December 6, 2005
NJ: Capital Contribution on unit sales violates NJ Condo Act
MICHEVE, L.L.C. v. WYNDHAM PLACE AT FREEHOLD CONDOMINIUM ASSOCIATION a1014-04
The question presented by this appeal is whether a condominium association may impose a non-refundable capital contribution fee whenever there is a transfer of title to a condominium unit. We conclude that such an imposition violates the provisions of the Condominium Act, N.J.S.A. 46:8B-1 to -38, which require the common expenses for maintenance of a condominium's common elements to be charged to all unit owners.
Defendant is a condominium association subject to the provisions of the Condominium Act. Those provisions include N.J.S.A. 46:8B-17, which requires a condominium association's "common expenses" to be "charged to unit owners according to the percentage of their respective undivided interests in the common elements."
In April 2002, defendant's Board of Directors adopted a resolution which provides that "[u]pon acquisition of title to a unit, the unit owner shall pay to the Association a one time non-refundable working capital contribution of $750." The same resolution also requires payment of "a one time processing fee of $125.00" upon acquisition of title to any condominium unit.
In March 2003, plaintiff acquired title to one of the units within defendant's condominium complex by a sheriff's deed. In June 2003, plaintiff resold the unit to a third party. At closing, defendant required plaintiff to pay various charges, including both the $750 non-refundable working capital contribution and the $125 processing fee established by the April 2002 resolution.
Plaintiff subsequently brought this action seeking recovery of the $750 capital contribution. Plaintiff brought the case before the trial court by motion for summary judgment. The court concluded that the $750 capital contribution, assessed only on new purchasers of condominium units, violated the Condominium Act and defendant's master deed and by-laws. Accordingly, the court entered judgment requiring defendant to refund this assessment to plaintiff.
Posted by joewest at 5:32 PM