CAI-NJ June 2021

TRANSITION... from page 43.

if not more, for large communities. For smaller communities, defined for the pur- pose of this article as associations with up to 20 units, the cost of implementing a team of engineering/accounting/ legal professionals to help successfully navigate transition is of greater concern as they do not typically have endless funds available to spend. However, while boards of smaller communities must be careful about spending without their means, they must also meet their fiduciary duty as unit owner representatives to make sure the transition process is effective and the association is protected before the sponsor/developer departs. A unit owner board will almost certainly be violating its fiduciary duty by simply allowing the sponsor/developer to ride off into the sunset without first per- forming any engineering or account- ing due diligence. Even if the associ- ation cannot afford extensive forensic engineering and accounting studies that culminate in voluminous reports, there are certain precautions smaller communities can take to ensure a successful transition. 1. Transition Engineering/ Accounting Study for Smaller Communities No matter how small the communi- ty, all associations should hire an engi- neer and accountant during transition. Not all engineering/accounting stud- ies will be cost-prohibitive. Boards should approach multiple engineering companies for bids on a transition

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