CAI-NJ November 2020

Read Your Governing Documents Closely By Randy Sawyer, Esq. Stark & Stark POISON PAPERWORK:

I n the last decade or so of my practice, I have seen an increasing trend where developers are creating govern- ing documents that contain language intended to protect their interests after the condominiums are constructed and sold. Developers are adding provisions to master deeds and bylaws that have the effect of curtailing, or altogether eliminating, associations’ ability to file construction defect suits. These provisions often are directly contrary to rights afforded associations under the New Jersey Condominium Act (the Act). One example is provisions that authorize creation of a “pre-transition committee” made up of unit owners who are given responsibility of inspecting common elements in the community once they are constructed and then “negotiat- ing” a binding resolution with the developer over repairs to any defects. While in theory this sounds like a fair process to resolve defects without the need for litigation, the types

of provisions developers are drafting create a one-sided process in their favor. Actual language from an unnamed association follows with problematic language in bold: ••• ARTICLE XV PRE-TRANSITION PROCEDURES 15.03. Procedure. The Committee shall cause each completed portion of the Common Elements and Other Improvements, other than Bonded Improvements, to be inspected by and obtain a report from a qualified independent engineering consultant within sixty (60) days after the Committee’s receipt of each Notice of Completion. A copy of each said report shall be furnished to the Sponsor within ten (10) days after the Committee’s receipt of same. Thereafter the Committee or its designated representative(s) and the Sponsor shall conduct one or more joint inspections of the improvements covered by the Notice of Completion and CONT I NU E S ON PAGE 24

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