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Carlyle Towers Condominium Association, Inc. v. Crossland Savings

FSB, 95-6554 (U.S. Dist. Ct. D. N.J. 1998) (Unpublished)

CONDOMINIUMS; STANDING—Condominium associations have standing to pursue fraud and misrepresentation claims concerning damage to common elements.

An August, 1997 decision by the United States District Court for the District of New Jersey gave exclusive standing to a condominium association to assert tort claims with respect to common elements. On this motion for reconsideration, it was argued that the District Court misapplied Siller v. Hartz Mountain Associates, 93 N.J. 370 (1983), specifically, that the Court failed to distinguish claims relating to construction and design defects in the common elements from claims for fraud and misrepresentation relating to the condition of the common elements. It was argued that the latter claims relate to pecuniary losses of individual unit owners as a result of misrepresentations made during the sale of the units, and therefore that those claims are personal to each unit owner. If such were true, those claims would not be within the holding of Siller that, under the Condominium Act, claims concerning damage to, or defects in, common elements belong exclusively to the association.

The District Court interpreted Siller as allowing individual unit owners to maintain tort actions relating to the common elements only if the association has failed to protect their interests or if defective conditions in the common elements result in damage to particular units and the personal property therein. The Court held that these exceptions were not applicable in this case because the fraud and misrepresentation claims concerned only damage to the common elements. It further found that the particular theory of recovery was irrelevant as long as the claim concerned the common elements themselves and was not simply a claim of damage to other parts of the building as a result of some defect in the common elements. Lastly, it held that Siller did not carve out an exception for fraud claims concerning common elements; it only made a fraud claim available to unit owners against the association or its board of directors.


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