Fear Not the Dreaded Legal Fees: Part Two

BY:  ANGELA M. MORISCO, ESQ.

Very often boards of condominiums and other community associations hesitate to engage in litigation against unit owners who fail to pay common expense assessments due to fear of  the legal expense. In addressing this concern, I often advise boards that likely if you do nothing, you will receive nothing.

In New Jersey legal fees are recoverable  against non-paying owners. Although many actions against delinquent owners  proceed as uncontested, some owners do appear and attempt to defeat the association’s claim to the money due and owing. Some matters may actually proceed to trial. This of course increases the expense to the association.

Well established case law in New Jersey provides that the amount due to an association should not be reduced by the legal expense incurred to recoup the fees. The Appellate Division reaffirmed this principal in a case decided this week. Significantly, the court determined  that although the fee must be reasonable and must comport with the factors set forth in the Rules of Professional Conduct, the fact that the attorney fee award requested may be substantially disproportionate to the amount the association claims to be due for monthly common expense assessments, is not determinative of whether the fee is reasonable and should be awarded.

Since unpaid common expense assessments will continue to accrue for so long as a non-paying unit owner has title, it is critical for the association to have a cost effective legal strategy in place to recover the fees.  

Vincenzo Mogavero Receives M.B.A. from Cornell University

Vincenzo Mogavero, chair of our New Jersey and New York litigation groups, has just received his M.B.A. from Cornell University.

Vincenzo joined the New York office as a litigator in August 2011, and has continually impressed all of us with his intelligence, work ethic and leadership abilities. He quickly emerged as the leader of the NY/NJ litigation group and, in 2015, added administration of the New Jersey Construction litigation practice to his responsibilities.

What’s In Your Policy...Is Your Coop or Condo Ready for NYC Smoking Rules?

BY:  ANGELA M. MORISCO, ESQ,

Last August, New York City enacted Local Law 147 which requires owners of class A multiple dwellings to adopt and disclose a smoking policy.  Although touted as a disclosure policy, there are several requirements that owners need to be aware of since the law takes effect this August.   Under the law, the definition of owner includes the “owner of record” of rental apartment buildings, the board of directors of a cooperative and the board of managers of a condominium.  Although the law does not dictate the contents of the policy, it requires the policy to address all indoor locations, common areas and all outdoor areas including courtyards, rooftops, balconies and patios where smoking is permitted or proscribed. Similar rules are in effect in public housing nationwide.

Once the policy is adopted, owners are required to provide all residents with a copy of the policy or to post it in a prominent location.  In cooperatives and condominiums, the policy must be incorporated into the by-laws. Failure to adopt and failure to disclose the policy, or to advise of material changes to the policy, will result in violations and the imposition of civil penalties.

How far should your policy extend, i.e. should smoking be banned in individual units?

What are the implications of such a ban?    How far could or should owners and boards go when implementing a smoking policy?

FDCPA & Debts That Can Cause Despair

Condominium & HOA Collections & Compliance

BY:  ANGELA M. MORISCO, ESQ.

The Federal Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C.A. § 1692, et seq. applies to attorneys engaged in the collection of debt for community associations.  The language contained in demand letters is a frequent source of FDCPA litigation. Liability is often imposed based on certain words contained in or omitted from the letter.

Damages recoverable under the FDCPA include actual damages, statutory damages, court costs, reasonable attorney’s fees and can result in class action liability. 

Unlike credit card and other consumer retail debt which is generally charged off and then sent for collection, liability for homeowner association fees continues to accrue for so long as the owner has legal title to the property at issue. Hence, the collection process is ongoing. 

Courts have held that a debt collector violates the FDCPA by stating the “current balance” of a consumer’s debt if the collector fails to disclose the balance is subject to increase due to the accrual of interest or other fees. This issue has been addressed by several very recent Court of Appeals cases.

           

To avoid potential FDCPA pitfalls, attorneys engaged in community association collections are cautioned to ensure that the language contained in demand letters comports with existing, controlling caselaw.

Do your demand letters comply with the requirements of the FDCPA?

