Thursday, September 21, 2017

Q&A: Enforcement of Violations


BY: J. DAVID RAMSEY

Q. One resident constantly complains about another resident who is in violation of a HOA rule. As a board we are aware of the violation but allow the situation because of the personal situation involved. We have communicated to the complaining resident we do not wish to discuss why we allow this violation. Do we have to provide an answer?

A.  Very often, seemingly small changes in the facts of a matter can make a significant difference in the correct legal advice.  For instance, your question indicates that a resident is complaining about a violation of a “rule.”  It makes a difference whether the rule is a restriction contained in your HOA’s declaration, or a rule that the governing board adopted.  Generally, the board has a higher duty to enforce the declaration’s restrictions, then it does in connection with its own rules, with respect to which it has greater flexibility. 

Further, you indicate that board would prefer not to aggressively pursue the rule violation because of a personal situation impacting the owner against whom a violation is alleged and you prefer not to divulge the reason for the board’s inaction to the complaining owner.  The nature of the personal situation may be meaningful in providing an answer to your inquiry.  For example, assuming, hypothetically, the rule in question involves a restriction against creating excessive noise, but the resident making the noise needs to have temporary medical equipment that is the cause of the noise.  Depending on all the facts, it may be that the person causing the noise is entitled to an accommodation under the Federal Fair Housing Act.  In such a case the board would be obligated to allow an accommodation in the enforcement of the restriction if it is “reasonable” to do so.  Further, the law concerning making accommodations to people who are disabled prohibits the disclosure of confidential information concerning the disability – although it doesn’t prohibit the board from stating that it is obligated to make an accommodation because there is a claim of disability, without providing details. 

Another example might be that the HOA has a restriction against conducting any business from a home.  Perhaps the owner is out of work and is a professional who can’t afford to rent an office. Therefore, the owner opens her business from her home.  As a result, that owner starts seeing clients from her home and has a secretary working from the house.  In that case, there is no law that protects that activity and the board has a duty to take reasonable action to enforce the restrictions.  In order to avoid a costly legal dispute with the owner conducting the business, the board may lawfully provide the offending owner with a reasonably short period of time – say, for instance, 30 days – thereby giving that owner an opportunity to earn some income but also require that she find another location for his or her business. 


While the board may be empathetic to an owner facing personal difficulties, it still has a duty to enforce the restrictions contained in a declaration.  The law doesn’t mandate that a board show no humanity to their fellow residents by temporarily allowing a violation, particularly if the violation is technical in nature and does not cause any harm to the welfare of the other residents.  Ultimately, however, the board has the duty to enforce the use restrictions, particularly where another owner is validly complaining about a violation and no law protects the violating owner.  Because these situations can be nuanced and the correct answer depends on an analysis of all of the facts, we urge you to discuss this with an attorney who specializes in community association law.

Tuesday, September 19, 2017

Q&A: Mandatory Evacuation During a Hurricane?


BY: J. DAVID RAMSEY

Q.  Can we order our residents to evacuate our association in cases of things like hurricanes? Does a state emergency order play a role? If the state orders a mandatory evacuation can we fine residents who remain?
A.  Generally, if the State or local authorities have not issued an evacuation order, the answer is no.  Unless your governing documents had an unusual provision granting the board the authority to issue an evacuation order, absent a government order of evacuation, the board would not have the authority to issue such an order.  Typically, the powers of a board are far greater with respect to the use of the common elements as opposed to the use of the units.  A board cannot unilaterally tell an owner that he or she must leave their own home, when the governmental entity hasn’t made that determination.  If the State has issued a mandatory evacuation order and your governing document require an owner to comply with all law, then it might be possible to fine an owner for failing to evacuate. If, though, an owner didn’t evacuate and it did not cause the association or fellow owners any harm, it would appear to be an overreaction to a situation where the association’s efforts might be better targeted towards recovering from the hurricane, rather than seeking to fine owners who failed to evacuate.


Thursday, August 17, 2017

New Legislation to Enhance Owner Participation in Community Association Elections

