling is that if, after the cessation of any basis for continued reliance by a plaintiff on the conduct of a defendant, there remains a reasonable time under the applicable limitations period to commence a cause of action, the action will be barred if not ....
    • How Transition Affects the Statute of Limitations Analysis The novel nature of condominium ownership, specifically the transition process, affects the statute of limitations analysis. The Planned Real Estate Development Full Disclosure Act requires that the developer of a condominium staff the board of trustees of an association and control the affairs of the association until seventy-five percent of the units in the development are sold. During that period of control, the developer is under a fiduciary responsibility to the association to act in the best interest of the association and its membership. Pragmatically speaking, however, a developer-controlled association is much different than a homeowner controlled association. Even if certain problems with construction are discovered during developer-control, it cannot be realistically expected that the developer-controlled board would take steps to investigate those defects and litigate, on behalf of the association, if necessary. Therefore, equity and common sense suggest that the earliest ....
    • How the Discovery Rule Affects the Statute of Limitations In New Jersey, construction defect claims are subject to a six-year statute of limitations, N.J.S.A. 2A:14-1, which is subject to the discovery rule, and a separate ten-year statute of absolute repose, N.J.S.A. 2A:14-1.1, after which potential causes of action no longer exist. Under New Jersey’s discovery rule, the accrual of a cause of action is deferred until the injured person knows or should know that he has sustained an injury and knows or should know that an injury of which he is aware is attributable to the fault of another person. The discovery rule is an equitable principle by which an accrual of a cause of action is delayed until the injured party discovers, or by the exercise of reasonable diligence and intelligence, should have discovered, that he may have a basis for an actionable claim. Once the injured party knows that it has been injured and that the injury is the fault of another, it has the requisite knowledge for the period of limitations to commence running. Put ....
    • Difference Between Statute of Limitations and Statute of Repose Statutes of repose and limitations establish different types of deadlines for the assertion of claims. Statutes of repose begin to run at an identifiable time or event and allow a claim to be filed for a specific amount of time after that event has occurred. After the expiration of the repose period, no claim will be deemed to have accrued and none may be filed. A statute of repose does not function to bar an existing cause of action; rather, it prevents what might otherwise be a cause of action from ever arising. Statutes of limitations, on the other hand, commence at the time a claim accrues and run for a specified amount of time. After a claim accrues, the statute of limitations begins to run and an action may be filed until the end of the limitations period or the end of the repose period, whichever comes first. New Jersey follows the discovery rule, which tolls the running of the statute of limitations until the time when plaintiff has or reasonable should have knowledge of injury ....
    • How Can Homeowners Protect Themselves When Hiring Contractors for Home Improvements? All too often homeowners engage a contractor to perform certain home improvements and/or maintenance functions and end up in a fight with the contractor either over the work or amount of payment or both.  Recognizing the disparity in leverage and technical knowledge, the Legislature and the New Jersey Division of Community Affairs have promulgated laws and regulations designed to give homeowners powerful rights to protect them when they undertake maintenance and improvement projects.  With these enactments, the onus is placed where it belongs, on the shoulders of the home improvement contracts to insure they act fairly and honestly when performing projects that affect a person’s home.   Deception, fraud and misrepresentation are not tolerated.  Every home improvement contractor doing business in New Jersey is obligated to comply with New Jersey law, even if they are not aware of the law’s requirements.  The Consumer Fraud Act and the Home ....
    • Construction Defect Plaintiffs: Be Aware of the Statute of Repose Gene Markin, member of Stark & Stark’s Construction Litigation Group, authored the article, Construction Defect Plaintiffs: Be Aware of the Statute of Repose, for the March 19, 2012 edition of the New Jersey Law Journal. The article discusses the fact that in New Jersey, litigations need to be aware of the “statue of repose” in addition to the statue of limitations. Mr. Markin states that statute of repose issues will most commonly arise in the area of construction defect litigation, when a lawsuit is filed more than 10 years after the construction of a building. You can read the full article online here. (PDF) ....
    • Buyer Beware of Defects in New Construction Gene Markin, member of Stark & Stark’s Construction Litigation Group, authored the article, Buyer Beware of Defects in New Construction, for the January 30, 2012 edition of the New Jersey Law Journal. The article discusses why the remedy under the homeowner warranty program, may not be a remedy at all. In the article, Mr. Markin states, “Since its inception, the New Jersey Home Warranty and Builders’ Registration Act, N.J.S.A. 46:3B-1 to -20, has proven to be more of a trap for new homeowners than the safety net it was purported to be. The purpose of the act is to establish a program requir¬ing that newly constructed homes con¬form to certain construction and quality standards, as well as to provide buyers of new homes with insurance-backed warranty protection in the event such standards are not met. While the intent of the act is to provide homeowners with a prompt, convenient and cost-saving means of resolving disputes con¬cerning construction defects, in reality, its effect has ....
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