Hill Wallack LLP’s “Classic Condo Cases” is a continuing series in which we look back at precedential Court opinions and discuss why each decision is important for community associations throughout New Jersey.
The Glen, Section I Condominium Association v. June, 344 N.J. Super. 371 (App. Div. 2001)
Quick Take: The responsibility of condominium owners to pay common expense assessments is unconditional; however, an association board may not take punitive action against a unit owner if those actions are not specifically authorized either by law and/or by an association’s governing documents.
Just the Facts: The Glen is a condominium association located in Somerset County. When unit owner, John H. June, Jr., ran into financial difficulties in 1996, he stopped paying his monthly common expense assessments (and eventually filed for bankruptcy in March 1997). Following the bankruptcy and a discharge of his debt, June failed to resume paying assessments, which resulted in the Association’s Board prohibiting June from using the common elements to park his car. The Board went so far as to install a “lolly column” immediately behind his garage in January 1999, and deliberately piled snow in June’s driveway. In March 1999, the Board initiated a lawsuit against June seeking to collect past due assessments.
After trial, the Court found that the Association was not entitled to the full amount of assessments requested because the Board’s actions had constructively “put [June] out of the Association.” The Association appealed.
The Court’s Decision: On appeal, the Appellate Division held that:
(1) pursuant to the New Jersey Condominium Act, no unit owner may exempt himself from liability for his share of the common expenses by non-use of the common elements, abandonment or otherwise. In so holding, the Court determined that a “unit owner’s obligation to pay common expenses is unconditional” and no unit owner escape that obligation by waiving membership in an association. Thus, the Trial Court’s determination that June was constructively removed from the Association and did not have to pay assessments was overturned; and
(2) pursuant to an association’s governing documents, a board may suspend a unit owner’s rights and privileges to use the common elements; however, unless explicitly stated in the documents, an association board may not prevent a unit owner from using property that falls outside the definition of “common elements,” including limited common elements such as driveways, garages, balconies or decks. In placing a “lolly column” in front of June’s driveway and depriving him of the use of his garage, the Association’s Board breached their fiduciary duty to June, entitling him to damages.
Why It Matters: For community association attorneys, this case is the Holy Grail of “what not to do” when trying to collect past due common expense assessments. Suspending privileges and depriving a unit owner of the use of common elements, like a community pool or clubhouse, are perfectly acceptable (and extremely effective) means of compelling cooperation and payment if (and only if) such actions are authorized by an association’s governing documents. Associations should be wary of attempting to deprive unit owners access to common elements, limited common elements or other property if not specifically authorized by the governing documents. And perhaps more importantly, the “buzz word” from this case is and will always be the Court calling the responsibility to pay assessments “unconditional,” which clearly and distinctly differentiates community associations from landlord/tenant situations, where the payment of rent can be conditioned on the habitability of a unit. In fact, the Court’s language – that a “unit owner’s obligation to pay common expenses is unconditional” – may be the most quoted language in any community association attorney’s repertoire, certainly those that handle collection matters.
To read the Appellate Division’s decision in The Glen, Section I Condominium Association v. June, please click here.
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