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N.J. Court Sides with CAI; Protects Condo Assessment Income

1/3/2000  -  Alexandria, VA

Agreeing that a unit owner in a condominium may not withhold common expense fees even when the owner alleges that the association failed to provide essential services, the Superior Court of New Jersey Appellate Division affirmed Judge Barbara Zucker-Zarett's 1998 decision in the matter of Ledgewood Village Condominium Association Inc., v. William Lowe. The Community Associations Institute filed a "friend of the court" brief in the appeal, arguing that the obligation to pay condominium common area charges constitutes an independent covenant which is not subject to offset, conceptually akin to the right of a municipality to levy and collect real estate taxes.

"This decision reaffirms that assessments are the life-blood of community associations," said J. David Ramsey Esq., one of the authors of the brief on behalf of CAI. "Just as a taxpayer may not withhold tax payments because of alleged claims against the government or dissatisfaction with services provided, a condominium unit owner likewise may not withhold payment to the association. Any other decision would not only be in conflict with the majority of decisions from other jurisdictions on this issue, it would also have a devastating effect upon countless condominium associations that rely completely on the payment of common area charges for their very survival."

Ledgewood Village Condominium Association Inc. sued William Lowe for post-bankruptcy petition assessments due and owing from October 1991 through June 1994, the date on which the property owned by Mr. Lowe was foreclosed.

In March 1998, the Superior Court of New Jersey found that the association provided services to Mr. Lowe and that he did not pay his monthly assessments and awarded the association maintenance fees, late fees and counsel fees. The appellate decision, delivered November 8, 1999, stated the "the trial judge's findings and conclusions are supported by substantial credible evidence in the record..." and reaffirmed the amount awarded to the association.

CAI amicus curiae (friend of the court) briefs, one aspect of CAI's overall government and public affairs efforts, are filed in federal or state cases that pose questions of significant importance in community association law.

The Community Associations Institute is a nonprofit association created in 1973 to educate and represent the nation's 205,000 community associations — condominium associations, homeowner associations and cooperatives. CAI members include homeowners, associations and related professionals and service providers.

Phone: 703-970-9235