Page 19 - NJ Cooperator Spring 2020

NJCOOPERATOR.COM THE NEW JERSEY COOPERATOR — SPRING 2020 19 Advertise In The New Jersey Cooperator Marketplace —Call 212-683-5700— Target Key Decision Makers In The Condominium, Co-op and HOA Community By Placing Your Ad Here MARKETPLACE For schedule and ad rates, contact Fred Marks at (786) 404-1701. LAUNDRY EXPERT TESTIMONY PROPERTY MANAGEMENT PROPERTY MANAGEMENT PROPERTY MANAGEMENT If a resident has a delivery, a building sta member can leave the package outside of the apartment. For non-doorman buildings, the resident should be required to come down to the lobby of the building. Boards may have to permit access by a delivery per- son if a resident is sick or self-quarantined. Q. Should we close our gym, pool, play- room, or other amenity? A. Many localities have banned or cur- tailed use of indoor facilities such as gyms, baths, pools, and recreation centers. While private amenities in condos, HOAs or co- ops might not be subject to these restric- tions, boards may wish to close all indoor amenity spaces at this time. Q. What about open houses and brokers who want to show apartments? A. We recommend open houses be paused during this time as they can bring large groups of people into the building and place an unnecessary burden on already busy sta . Boards may permit individual showings, but should require that those vis- its be scheduled with the resident manager or management in advance. is advisory is o ered as a service to clients and friends of Armstrong Teasdale LLP and e New Jersey Cooperator, and is intended as an informal summary of certain recent legislation, cases, rulings, and other developments. is advisory does not con- stitute legal advice or a legal opinion and is not an adequate substitute for the advice of counsel. ■ COVID Q&A... continued from page 4 and to manage the nances of the condo- minium in a prudent and sensible manner. “ e New Jersey Supreme Court in the case of Frances v. United Jersey Bank, 87 N.J. 15, 30-31 (1981) discusses the standard of care the board owes in the execution of its duties: ‘Underlying... is the principle that direc- tors must discharge their duties in good faith and act as ordinarily prudent per- sons would under similar circumstances in like positions. Although speci c duties in a given case can be determined only a er consideration of all the circumstances, the standard of ordinary care is the wellspring from which those more speci c duties ow.’ “ e Supreme Court explained that all the members of the governing board, such as your board, must keep informed about the business of the corporation. Moreover, an o cer of the board cannot insulate him- self or herself from responsibility or liabil- ity by their indi erence or non-participa- tion. In other words, the board has a ‘duty to look.’ (Id at 31.) ‘... a director cannot protect himself behind a paper shield bearing the motto, “dummy director.”’ Id. at 34. “Board members may nd themselves personally liable for any losses which occur as a result of their negligence. e Frances Court has this to say about awarding dam- ages which result from board members’ negligence: ‘Such a judicial determination involves not only consideration of causation in fact and matters of policy, but also common sense and logic. \\\[Citation omitted\\\]. e act or failure to act must be a substantial factor in producing the harm. \\\[Citation omitted\\\].’ \\\[Emphasis added\\\]. Id. at 45. “ e treasurer may very well have been vested by the board with sole responsibility for this aspect of the association’s nances. But the scenario you describe appears on its face to be unwise —and it certainly may be a violation of a board’s duciary respon- sibility. It is not farfetched to conceive of a situation where the treasurer simply ab- sconds with the maintenance fees, and/or applies those fees in an illegal or inappro- priate manner. e board’s apparent lack of diligence would clearly be a violation of its duciary responsibility.” Voting Rights and Ownership of the Land Q Our association is comprised mostly of people who own both their building and the land un- der their building. We have a small group of people who only own their building and pay a user fee to a sponsor for the land un- der their building. Does the Radburn Law entitle the owners who do not own the land under their building the same nominating/ voting rights as those owners who own both their land and their building? —Building Owner Seeking Clarity A “Although the question does not indicate what type of as- sociation you live in (condo, co-op, or homeowners association),” says attorney J. David Ramsey of the Mor- ristown law o ce of Becker, “I’m going to surmise from your question that it is a mixed-use community, since some of the homes or units appear to include a certain plot of land, while others own a unit but no land. ose owners are almost certainly either condominium unit owners or have Q&A continued from page 5 Disclaimer: e answers provided in this Q&A column are of a general nature and cannot substitute for professional advice regarding your speci c circumstances. Always seek the advice of competent legal counsel or other quali ed profes- sionals with any questions you may have regard- ing technical or legal issues. units that are subject to a long-term lease arrangement. Further, it is a little confus- ing that you reference the owners paying a ‘user fee’ to a sponsor for the land under the building. at sounds as if it is, in fact, a leasehold interest. However, you don’t state whether, in addition to paying the sponsor a user fee, they also pay the association an assessment; but for purposes of respond- ing, I will assume that that they do. “It would appear that the community you reside in is a ‘planned real estate de- velopment.’ Under New Jersey’s Planned Real Estate Development Full Disclosure Act—which the 2017 statutory election provisions commonly known as the ‘Rad- burn Election Law’ were incorporated in- to—a ‘planned real estate development’ is ‘any real property situated within the State, whether contiguous or not, which consists of or will consist of, separately owned ar- eas, irrespective of form, be it lots, parcels, units, or interest, and which are o ered or disposed of pursuant to a common promo- tional plan, and providing for common or shared elements or interests in real prop- erty.’ All planned real estate developments except for certain ‘voluntary associations’ (referring to some older lake communities) are included under the Radburn Election Law. Since your description appears to con- form to this de nition, all owners having an interest in a lot or unit in your community are, under the Radburn Election Law, con- sidered members of the association, and all members would have the same nominating and voting rights as all other members.” ■