Jan 2018

THE DOS AND DON’TS FOR 2018

THE YEAR IN REVIEW

By Angela Morisco, Esq., Becker & Poliakoff

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T he year 2017 proved to be very successful for common interest communities in New Jersey. We are all very familiar with the amendments to the Planned Real Estate Development Full Disclosure Act (“PREDFDA”) which have enriched the voting rights of owners in common interest communities. Also pending in the New Jersey legislature, is a bill that would require lenders that fail to expedite mortgage foreclosure actions to pay delinquent maintenance fees or agree to the appointment of a fiscal agent to rent the prop- erty and collect the income until the foreclosure action is completed. This legislation would codify the obligations of lenders and the right of associations to have a receiver appointed. The lack of statutory authority to appoint a receiver or a fiscal agent has caused many judges to deny this remedy to associations. In addition to the new legislation, there are some cases of interest from the New Jersey Appellate Division that warrant attention as well.

Arbitration vs. Mediation When it comes to alternative dispute resolution in com- mon interest communities we now know that semantics matter. The New Jersey Condominium Act, N.J.S.A. 46:8B-1 et seq. and the Planned Real Estate Development Full Disclosure Act (PREDFDA) N.J.S.A. 45:22A-21 et seq. require associations to provide a “fair and efficient” alternative to litigation to resolve “housing related” dis- putes. These procedures are commonly referred to as “ADR”. Neither the Condominium Act or PREDFDA con- template that ADR must or should be binding. Rather, ADR is intended as an informal attempt to resolve a dispute that does not forfeit the right to proceed in court if ADR is not successful. Parties, and their counsel, must be mindful of the labels that are used when selecting and participating in ADR. The case of Marano v. The Hills Highlands Master Association, Inc., 2017 WL 5494624 (App. Div. November 16, 2017) is instructive to associations CONT I NU E S ON PAGE 12

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