CAI-NJ May 2019 (w)

CASE STUDY: ASSOCIATION ON THE BRINK By Loren Rosenberg Lightman, Esq. Hill Wallack LLP

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S everal years ago, I served as an impartial mediator in a case in which a homeowner sued their commu- nity association, the association’s board of trustees, and the association’s property manager. The homeowner’s claims were similar to those we often hear throughout the community association industry, including that the associ- ation did not hold its annual meeting as required in the governing documents, did not hold fair and transparent elections of its governing board, did not hold open board meetings, did not make required financial disclosures to its members and did not provide timely minutes of the meet- ings that were held (this was prior to the recent Radburn legislation). The homeowner’s claims also included a lack of repair and maintenance of the association’s common elements, which the homeowner argued had fallen into a state of disrepair.

The homeowner’s complaint did not seek financial com- pensation, but rather, a Court Order requiring the associ- ation to address the violations. As a result of negotiations between insurance defense counsel and the homeowner, the Court voluntarily dismissed the homeowner’s complaint and referred the claims to alternative dispute resolution (“ADR”) where I commenced my role as the third-party neutral mediator. My first action as mediator, after receiving consent from both the homeowner and the association’s board, was to schedule an annual meeting and election, which I under- stood had not occurred during the previous calendar year. Part of the reason for this was that the association’s communi- ty manager was based out-of-state and there was a dispute between the manager and the association as to exactly what this manager’s contractual responsibilities were. As a CONT I NU E S ON PAGE 16

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