August 2024 CT

HOA and Condo TRANSITION By Damon Kress, Esq., McGovern Legal Services, LLC and Andrew Newman, CMCA, AMS, PCAM, INTEGRA Management Corp., AAMC

Y ou have just bought a brand-new condo unit or home and are just getting settled in with furniture and possibly even picking out some new wallpa per or wall paint when you get a letter in the mail. The let ter tells you that the community you live in has just reached 25% units closed and per New Jersey Statute 45:22A-47 an election will be held to elect among the owners an executive board member. For community managers, this is the first of many letters that will be sent out likely via the US postal service to unit owners at 50%, 75%, and 100% closed to elect board members and take over control of their condo or home owners association. During this time, the manager and new condo or HOA board will assemble a team of attorney’s, engineers, accountants, and others to aid the new associ ation through this process and beyond. A developer/sponsor/declarant during the process of setting up a community will commonly hire a management firm to handle the day-to-day operation of the associa tion. This manager or management company will work with the developer appointed and then eventually mixed board to operate the association following the bylaws

crafted, Planned Real Estate Development Full Disclosure Act, Condo Act, and other statutes as applicable to the association. It is important that during these early parts of the transi tion process documents are collected that will need to be transferred to the new homeowner board at the official 75% conveyance of homes. Some documents that will be needed are the community bylaws, a copy of the articles of incorporation or documents creating the association, a copy of the master deed with all amendments, plans for the building or buildings that make up the association, con tracts with vendors servicing the association, a copy of any rules that have been promulgated, accounting records, any insurance policies, a copy of any warranties, and more. Managers who are working during this process have a duty to the board and a duty to uphold the Community Associations Institute Professional Manager Code of Ethics (assuming they are a member). This can at times be chal lenging as the interests of the developer/sponsor/declarant can compete with the interests of the new homeowners tak ing over control of the community board. A manager must use their best judgment and navigate this interest carefully. CONTINUES ON PAGE 40

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AUGUST 2024