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The Top Five Ways Condominiums Get Into Trouble

By Elysa D. Bergenfeld

1.  Condominiums always assume any interior damage to a unit is NOT its responsibility.  It may be.  The board and management must investigate and determine the cause and the surrounding facts regarding the damage.  If the Association was negligent, and the damage was proximately caused by that negligence, the Association could be responsible for the interior damage to the unit.  Every complaint in this regard should be handled with that in mind and investigated.   

2.  Boards and/or Management often sign vendor proposals and think they ARE NOT contracts as a result.  An agent's execution of a vendor proposal constitutes an acceptance of the terms laid out by the contractor and creates a binding contract.  We suggest not signing those proposals until your attorney reviews same and has advised you regarding any issues related to those terms.  Your attorney may want to draft his own contract for the association's protection. 

3.  Condominiums often charge late fees on late fees.  This practice is not legal and New Jersey Courts will not award them if challenged.  New Jersey law permits the charging of late fees when the association's governing documents allow for same.  The Association may charge late fees for a payment that is late every month, or missed, but not because there is a continuing balance.                   
4.  Condominiums are required to create two accounts during a bankruptcy; a pre-petition account and a post-petition account.  Many associations fail to do this.  This is a violation of federal bankruptcy law and can get associations into trouble.  Bankruptcy only discharges the debt owed prior to the bankruptcy filing.  A debtor who files bankruptcy will still be responsible for fees incurred after the filing.  The association is responsible for splitting the account into a pre-petition account and a post-petition account and having an accurate accounting for same. 

5.  Condominiums  are required to provide owners with a list of delinquent owners if asked.  Many condominiums fail to do so in violation of the New Jersey Condominium Act.

Full post as published by New Jersey Law Blog on August 13, 2010 (boomark / email).