Page 16 - CooperatorNews NJ Expo 2022

14 COOPERATORNEWS NEW JERSEY —EXPO 2022 NJ.COOPERATORNEWS.COM LAW & LEGISLATION Removals, Ejections, & Evictions in Condos & Co-ops When an Owner Has to Go BY A. J. SIDRANSKY In a rental building, the landlord has mon reason, “An association can put a to vacate the eviction order and regain certain rights under certain circumstanc- es to remove a tenant from his property charges, and then foreclose on that lien,” clearly noted that the owner still owns the before the expiration of their lease. In a Piekarsky says. “The lien has a priority unit in this scenario. private home setting, the only real path over the first mortgage and tax liens. The to removing an owner is through foreclo- sure—usually due to a mortgage default. then a sheriff’s sale subject to the lien. In derer in New York City, explains that in But what about in a multifamily setting the end, if the foreclosure and sale is suc- like a condominium or a co-op? In short, cessful, the association gets the unit and in ownership rights is key to under- it’s complicated. To start off, in the legal world, the se—but a means of removing a non-pay- word eviction has a very specific mean- ing, different from how most non-lawyers the monies owed. understand the term. Attorneys often pre- fer to use the term ‘remove’ or ‘eject’ when at Bartzen Rosenlund Kasten, a law firm under a proprietary lease, for purposes speaking about forcibly getting a condo based in Chicago, “condo associations of eviction, they’re in the same boat as owner or co-op shareholder out of an as- sociation or building. For the purposes of er for nonpayment of common expenses. they follow the appropriate rules, \[the this article however, we will use the col- loquial ‘evict’ and ‘eviction’ to keep things condo unit has proven effective in getting him or her, recover possession, etc.” This simple. Can an Owner be Evicted? According to Scott Piekarsky, an attor- ney with Phillips Nizer, a law firm located possession of the condo unit through an tually,” says McCracken, “it’s impossible in Hackensack, “You can eject a share- holder from a co-op—but you can’t evict lease the unit, and the rent collected goes the same way a co-op board can remove a condo owner from his or her unit.” That toward paying the judgment amount. a non-paying or otherwise chronically said, removal can occur for monetary Once the unit owner’s account is brought problematic shareholder. or non-monetary reasons. In the case of current, the unit owner may file a motion monetary default, which is the more com- lien on the unit for outstanding common possession of his or her unit.” It should be association can pursue a foreclosure, and the law firm of Ganfer Shore Leeds Zau- the owner is out.” So, not an eviction per standing evictions in co-ops and condos. ing association member and recouping says. “The condo board has no standing. “In Illinois,” says Kris Kasten, a partner ant-landlord relationship with the board have a statutory right to evict a unit own- The prospect of being evicted from one’s board\] can remove the shareholder, evict non-paying owners to pay—which makes contrasts sharply with condo unit owners, an eviction action the primary method who are the lords of their realm, much for assessment collection. After taking as single-family homeowners. “Concep- eviction action, the association may then and unfeasible to evict a condo owner” in William McCracken, a partner with New York, understanding the difference “Condo unit owners own their units,” he Because a co-op shareholder has a ten- a renter. The co-op owns the unit, so if How it Works The process for getting a resident out for whatever reason can vary from state to state. For example, the path to ejec- tion from a co-op in New Jersey is set through individual communities’ bylaws and proprietary lease terms, says Piek- arsky. “There are default provisions for non-payment. Shareholders can also be removed or ejected if they have broken rules and regulations and the offenses are egregious enough. The corporation can cancel a shareholders’ lease and stock to remove him or her.” As is the case in most disputes in New Jersey, ADR—alterna- tive dispute resolution—is required be- fore litigation can commence. Piekarsky notes that in condos, financial reasons— chronic arrears, default, etc.—are really the only grounds available for removing a unit owner in New Jersey, though he notes that associations can get injunctive relief and restraining orders if an owner’s offenses are behavioral rather than finan- cial. In Illinois, when an eviction is used to collect unpaid assessments in a condo as- sociation, the first step in evicting a unit owner is to serve that owner with a statu- torily required demand letter. Kasten ex- plains that “if the defaulting owner fails or refuses to pay the amount demanded within the time prescribed in the letter— typically at least 30 days—then the condo association may file an eviction action. Upon filing the eviction action, the case proceeds in the manner that litigation generally does; the defendants must be served with a summons and complaint, and the plaintiff must prove its case, whether at trial or an ex parte prove-up proceeding. However, an eviction order involving a condo unit will be stayed for a minimum of 60 days—and up to 180 days at the judge’s discretion. That means that the condo association cannot place an eviction order with the sheriff to execute the eviction until after the stay expires. That gives unit owners at least 60 days to pay the judgment and avoid the eviction. If the owner fails to pay within the stay period, the association can proceed with evicting him or her. The actual eviction is executed by the sheriff of the county in which the condo is located. Upon tak- ing possession of the unit, the association may then lease it,” and use those rental proceeds to pay the owner’s arrears. continued on page 28