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  • 05/06/2020

    Proposed Legislation To Stop Association Assessment Collections Is Once Again On The Table - Action Needed

    Client Alert

    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
    Partner-in-Charge
    (609) 734-6349
    rperl@hillwallack.com
    Kenneth R. Sauter
    (973) 946-7021
    ksauter@hillwallack.com

    George C. Greatrex, Jr.
    (856) 616-8080
    ggreatrex@hillwallack.com
    Caroline Record
    (973) 946-7020
    crecord@hillwallack.com
    Michael S. Karpoff
    (609) 734-6376
    mkarpoff@hillwallack.com
    Jonathan H. Katz
    (609) 734-6393
    jkatz@hillwallack.com
    Gregg A. Shivers
    (856) 616-8080
    gshivers@hillwallack.com
    Catherine M. Brennan
    (609) 734-6353
    cbrennan@hillwallack.com
    Loren Rosenberg Lightman
    (609) 734-6323
    llightman@hillwallack.com
    Jennifer L. Webb
    (856) 616-8080
    jwebb@hillwallack.com
     
    Terry A. Kessler
    (609) 734-6350
    tkessler@hillwallack.com
    Jessica N. Baker
    (609) 734-6377
    jbaker@hillwallack.com
    Susan L. Swatski
    (609) 734-6318
    sswatski@hillwallack.com
    Alexandra C. Hayes
    (609) 496-5725
    ahayes@hillwallack.com

    ©2020 Hill Wallack LLP. All rights reserved. Please contact Hill Wallack for permission to reprint. Notice: The purpose of this Client Alert is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, accuracy and completeness of which cannot be assured. This Client Alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.