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Briarglen II Condominium Association, Inc. v. Township of Freehold

330 N.J. Super. 345, 749 A.2d 881 (App. Div. 2000)

CONDOMINIUMS; MUNICIPAL SERVICES—Even though a municipality may not have an obligation to actually perform municipal-type services because a qualified community’s roadways may not yet meet municipal standards, it still has an obligation to reimburse the community for those services.

The developer of a condominium project entered into a development agreement with the municipality, providing that the developer would, “during the course of construction and up and until the time of final acceptance,” maintain all roads within the subdivision and site plan, which maintenance was to include snow plowing, salting, sanding, and repair. The developer was also required to provide and pay for all street lighting. Pursuant to the terms of the Master Deed, the Association provided “municipal-type” services, including snow and ice removal, street lighting, and trash removal to its residents through the expenditure of assessment monies collected from unit owners. The condominium association, however, had never received reimbursement from the municipality for the cost of those services. The municipality refused to provide those services, or reimburse it for those services, “until such time the ‘development’ is ‘accepted ... as complete.’” The project was still under construction, and there were improvements that needed to be completed before the roadways could be accepted as meeting municipal standards. Further, the municipality advised the association that it did not provide “municipal-type” services “in a single family home development until it meets all municipal standards and specifications.” The lower court ruled, and the Appellate Division agreed, that because the development agreement preceded the recording of the Master Deed, which created the Association and also preceded the individual deeds by which unit owners took title, the Association and its unit owners took title subject to the provisions of the developer’s agreement. Consequently, the Court held that the municipality was not required to maintain the roadway until it met municipal standards. With respect to the provision of other services, the Court looked to N.J.S. 40:67-23.3, which requires a municipality to either provide, or reimburse for, snow and ice removal, street lighting, and trash removal to a qualified private community. That Act, however, does not require the municipality to actually operate any municipally owned or leased vehicles or other equipment or to actually provide any of the services where the roads are not accepted for dedication to public use or do not meet municipal standards and specifications for such dedication, except for width. The Association pointed out that the exemption for a municipality only dealt with the “provision” of the enumerated services, but did not exempt municipalities from their obligation to “reimburse.” In essence, the Association asserted that the Legislature’s use of the words “provide” and “reimburse” in the first part of the Act, and use of only the word “provide” in the exemption section was purposeful. According to the Association, “[h]ad the Legislature wanted to qualify a municipality’s reimbursement obligation ..., as it qualified a municipality’s providing of services obligation ..., it could have done so.” The Court held that the legislative intent of the Act was to “help eliminate double payment for some services which the residents of qualified private communities now pay through property taxes and fees to their association.” The municipality contended that imposing a requirement on a municipality to reimburse for those services “would result in qualified private communities being given preferential treatment over single family homes.” The Court rejected that argument, because in a single family development, homeowners do not pay “double” through property taxes and fees to an association for the same services. In a qualified private community, such as a condominium project, the owners pay both taxes and association dues. Consequently, even though the roadways were incomplete and there was a Developer’s Agreement in place, the Court held that the municipality was required to reimburse the condominium association for the enumerated items. This left the question as to whether a municipality could pass this duty on to a developer by means of a developer’s agreement. According to the Court, “the legislative purpose would be frustrated if municipalities were permitted to contract away their statutory duty to either provide or reimburse qualified private communities for the enumerated services. If municipalities were permitted to do so, the result would be that the residents of qualified private communities would be paying double for services ... .”


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