Let No Man Put Us Under

The New Jersey Appellate Division Upholds the Sanctity of Property Held as Tenants by the Entirety 

BY: ANGELA M. MORISCO

In a decision dated, May 8, 2018, approved for publication, the New Jersey Appellate Division held that N.J.S.A. 46:3-17.4, precludes an unsecured creditor from forcing the partition of real property owned by a debtor and a non-debtor spouse as tenants by the entirety not used a martial residence.   Raul Augustin Jimenez, et als. v. Raul Anibal Jimenez, (Superior Court, Middlesex County Docket No. L-0025-12 App. Div. May 8, 2018)

The statute cited provides, in substance, that neither spouse may “sever, alienate, or otherwise affect their interest in the tenancy by the entirety during the marriage or upon separation without the written consent of both spouses”.

The holding is important because it provides that the statute “supersedes and nullifies” existing case law that allowed such a creditor’s remedy in certain equitable circumstances.     The decision protects and preserves the interest of husband and wife in property held by the entirety over the interest of a creditor of a single spouse.

The Court did note that an exception may exist in certain circumstances.  As with any other legal matter, executing judgment creditors should consult with qualified, experienced counsel to develop and implement an effective post-judgment execution plan that is consistent with current law. 

Q&A: Barking Dog - Please Help!

BY: MARTIN C. CABALAR

Q: Our community has a resident who leaves their unattended, large service dog on the balcony. The dog barks once or twice every time it sees anyone walk by. This goes on all day and evening. The tenant is a renter and efforts to have them keep the dog inside have failed. Please help! 

A: I assume from the question, which indicates that resident is complaining about a large "service dog," that perhaps the community does not allow pets. As the reader may be aware, decisions of federal and state courts interpreting the Federal Fair Housing Law and New Jersey’s Law Against Discrimination have held that in certain instances housing providers, such as a common interest community, must accommodate those with a legitimate physical or emotional disability requiring the support or assistance of an animal. Nonetheless, even 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.

Regardless of whether or not the animal is a "service dog," if the barking exceeds the average noise level a reasonable person would expect while living in a condominium, then the resident may be in violation of restrictions in the governing documents prohibiting any acts which may be or become an annoyance or nuisance to other residents in the community. If this is the case, the Association may determine to (a) issue a letter advising the owner to keep the barking of the dog at a reasonable level so as not to cause a nuisance to other residents (b) fine the  unit owner if permitted by the governing documents and/or (c) refer the complaining unit owner and owner of the dog to mediation.

The issue of a “nuisance” is very fact sensitive. Thus, we recommend that you consult with your legal counsel prior to issuing a fine or taking any other action against a unit owner who fails to keep the barking of their dog to a reasonable level. 

UPDATE: Recent Clarifications from the New Jersey Department of Health on the Amendments to the Public Recreational Bathing Code

BY: MARTIN C. CABALAR

In our most recent blog post, we responded to a reader considering eliminating the lifeguard at their pool. This is something that many communities have considered doing this pool season as a result of the amendments to the Public Recreational Bathing Code, N.J.A.C. 8:26-1 (the “Code”), particularly the requirement that facilities with pools larger than 2,000 square feet of surface area have at least two lifeguards on duty. Recently, the New Jersey Department of Health issued a Frequently Asked Questions (“FAQ”) clarifying that a “private nonprofit common interest community” is a “specially exempt facility” and thus exempt from the lifeguard requirements of the Code. Accordingly, so long as your community is a specially exempt facility and complies with all other requirements of the Code, there is no requirement that you have at least two lifeguards on duty if your pool has a surface area greater than 2,000 square feet. One lifeguard will continue to suffice, provided you have appropriate signage. 

If you nonetheless decide to eliminate the lifeguard at your pool, the Public Recreational Bathing Code requires that you post a sign at least three feet by four feet in size, prominently displayed at every entrance to each swimming area, stating: (a) “No lifeguard on duty,” (b) “Persons under the age of 16 must be accompanied by an adult,” and (c) “No swimming alone.” This sign must include the hours the pool is open and all information on the sign must be easily readable with contrasting colors. At mobile home parks or retirement communities, the sign must also state: “This pool is closed when the owner or operator is not on the premises.” There are also additional signage requirements for a “Health Club” registered with the Director of the Division of Consumer Affairs pursuant to N.J.S.A. 56:8-39.

Given the insurance and other legal implications, we highly recommend that you consult with your attorney and insurance agent prior to opening your pool this season, especially if you are considering making any decision to eliminate your lifeguard.