BY: J. DAVID RAMSEY

On Thursday, July 13, Governor Christie signed legislation to enhance owner participation in community association elections. The CAI Legislative Action Committee, with Community Association Practice Chair, Dave Ramsey, leading the effort, worked side-by-side with Senator Gordon, the primary sponsor of the bill, to ensure that the final version of the law would be balanced and not impose undue burdens on community associations while making the election process democratic where it currently isn’t. Only through an eleventh-month effort and the willingness of Senator Gordon to listen to, and accommodate, CAI’s concerns was this able to occur.
A few important features of the new law:
• Although the law is effectively immediately, the implementation of portions of the bill that may require associations to modify some procedural aspects of their election process are delayed until October 1, 2017 to give associations an adequate opportunity to prepare.
• Subject to certain exceptions, in those few associations where the owners are not members of the association, effectively immediately, they are.
• Starting with elections occurring after October 1, Unit owners in good standing will have the right to nominate themselves or other owners in good standing. Bylaws requiring nomination by a Nominating Committee or requiring the signing of a petition by other owners will no longer be required, though Nominating Committees may continue to nominate owners for election to the board – but not exclusively.
• Certain time periods are statutorily imposed, including notices seeking nominees for the board must be sent to all owners not less than 30 days before the notice of the election meeting is sent.
• Notice of the election meeting must go out 14 or more days before the meeting but not more than 60 days before (this impacts many associations that previously had a minimum time notice period of 10 days).
• Board members’ names must be listed alphabetically on all ballots.
• Electronic voting in board elections is statutorily authorized and electronic notice of meetings is also authorized if permitted under the bylaws.
• In a provision unrelated to elections, governing boards may amend bylaws without a vote of the owners in two methods: First, it may amend the bylaws to be consistent with federal, state or local law. Second, it may propose an amendment to the bylaws together with a ballot to reject the amendment and if not more than 10% of the owners’ vote, within 30 days, to reject the bylaws amendment, it becomes enacted.
A number of other parties also voiced concerns about the new law, including the Department of Community Affairs and the New Jersey Builders Association. While a number of language clarifications from each of those parties were accepted, through the efforts of the Legislative Action Committee provisions that were overly burdensome or had negative impacts on community associations were successfully fended off. While there were numerous association election bills posted in the Senate and Assembly this year, most of which would have imposed significant burdens on associations were therefore unacceptable to CAI, only this bill reached the Senate and Assembly floors for a vote, and passed each house unanimously.
Look forward to a future article by Dave Ramsey in Community Trends providing additional details about this bill and a CAI program in late August in which he will provide information concerning important exceptions to the law and tips on how to take advantage of certain beneficial provisions in it.

Friday, August 4, 2017

Benefits of the Municipal Services Act



Many communities are either not receiving the benefits of the Municipal Services Act or are being substantially shortchanged by the municipality in reimbursements due


New Jersey’s Municipal Services Act (the “Act”), N.J.S.A. 40:67-23.2 – 23.8, requires that every municipality provide “qualified private communities” with certain municipal services on its roads or streets or reimburse those communities for such services.  The purpose of the Act is to eliminate double payment for services (such as snow and ice removal, lighting of the roads and streets and collection or disposal of garbage, recyclables and leaves) by residents who pay for them through both their property taxes and association common expenses.  The vast majority of condominiums, as well as other community associations in the State of New Jersey, meet the requirements of a “qualified private community,” as defined in the Act.

If the municipality chooses to perform the designated services, it must do so in the same fashion as it does throughout the municipality.  However, if the municipality selects the reimbursement option under the Act, the municipality enters into a written agreement with the Association to reimburse it annually for the municipality’s actual cost (not that of the Association’s) to obtain the covered services.  While these costs may be significantly less than the Association’s cost to hire private contractors, as is often the case, many municipalities reimburse communities amounts which do not reflect the true full costs to the municipality.  For example, costs associated with the services should include and take into consideration direct and indirect costs such as: labor (straight and overtime), supervisory and administrative personnel, employee benefits, materials, fuel and oil, vehicles and equipment, and the housing of vehicles and equipment and maintenance of same.   Moreover, in some circumstances, a community may be entitled to greater reimbursements when taking into consideration certain “difficulty” factors, such as the steepness of the roads. 

Those communities that do not currently have an agreement in place with the municipality may be entitled to significant monetary sums for the prior years the municipality failed to either provide services or reimburse the community for same.  For newer developments, it is important to keep in mind that it is not necessary that the roads meet municipal standards/specification or that they be accepted by the municipality for dedication for the Act to apply.  In such circumstances, the municipality still has a duty to reimburse the community. 


Despite the enactment of the Act in 1993, many communities are either not receiving the benefits of the Act or are being substantially shortchanged in the municipality’s calculation of the costs for such services.  For this reason, it is important that communities have counsel who specialize in common interest communities, such as those at Becker & Poliakoff, LLP, to carefully negotiate with a municipality in order to assure they receive the maximum amount to which they are entitled.  

Monday, July 31, 2017

Q&A: Scheduling of Annual Meetings



By: J. DAVID RAMSEY

Q. We're not prepared for our annual meeting which is in August. We'd like to reschedule for September. Can we do that or should we just have an unprepared annual meeting in August to just say we had one?

A. While we would normally not advise a board to ignore the requirements of the governing documents, assuming there is no ulterior motive for delaying the annual meeting – for instance, the board desires to obtain bids on a large contract and award it before new members who are opposed to the contract might be elected to the board – then our usual advice in this situation would be to schedule the meeting on the earliest date that you know you would be prepared to have the meeting.  Most  bylaws contain an agenda for the annual meeting.  The board’s preparation for the meeting need not include anything not listed on the bylaws agenda.  Also keep in mind that if there are matters beyond the agenda, for instance, the preparation of, and vote on, an amendment to your governing documents, a special meeting of the members may be scheduled for that and it need not be undertaken at the annual meeting.

While bylaws often contain language that requires the annual meeting to be on a specific day of a particular month, there is little relief an owner can seek for delaying the meeting by a reasonably short period of time.  It may also be that since August is a peak vacation month, it may be difficult to obtain a quorum for the meeting.  Under some state statutes an owner dissatisfied that the annual meeting is not being held consistent with the requirements of the bylaws may go to court and obtain an order requiring the annual meeting to be held on a specific date; but it is unlikely that a court would schedule it earlier than you are planning and, typically, under statutes that provide for this, there is no penalty to the board or the association for failing to have held the meeting earlier. 

