Is Your Community Association Receiving the Benefits of the Municipal Services Act?
New Jersey’s Municipal Services Act, N.J.S.A. 40:67-23.2 to -23.8, which went into effect in 1993, is the first (and possibly still the only) legislation in the country that requires cities and towns to provide certain municipal services or reimbursements to community associations within their borders. In short, the Act requires every municipality in New Jersey to either: (1) provide certain services – including the removal of snow and ice from roads; collection of leaves, trash, and recyclables; and lighting of roads and streets – to qualified private communities “in the same fashion” as the municipality provides such services along public streets; or (2) reimburse these communities for such services.
The purpose of the Act is simple – to eliminate the double payment for services owners in community associations now pay through both property taxes and association fees. Although the Act is now thirty years old, many qualified community associations still fail to take advantage of having their municipality provide these services (or reimbursements) simply because they are unaware of this entitlement.
In practice, many municipalities decide to offer reimbursement rather than provide the services because the Act provides that associations are only entitled to reimbursement in the amount it would cost the municipality if it were to provide that service itself. Associations are generally not entitled to reimbursement for services above and beyond what the municipality normally provides to other residents. For example, while it may cost an association significantly more to hire a private contractor to clear its roadways of snow and ice, the reimbursement required by law is only the cost to the municipality were it to provide such service, which in most cases is significantly less than the cost to the association. Moreover, while an association would be entitled to reimbursement for snow removal on its roadways, an association cannot seek reimbursement for those same services on sidewalks, driveways, or parking areas.
However, the rule regarding reimbursement does contain a caveat. If, for example, the nature of an association’s roadways make them more difficult to plow than normal public roads and streets, the association may be entitled to a greater reimbursement than the township’s normal cost per mile. This was the result in Stonehill Prop. Owners Ass’n v. Township of Vernon, 312 N.J. Super. 68 (App. Div. 1998), where the Court recognized that because the municipal roads could be plowed more efficiently than the association’s roads, which were curvy, winding, and steep, the township was required to pay additional amounts by way of reimbursement for what the Court considered a “difficulty factor” over and above what the actual cost to the Township would be for providing these services.
If your association is not receiving the benefits of the Municipal Services Act, please contact one of our community association attorneys to discuss how your association may be entitled to reimbursements that could be used to free up other funds for capital reserves, necessary repairs, or long-overdue improvements to your community.