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Brandon Farms Property Owners Assoc., Inc. v. Brandon Farm Condominium Assoc., Inc.

A-6356-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

CONDOMINIUMS; RESTRICTIONS—Members of a condominium association that is, itself, a member of an umbrella association cannot refuse to pay their share of what their association pays to the umbrella association on the theory that their association pays an inequitable share of the umbrella association’s expenses.

The developer of a development containing single family homes, townhouses, and condominiums filed a Declaration of Covenants and Restrictions to create a property owner’s association to administer the common areas of its development and to enforce the restrictions and covenants. Membership in the property owner’s association was divided into separate classes for the single family homeowners, the townhouse owners, and the condominium unit owners. The Declaration of Covenants and Restrictions established that the primary responsibility for payment of the common charges allocated to the condominium units was with the condominium association and not with the owners of the individual units. The condominium association was required to pay the share for all of its members to the owners association and then seek reimbursement from the individual unit owners. When several of the condominium unit owners defaulted in paying their dues to the owners association, the owners’ association sought the delinquency from the condominium association. The condominium association claimed that the Declaration of Covenants and Restrictions was inequitable because it required only the condominium unit owners to bear the responsibility for nonpayment by its unit owners, while it required all the owners to bear responsibility for delinquencies by the single family homeowners and townhouse owners. The lower court agreed and granted summary judgment in the condominium association’s favor. The lower court found that the Declaration was inequitable and unenforceable because it violated the spirit of the Condominium Act’s requirement that each unit owner be liable only for that owner’s proportionate share of common expenses. It reasoned that requiring the condominium association to pay the owners’ association dues that were not paid by individual condominium unit owners increased the non-defaulting condominium unit owners share of expenses beyond their proportionate share in violation of the Condominium Act.

The Appellate Division disagreed and reversed. It found that the Declaration constituted an agreement by the condominium association to be primarily responsible for the unit owners’ common charges in exchange for the use of the common areas. The Court noted that the obligation by the condominium association’s obligation to pay the owners association dues was no different from than its obligation to pay other expenses related to the common elements. The condominium association must pay the expense and then seek reimbursement from the unit owners. The Court also rejected the lower court’s reasoning that the Declaration was inequitable because only the condominium unit owners were responsible for non-payment by other unit owners, while all the owners (including unit owners) were responsible for delinquencies by the single family homeowners and townhouse owners. The Court noted that all the owners’ association members, including the condominium unit owners, agreed to that provision.

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