Proposed Legislation To Stop Association Assessment Collections Is Once Again On The Table - Action Needed
Written by: Ronald L. Perl
As we informed you at the beginning of April, a bill has been introduced in the New Jersey Legislature that would impose a moratorium on the collection of delinquent assessments in condominium and homeowner associations as well as cooperatives. The bill is known as the “COVID-19 Financial Security for Consumers Act”, S-2330 and can be found here. We pointed out that this legislation, while having good intentions, will create more financial distress than it relieves and puts associations in the position that they might not be able to pay their bills. The bill was sidelined for a few weeks, but it is now being actively considered again. As before, it is imperative that volunteer leaders, managing agents and all members of common interest communities contact their legislators to tell them that this legislation is ill-advised. To find your legislator, you can perform a search on the NJ Legislature’s website here. Hearings are scheduled in the Assembly and Senate tomorrow, so time is of the essence.
Our earlier Alert suggested certain points to be made: They are:
1. Condominiums, cooperatives and homeowners’ associations are not businesses. They are groups of homeowners who each contribute their share to maintain a property that they jointly own. Assessments are the way they contribute their portion of the cost of cutting the lawns, fixing roof leaks, paying for utilities and the like. Our association is not a business operation that makes a profit. It only collects enough to maintain our properties. So by suspending our ability to collect everyone’s share, the burden falls to the other members, who then have an increased burden and in turn may find themselves in financial trouble. Then no one can get their lawns cut, roofs fixed, or electric bills paid.
2. Our communities have already taken steps to make arrangements with co-owners who are suffering financially because of the pandemic. They are waiving late fees and making payment plans. But making it illegal to purse payments from everyone will just make the pain worse, because there just won’t be enough money to literally keep the lights on or cut the grass. This won’t relieve suffering, it will just make it worse—and for more people.
3. This will impact others-- the workers who cut the grass, remove the garbage, clean the hallways and otherwise maintain the property. When associations can’t pay their bills, there is a further impact on the economy.
4. The proposed legislation does nothing more than allow any co-owners to stop paying their share of expenses, whether or not they have good reason to do so, because the legislature is taking away the incentive to pay assessments. Until our towns stop collecting taxes, we should not be stopped from collecting our assessments.
If you have questions about this or any other issues with your community association, please contact one of our community association attorneys.
Ronald L. Perl
Kenneth R. Sauter
George C. Greatrex, Jr.
Michael S. Karpoff
Jonathan H. Katz
Gregg A. Shivers
Catherine M. Brennan
Loren Rosenberg Lightman
Jennifer L. Webb
Terry A. Kessler
Jessica N. Baker
Susan L. Swatski
Alexandra C. Hayes
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