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Mara Court Association v. Giannini

A-2495-06T3 (N.J. Super. App. Div. 2008) (Unpublished)

COMMUNITY ASSOCIATIONS; OFFICERS — Where a community association’s bylaws bar payment of compensation to the association’s officers and there is no resolution authorizing any such payments, the officers are required to return any money received.

A townhouse community was governed by a set of by-laws and a declaration that defined the duties of a townhouse association with regard to the maintenance of community common areas. The documents also set forth the annual and special assessments owed yearly by each owner of a home in the community to support such maintenance. The by-laws indicated that the officers of the association, who could only be owners within the community, would serve without compensation. An elected president of the association conducted an audit and discovered that prior officers of the association, including a past president who would be sued by the association in the instant action, were in arrears for payment of dues and assessments. Further, this past president received compensation during her term as president. The association sued her. She and the association stipulated that the arrears in dues and compensation totaled $7,250. There was no evidence in the board’s minutes that the board had authorized these payments. The past president also admitted that she was aware of the provision in the by-laws that barred compensation to officers. On such a record, the lower court concluded that the past president owed the association $7,250. The past president appealed.

The Appellate Division was satisfied that the lower court’s factual findings were supported by the trial record. The Court noted that the by-laws barred payment of compensation to the officers of the governing body, that the past president admitted she received compensation and failed to pay monthly assessments, and there was no resolution authorizing such payments nor was any by-law amended to allow such payments. The Court did acknowledge that the action was subject to a six year statute of limitations, and that the amounts the president more than six year before the filing of the action were to be subtracted from the judgment.

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