FUNDAMENTALS OF COMMUNITY ASSOCIATION LAW

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1 c FUNDAMENTALS OF COMMUNITY ASSOCIATION LAW Moderator/Speaker Christine F. Li, Esq. Greenbaum, Rowe, Smith & Davis LLP (Woodbridge, Roseland) Speakers Paul Leodori, Esq. Law Offices of Paul Leodori, P.C. (Medford) Francis J. McGovern, Jr., Esq. McGovern Legal Services, LLC (North Brunswick, Jersey City, Brick, Brigantine) Caroline Record, Esq. Hill Wallack, LLP (Morristown) Audrey D. Wisotsky, Esq. Pepper Hamilton LLP (Princeton) In cooperation with the New Jersey State Bar Association Real Property, Trust and Estate Law Section and the New Jersey Chapter of the Community Associations Institute (CAI-NJ) S064.15

2 2015 New Jersey State Bar Association. All rights reserved. Any copying of material herein, in whole or in part, and by any means without written permission is prohibited. Requests for such permission should be sent to NJICLE, a Division of the New Jersey State Bar Association, New Jersey Law Center, One Constitution Square, New Brunswick, New Jersey

3 Table of Contents Page Fundamentals of Community Association Law Audrey D. Wisotsky, Esq. 1 An Overview of the Statutory and Regulatory Framework 1 Forms of Ownership/Enabling Legislation 1 Disclosure Laws 1 Other Applicable Laws and/or Regulatory Schemes 1 Formation of the Community Governing Documents 3 Condominium Formation 3 Fee-Simple Communities With Homeowners Associations (Single Family Homes/Townhomes (Non-Condominium)) 6 Cooperative Formation 8 Project Registration With the New Jersey Department of Community Affairs ( DCA ) 10 Residential Planned Real Estate Developments Located in New Jersey Are Subject to the Planned Real Estate Development Full Disclosure Act 10 Remedies Under PREDFDA 13 Municipal Services Act ( MSA ) 14 Background 14 Qualified Private Communities Covered by MSA 15 Municipalities May Either Provide the Service in the Same Fashion as the Municipality Provides the Services on Public Roads and Streets or Reimburse the Community 15 Services Covered 15 Fair Housing Act 16 Prohibits Discrimination on the Basis of Race, Color, Religion, Sex, National Origin, Familial Status and Disability 16 New Jersey Law Against Discrimination Provides Broader Protections 16 Housing for Older Persons Act of 1995 (HOPA) 16 Hotel and Multiple Dwelling Law 17 5 Year Inspections 17 Affordable Housing Regulations 23 Association Governing Documents Should Set Forth the Background and Reference the Applicable Municipal Affordable Housing Agreement 23 Market Unit vs. Affordable Unit Conflicts 23 The Community Association and Its Governing Board Paul Leodori, Esq. 25 The New Jersey Nonprofit Corporation Act 25 The Interrelationship Between and Among Community Association Board Members and the Association 27 The Fiduciary Relationship 27 The Business Judgment Rule 29 Breach of Fiduciary Duty 36

4 Rules of the Road For Board Members 38 Rules of the Road For Members 53 Maintaining the Sanctity of Elections 58 Transition of Control from the Sponsor to the Unit Owners 66 Powers and Duties of the Association Frances J. McGovern, Jr. 71 Association Duties and Powers 71 Association/Board Member Duties 71 Association Power 72 Governing Documents 72 Rules and Regulations and Amending Governing Documents 73 Reasons for Rules and Regulations 73 Sources of Rules and Regulations 75 Notice of Rules and Regulations 76 Exceptions to Rules and Regulations 78 Amendments 79 Violations and Enforcement 80 Alternative Dispute Resolution 80 If ADR Does Not Resolve the Issue 83 Fiduciary Duty to Enforce 83 Reasonableness in Application 84 Failure to Enforce 84 Attorney Fees for Enforcement of Rules and Regulations 84 Delinquencies and Collections 85 Fundamentals of Community Association Law Caroline Record 89 Financial Guidance 89 Budget 89 Accounts 89 Audit 89 Sale/Purchase of Units 90 Litigation 90 Budget and Reserves 90 FHA/FNMA Approval 90 Age-Restricted Communities 90 Estoppel Certificates 91 Rental Restrictions 91 Home Inspection Issues 91 Professionals 92 Managing Agent 92 Attorney 92 Accountant 92 Engineer 92 Insurance Broker 93 Attachments Budget of Revenues and Expenses - January 1, 2015 Through December 31, 2015) 95

5 Condominium Association, Inc. Monthly Financial Statements July 31, Sample Condominium Association, Inc. Financial Statements and Supplementary Information December 31, 20XX 111 Project Certification 131 Condominium Approval Cover Letter/Document 133 Condominium Project Approval Checklist 135 Survey of Age Verification 141 Fax re: Payoff Statement 142 Senate, No RPC 1.13 Organization as the Client 155 Indemnification Under the Fair Debt Collection Practice Act 157 About the Panelists 159

CONDOMINIUM FORECLOSURE

CONDOMINIUM FORECLOSURE David J. Byrne, Esq. Ansell Grimm & Aaron, PC (Princeton) Kathryn Gilberston Shabel, Esq. Assistance Chief of the Office of Foreclosure (Trenton) IWRPP00516 2016 New Jersey State