CAI-NJ Aug.2016

DEADLINES... from page 30.

the board of trustees (except the devel- oper may retain one seat as long as it is selling at least one home in the nor- mal course of business). Thus, at this point the board of trustees has “transi- tioned” to be “homeowner controlled” and the homeowner board of trustees can make decisions for the associ- ation independent of the developer. One of the most important decisions the homeowner board of trustees will make is retaining an engineer to inspect the common property and prepare a report of any deficiencies. Once this “transition report” is final- ized and presented to the homeowner board of trustees, the association is on notice of deficiencies identified in the report. This notice constitutes discov- ery for statute of limitations purposes. Unlike with the statute of repose, there has been some lack of clarity in New Jersey law as to when the statute of limitations accrues and runs for a community association and lit- igation attorneys were left guessing what a court would decide. Should the six years start to run at substantial completion? At homeowner control? Some hybrid of the two? Attorneys for community associations have continu- ally argued that these causes of action could not accrue, and the six-year statute of limitations could not start to run, until after homeowner control and receipt of an engineer’s report. In February, the New Jersey Appellate Division ended this speculation in a case that was very favorable to community association transitions. In this case, The Palisades at Fort Lee

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