By Jonathan H. Katz, Esq.
Hill Wallack LLP’s Condo FAQs is a continuing series in which we answer frequently asked questions (FAQs) pertaining to condominiums, cooperatives and homeowners’ associations. These FAQs relate to various issues that include interpretation of governing documents, board meetings, suspension of privileges, collections, or bankruptcy and foreclosure.
Question: How do we know if the township is correctly reimbursing our condominium association for street lighting, and garbage and snow removal?
Answer: In Part I, we discussed New Jersey’s Municipal Services Act, N.J.S.A. 40:67-23.2 to -23.8, and its requirement that every municipality in the State must either provide certain services to qualified private communities or reimburse these communities for such services.
The question now focuses on how the municipality must calculate the reimbursement owed to an association if the municipality determines not to provide the services.
Generally, community 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 plow its roadways, 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, this general 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 you have a question about municipal services or another community association issue that you would like us to address, please e-mail it to us, along with your name and your association, to firstname.lastname@example.org.