September 2025

DEVELOPER OBLIGATIONS... from page 38.

date by which developer-assessments would commence. While no solution is perfect in all situations, the 2021 reg ulation cured an issue that often ended up being litigated with uncertain results for both sides. Response to the NJBA Relief Request of DCA: 1. Developers expressed concern for overfunding of associa tions. We do not view this as a negative situation for asso ciations. We understand that the amount of developer funding via payment of registered units or permitted units may create overfunding, but that is a timing and cash flow issue for the developer. So long as the developer is permitted to use its portion of any surplus to take a credit towards an updated billing based on registered units or permitted units, the association should be whole and meet its obligations even though the initial outlay of funds by the developer may be a one-time cash flow issue. 2. While the NJBA has focused on the new regulations generating surpluses, which many associations have experienced, there can be situations where even with this developer contribution there may be a deficit. Developers should be required to continue to subsidize

and was building and closing title on 50 per year, they would be paying the full maintenance fees based on the number of units being constructed in addition to all of those registered and not under construction. Such a formula would likely create large funding surpluses for the association. The new regulations also require that any return of surplus could only be decided by the unit owners at a meeting of the unit owners, not the board, whether controlled by the developer or unit owners. Based upon continuing experience with the regulations, in March 2025 the NJBA made a specific request to the DCA for relief from the 2021 regulations. NJ-LAC has now entered the dialogue and has issued a rebuttal statement to the NJBA relief request and has directly addressed our concerns with staff of the Commissioner of the DCA. The CAI-LAC’s position is as follows: The intent of the regulation as agreed upon by the NJBA and NJ-LAC was to create a specific and easily trackable

Serving Community Associations for Over 35 Years

Community Associations Attorneys:

A. Christopher Florio, Esq. cflorio@stark-stark.com

Mary W. Barrett, Esq. mbarrett@stark-stark.com

Melissa A. Volet, Esq. mvolet@stark-stark.com

Edward Berman, Esq. eberman@stark-stark.com

Transition & Construction Litigation Attorneys:

Andrew J. Podolski, Esq. apodolski@stark-stark.com

J. Randy Sawyer, Esq. rsawyer@stark-stark.com

We understand your association is comprised of individual unit owners seeking to protect the value of their homes. For that reason, we offer fee structures for your community including hourly, retainer, or hybrid arrangements. In appropriate cases, we offer representation on a full or partial contingent fee basis. Our complement of services includes the following:

• Collect Delinquent Assessments • Draft and Negotiate Service Contracts • Municipal Services Act Reimbursement • Fair Housing Compliance

• Create and Enforce Community Rules and Policies • Tax Appeals • Guidance on Board Governance • Developer/Sponsor Transition • Construction Defect Litigation • Rent Receivership

• Pursuit of Creditor Claims in Bankruptcy • Foreclosure of Assessment Liens • Land Use and Zoning Representation • Insurance Coverage Claims

www.Stark-Stark.com • 1-800-53-LEGAL • 100 American Metro Blvd., Hamilton, NJ 08619

* Results may vary depending on your particular facts and legal circumstances. Because every case is different, the descriptions of awards and cases previously handled are not meant to be a guarantee of success.

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SEPTEMBER 2025