Page 1 - CooperatorNews New Jersey Summer 2021

NEW JERSEY
THE CONDO & HOA RESOURCE
COOPERATORNEWS Summer 2021
NJ.COOPERATORNEWS.COM
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Legal & Legislative Roundup
Looking at the Past Year in Law
BY DARCEY GERSTEIN
COVID-Related
Legislation Affecting
Boards and Managers
When the Law Meets a
Pandemic
BY DARCEY GERSTEIN
Self-Management
in Stressful Times
Some Communities Go It
Alone—Others Outsource
BY A J SIDRANSKY
205 Lexington Avenue, NY, NY 10016 • CHANGE SERVICE REQUESTED
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does, in fact, turn over control [of the board] to the unit owners—
that will hopefully enable unit owners, if there is a problem, to be able
to recover something from the developer for that problem.”
Attorney David Ramsey of the Morristown office of law firm
Becker & Poliakoff tells
CooperatorNews
that a similar bill is being
proposed in the Garden State. Senate Bill 3649 would adjust the
statute of limitations on damage claims for construction defects in
a condominium, cooperative, or other planned community devel-
As the nation starts to regain a semblance of normalcy with COVID-19 vaccinations
on the rise and restrictions beginning to ease, legislative dockets have filled with bills and
proposals that have ramifications for the co-op, condo, and HOA sector. Here are some of
the biggies that boards, managers, and residents should be aware of, no matter where your
particular community is located.
Construction Defect Claims
Matthew Gaines, attorney with Braintree, Massachusetts-based law firm Marcus, Errico,
Emmer, and Brooks, P.C. and co-chair of the Community Associations Institute’s New Eng-
land Chapter’s (CAI-NE’s) Legislative Action Committee, explains that January began the
legislative session for Massachusetts’ two-year legislative cycle; all bills have been filed and
referred to their respective committee, awaiting hearings that will take place in the upcom-
ing year or so.
With respect to condominiums, he says, “One of the more interesting ones is House Bill
1501, ‘An act relative to construction defect claims by condominium owners,’”—a bill being
proposed by CAI-NE’s Legislative Action Committee. Gaines explains that Massachusetts
has a statute of limitations for defect claims against a developer, giving unit owners a certain
number of years to sue for any construction problems. However, what ends up happening is
that the statute of limitations expires either before completion of the project—especially if it
is one that is phased out over many years—or before the developer has ceded control of the
board, leaving no remedy for unit owners who suffer original construction defects.
“So this bill would kind of deal with that problem,” says Gaines, “and basically says that,
for condominiums, the statute of limitations doesn’t even start to run until the developer
Even as businesses, schools, and even en-
tire economies shut down at the start of the
coronavirus pandemic last year, the task of
running residential buildings and commu-
nities never ceased. In fact, it could even be
argued that as people were more or less con-
fined to their homes for weeks and months,
the decisions made by co-op, condo, and
HOA boards and managers had even more
impact on their communities than in the Be-
fore Times.
Now that widespread vaccine distribution
and a federal administration that takes the
matter seriously is beginning to flatten and
even ebb transmission of the virus in many
parts of the country, lawmakers (who them-
selves were sidelined for a time last spring)
are starting to put legislation on the books re-
lating to—or motivated by—COVID-19 and
its effects on lives and livelihoods.
COVID Immunity
In addition to the Herculean effort to
achieve COVID immunity through mass
vaccination, another type of COVID immu-
nity is being sought by state legislatures in the
interest of community association leaders:
immunity from liability for COVID-related
claims.
In the New Jersey Assembly, accord-
ing to community association lawyers from
the Morristown office of law firm Becker &
Poliakoff, there is pending legislation in the
Garden State “that would, essentially, offer
community associations immunity from
legal action regarding any illness, injury, or
death from or related to exposure to or trans-
mission of COVID-19 on the premises of a
planned real estate development.”
While many condominium associations
and co-op corporations hire professional
property managers or management firms
to handle the routine (and not-so-routine)
tasks involved in running a multifamily
building or HOA, a significant number take
the opposite route, eschewing formal man-
agement and running their properties them-
selves. While most of these self-managed
communities tend to be on the smaller side,
self-management can be successful at any
size, from a handful of units to hundreds.
Self-management involves numerous
skills, however; everything from accounting
to minor home repairs may need to be han-
dled directly by the board, rather than being
delegated by a manager or firm. Obviously,
anyone with a plumbing problem can call a
plumber; you don’t have to be a professional
manager to intervene when a leak rears its
head. But that said, the most successful self-
managed properties are those that do have a
range of practical skills distributed between
owners, and a positive, community-oriented
view from members. It’s a ‘pitch-in’ sort of at-
mosphere, and it’s not for everyone.
The arrival of COVID-19 has had major
implications for all properties and their man-
agement, of course, but the pandemic-relat-
ed restrictions on close personal contact has
had a particularly personal effect on smaller,
self-managed communities.
CooperatorNews
spoke with several self-managed community
leaders to understand how the global health
crisis has changed the way they live and how
they manage themselves.
Why Self-Manage?
Even outside of crisis situations like the
pandemic, it’s worth examining why some
associations and corporations choose to
manage themselves. Often, it’s a matter of
cost. Management agents generally have a
minimum monthly charge per building or
per unit, and that charge can be more than
the individual owners can handle. For the
sake of argument, consider a building or
association for which the minimum charge
for management services is $500 per month.
That’s $6,000 per year. In a 50-unit property,
that would come to $10 per month per unit.