Weinstein v. Sandcastle Associates, LLC

OAL Docket No. CAF 910-98 and CAF 4136-98 (Bureau of Homeowner Protection 1999)
  • Opinion Date: February 1, 1999

CONDOMINIUMS; WARRANTIES—The new home warranty period for condominium common elements begins on the date of sale or occupancy of the first unit, unless the alleged defect was not visible at that time, and only the condominium association has the right to make a claim for such a defect.

A condominium homeowner filed a claim under the New Home Warranty Program alleging a significant number of construction defects in the condominium’s common area. The contractor argued that warranty coverage on defects in the common areas had expired because the administrative regulation, N.J.A.C. 5:25-1.3, “provides that the warranty date begins on common areas as of the date of the first occupancy or closing of a unit in the condominium.” There is an exception “where a claim can be submitted where a defect could not have been determined by a subsequent unit purchaser.” The contractor alleged that the exception did not apply because there was clear evidence about complaints by earlier buyers prior to this homeowner’s purchase and also that the alleged defects were visible at the time of this homeowner’s purchase. It further argued that the condominium was controlled by an association and that the homeowner had no authority to represent that association. The homeowner, however, alleged that at the time it purchased its unit, the unit appeared to be defect-free. It further contended that under the administrative regulations, where a builder maintains a 50% interest in an association, a claim may made by an individual owner under the New Home Warranty Program.

The Administrative Law Judge found that the warranty was not tolled beyond a sale of the first condominium unit by the developer because the alleged defects were those that could be determined prior to occupancy. The judge further held that even in light of the regulations, there was no basis for allowing the homeowner to represent the association when the association had been in control of the condominium since before the date upon which the homeowner’s warranty claim had been filed. Consequently, the homeowner’s claims were dismissed because they dealt with possible repairs to common areas of the condominium which were known, or should have been known to exist, prior to the homeowner’s purchase and were also now the problem or concern of the condominium association, which is responsible for operating the common areas.