Friday, July 21, 2017

Q&A: Unsightly Neighboring Property

Q. We want to clean up the property next door to our association. The association does not own the property. It's less money to just have it cleaned up compared to getting the current owner to clean it up. We would have permission from the owner. As a board can we approve or do we need to advise all the owners for their input?
A.  There are several variables that need to be resolved to know whether spending the Association’s money is appropriate and lawful in this case.  First, while you state that the adjoining property needs to be “cleaned up,” you do not indicate whether this is a matter of cleaning brush, or whether there might be old cars there, perhaps an old barrel that held an unknown substance, etc.  If there is any chance that there is something like old vehicles, in connection with which you do not know who holds the title, or any materials that might constitute a “hazardous substance” under federal or state law, we would recommend against becoming involved in any way, since the possibility of serious liability is much too great.

Assuming that the issue is limited to cleaning up overgrown vegetation and the association has written permission from the owner to undertake the cleanup that details exactly what the owner is agreeing to allow the association to do, you need to ask two additional questions.  First, do the governing documents permit the Association to expend money for this purpose?  Typically there are two places to look for an answer to this question.  One would be in a provision that refers to the budget and the purpose of the expenses the association can include in the budget.  Secondly, there is usually a section of the bylaws setting forth the duties, powers and authority of the board.  In some instances these are stated permissibly, in other words suggesting that the board has, at a minimum, these powers.  Other times the section of the bylaws is stated in such a manner so as to limit the powers of the board.

Finally, there also needs to be a determination by the board that this is truly an association matter.  Is this to help a small portion of all the unit owners, but does not impact the vast majority of owners?  Is there a board member that is impacted and that is why the board is considering this action?  How much money would actually be spent?  If the amount is relatively nominal given the scope of the association’s budget and it is for the general benefit of the association that suggests one direction, but if it benefits few owners or it were to particularly benefit a member of the board, it suggests a different answer.

There are enough complexities in this issue that we would urge the board to consult with legal counsel before taking action.

Friday, July 14, 2017

Q&A: Handling Requests for Emotional Support Animals


Q:
I live in a 40-unit condo building, which has a NO PET AMENDMENT from 1980. A woman recently purchased a unit and has been seen with a dog that barks all the time. She signed all the disclosure forms that stated “no pets” and had given the Board a note from a nurse practitioner that the dog is an emotional support animal. What can we do?

A:

The Federal Fair Housing Act (42 U.S.C. §§3601-3619) and the regulations promulgated thereunder require “housing providers,” including entities such as condominium associations in New Jersey, to make “reasonable accommodations” to disabled persons in rules, policies, practices or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling. New Jersey’s Law Against Discrimination (N.J.S.A. 10:5-1 et seq.) similarly requires accommodation of the disabled.  Decisions of federal and state courts in interpreting the Federal Fair Housing Law and New Jersey’s Law Against Discrimination have held that in certain instances housing providers, such as a condominium, must accommodate those with a legitimate physical or emotional disability requiring the support or assistance of an animal.

Notwithstanding, simply providing a note from a nurse practitioner stating that “the dog is an emotional support animal,” does not provide the governing body of a condominium the reasonable opportunity to establish that the resident suffers from a disability defined by law; and, further, requires the physical assistance or emotional support of a dog to reasonably accommodate their disability. Thus, in this instance, it likely would not be unreasonable for the association to request additional information to allow its governing body to evaluate the reasonableness of the request.

For example, the association may reasonably request that the resident provide a certification of a Physician or other qualified Treating Professional certifying: (a) the disability or handicap suffered (b) said disability or handicap meets the standards set forth by the Federal Fair Housing Act; (c) to the major life activities substantially limited by the disability or handicap; (d) whether treatment is available for the disability or handicap; (e) to the description of the accommodation requested; (f) as to whether the accommodation requested alleviates or mitigates the disability or handicap; and, (g) as to whether any alternative accommodations exist. If, upon receipt of such additional information, the association concludes that the resident is disabled under the law and that the physical assistance or emotional support of the identified animal is reasonably necessary to accommodate the disability, then approval of the accommodation is required by law.

Where an accommodation is required by law, the resident is still required to maintain the animal in accordance with existing rules and regulations; which often include, among other requirements, that residents permit no activity that creates a nuisance or annoyance to other residents. Such rules require the resident to take all actions necessary to prevent the animal from making noise that may unreasonably annoy or disturb the peace of neighboring residents.


Keep in mind that where an accommodation is required to be made by law, the animal is not considered a “pet.” Rather, it is an animal that the resident has claimed is required under the law for the physical assistance or emotional support for the disability that the resident is afflicted with. Therefore, the governing board of a community association should seek the advice of legal counsel before denying the request of a resident for a physical assistance or emotional support animal. The association’s legal counsel is best suited to advise and assist the governing board with implementation of appropriate procedures should the board receive such a request.