October 7, 2011
Beware the Lead Surcharge!
Written By: Ronald L. Perl and Jonathan H. Katz
The New Jersey Department of Community Affairs (DCA) apparently has been charging lead paint inspection surcharges under the N.J. Hotel and Multiple Dwelling Law to common interest communities that are not liable for these surcharges. Boards and managers therefore need to review carefully the invoices submitted by the DCA for inspection fees.
Condominiums and cooperatives in New Jersey are subject to inspections for compliance with the Hotel and Multiple Dwelling Law every five years. Near the inspection date, the DCA sends a bill to the association/cooperative for an inspection fee. In addition, the DCA is required to charge a lead paint inspection surcharge of $20.00 per unit for certain units constructed before 1978. Recently, though, a number of communities have been billed improperly for lead surcharges.
The lead surcharge is not to be assessed for units registered with the Bureau of Housing Inspection as having been constructed after 1977 or, regardless of construction date, as being occupied by their owners as their residences, as well as other described types of units. N.J.A.C. 5:10-1.12(h)4. Nevertheless, the DCA apparently has charged the lead surcharge for all units in at least some communities that were built in 1978 or later and regardless of whether the units are owner-occupied. Upon telephone inquiry to the DCA about the erroneous charge for one post-1978 condominium, staff advised that the lead surcharge is routinely imposed but that it will be waived if the association submits a copy of its “deed” with its payment of the inspection fee.
Moreover, where a unit is properly subject to the lead surcharge, the surcharge actually must be paid by the unit owner provided that the association conveys the notice of the charge to the unit owner and the association submits the name and address of each liable unit owner to the Bureau of Housing Inspection. N.J.A.C. 5:10-1.12(h)5.
Unsuspecting associations unfamiliar with the lead surcharge law may pay these surcharges even though they are incorrect. It is unknown whether the DCA has refunded incorrectly paid surcharges. Therefore, associations should question a lead surcharge for any unit built after 1977 and for any unit occupied by the owner as his or her residence and should advise the DCA accordingly in order to stop future improper billing. Associations that recieve a bill for the lead surcharge should consult with an attorney to determine if units are exempt.
Each association also should check the accuracy of the inspection fee for which it is billed. The fee for inspections is graduated based on the number of units in the community. As of Oct. 7, 2011, the inspection fee is: $52.00 per unit for up to seven units, $32.00 per unit for the eighth through 24th unit, $27.00 per unit for the 25th through 48th unit, and $19.00 for each unit over 48, subject to certain exceptions. N.J.A.C. 5:10-1.12(h)2.
For further information, contact Ronald L. Perl or Michael S. Karpoff at (609) 924-0808.
Hill Wallack LLP's Community Associations Group
The Community Associations Group of Hill Wallack LLP is recognized for providing insight and innovation in the representation of community associations throughout New Jersey and Eastern Pennsylvania. We represent condominium and homeowner associations, cooperatives and real estate developers, and work closely with association governing boards and committees, management companies and other professionals.
Our experience extends to management and collections matters; transitions; administrative, legislative and regulatory issues; insurance coverage and litigation. We work with colleagues knowledgeable in employment and labor law, environmental law, creditor's rights/bankruptcy and other areas to provide comprehensive support. We do more than advise on the law--we create solutions.
For up to date industry information, visit Hill Wallack LLP's Condo and HOA Law blog at www.condolawnj.com.
For more information, contact one of the attorneys who work in this area:
Ronald L. Perl, Esq.
Michael S. Karpoff, Esq.
Terry A. Kessler, Esq.
Jeffrey G. DiAmico, Esq.
Jonathan H. Katz Esq.
This article provides information of general interest and is not intended, and should not be used, as a substitute for consultation with legal counsel. Any questions regarding the specific issues raised in this article should be directed to the authors or to your contacts at Hill Wallack LLP.