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Ramapo River Reserve Homeowners Association, Inc. v. Borough of Oakland

A-549-03T5 (N.J. Super. App. Div. 2005) (Unpublished)

HOMEOWNER’S ASSOCIATIONS; MUNICIPALITIES; DEVELOPERS—Under New Jersey’s Municipal Services Act, a municipality may not avoid its obligation to provide designated municipal services to a homeowner’s association by contracting that duty away to the project’s developer.

“[T]hird parties [that were] contracted and paid for by” a homeowner’s association provided it with “snow removal services.” The association then sued its municipality for violating the New Jersey Municipal Services Act (Act) for failing “to provide [these] snow/ice removal services” or reimburse “the Association for the cost of those services.” The municipality contended that it was not liable, rather that it was the developer who had the duty to provide such services or reimbursement because the municipality and the developer had entered into a “valid and enforceable” agreement in which the developer “was responsible for any and all monies found to be owed the Association.”

The lower court dismissed the municipality’s complaint against the developer and found that the municipality “could not contract away its statutory duties under the Act to provide snow/ice removal services or reimbursement to the Association for rendering those services.” The municipality appealed, contending that: 1) the developer’s “obligation to maintain the roads and keep them free of all snow and other debris as required under the developer’s agreement” did not” disobey established law; and 2) “the Developer’s Agreement . . . [was] not contrary to public policy.” The municipality further contended that the Developer’s Agreement provided that it was not required to provide snow removal until the developer “completed all of the contracted public improvements” and that when the Association procured the “snow removal services,” “a number of substantial elements of the development project” were incomplete.

The Appellate Division held that the Act arose from the “principle that a failure to provide municipal services equally to all citizens denies equal protection of the law.” Additionally, the Court held that the municipality could not “recoup the costs of [its] obligations from the developer ... [because the] Act clearly ... imposes a duty upon the municipality to provide either the enumerated services or reimbursement for the cost of the services.” Thus, the municipality had the ultimate financial responsibility to provide the services. Finally, the Court held that the Act’s legislative history provided that “the Act would supercede any previous agreements reached between municipalities and developers and would adversely affect only the municipalities.”

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